Impact Of Storage And Material Handling On Store Efficiency

Project and Seminar Material for Purchasing and Supply PS

Impact Of Storage And Material Handling On Store Efficiency

Table of Content

Preliminary Page(s)

  • Title page
  • Declaration
  • Approval
  • Dedication
  • Acknowledgement
  • Abstract
  • List of tables

Chapter One:


  • 1.1 Background of the study
  • 1.2 Statement of the problems
  • 1.3. Objectives of the study
  • 1.4 Significance of the study
  • 1.5 Delimitation of the study
  • 1.6 Research questions and/or hypothesis
  • 1.7 Historical background of the case study
  • 1.8 Definition of terms

Chapter Two:

Literature Review

  • 2.1 Store
  • 2.2 material handing
  • 2.3 store house location systems
  • 2.4 storage facilities/equipment
  • 2.5 store design layout

Chapter Three:

Research methodology

  • 3.1 Area of study
  • 3.2 Research design
  • 3.3 Population sample size and sampling techniques
  • 3.4 Instruments of data collection
  • 3.5 statistical techniques used in analyzing data
  • 3.6 Statistical Techniques Used In Analyzing Data

Chapter Four:

Data Analysis and Presentation

  • 4.1 presentation and analysis of data
  • 4.2 Test of hypothesis/research questions

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary of procedure
  • 5.2 Discussion of finding
  • 5.3 Implication of the findings
  • 5.4 Conclusion(s)
  • 5.5 Recommendation(s)
  • 5.6 suggested for further study
  • Bibliography
  • Appendix

Chapter One


The primary objective of the store function is to provide service to the operating functions and these services cannot be provided without proper provision of storage facilities.

The impact of storage facilities on store efficiency is to ensure that goods regularly required are stored accordingly. Adequate care of materials held within the organization is very important and stores, staff must be well trained in ensuring that materials held within the store are well taken care of storage facilities such as bins, racks, shelves, flat pallets, spillage post, box pallets, stock staking silos, tanks etc. some methods of storage are associated with particular methods of handling and therefore, the task of handling materials or stock and that of storage must be taken together.

Therefore provision of materials handling is another essential objective of the store function storage procedure also encompasses store design and store location system, storage

cannot be effectively done without taking into consideration, the design of the store which involves planning so that stocks are conveniently grouped and placed for efficient operation.

The store should also be designed in such a way that easy flow of items or material held will be ensured without hindrances cause by the choosing of gang ways or blocking to access. Store location system is also important for ensuring proper storage of materials or stores. This is to ensure that stores can be found when they are wanted with the minimum waste of time. The location system to be adopted for certain store house must be decided. For example it may be fixed or random. All goods location system therefore must not only locate the them but also conjure up a mental picture of its precise position within the store house. In many organizations both public and private sector, much emphasis has been laid on procurement and less storage and its associated functions.

This research work is to review the storage procedure and its impact on stores efficiency and in doing this, the storage procedure adopted by Peugeot Automobile Nigeria limited (PAN) kaduna shall be looked into to ascertain its effect on stores efficiency.

1.1 Background to The Subject Matter.

Eighty percent (80%) of organizations expenditure are on materials. This materials when acquired are kept in the store and properly documented. The issuance of this materials has to follow official issuing regulations.

Since stock of materials represent money, it is important to research into how this materials are received, kept and issued with the aim of comparing the practical administration with the theoretical knowledge acquired in school over the years. It is also hoped that suggestions and recommendations will be made regarding modern, scientific and better systems of storage and material handling.

1.2 Statement of Problem

There are enormous varieties of materials in store house of all kinds, and yet there are increasing varieties every now and then because of advancement in technology due to innovation and renovation. These have brought about a careful and important role to be played by the store as appropriately as expected.

So many damages has been caused to materials in the store and which has led significant losses, the material handling, improper store design, location system, storage procedures etc. Many materials have lost their ability due to poor storage facilities, many other materials that should be stored or kept in cold place are exposed to light in different forms have deteriorated due to

this poor storage procedures and lack of qualified or experienced and adequate staff to manage the store efficiency.

These problems do not just arise but as a result of poor storage procedures. Bad management and financial constraints which hinder the purchase of adequate handling equipment of qualified personnel.

1.3 Objective Of The Study

This project is intended to look at the problems associated with the storage an material handling and it’s efficiency in Peugeot Automobile Nigeria limited.

  1. To know the contributions of store to the development of an organization.
  2. To know the objective of storage of materials contribution to the organization.
  3. To knew the methods of materials handling suitable for Peugeot. Automobile Nigeria Limited.

1.4 Significance of The Study.

The research exercise is conducted primary to meet the requirement for the award of Higher National Diploma in purchasing and supply of kaduna polytechnic.

The aim is also to express my concecptual knowledge in the areas of storage and materials handling efficiency and to know how materials are being stored and handling in Peugeot automobile Nigeria limited.

This researcher choose this topic to highlight the inherent danger and consequence of adopting in proper storage and handling of material in Peugeot Automobile Nigeria limited kaduna from suppliers to the finished product with a view of providing solution or making the industry to take necessary corrective realistic measure of storage and handling of material and employ services of skillfull, honest, qualified and intelligent personnel to handle the store. If the solution to be provided in the research work are applied to store and handling of material of the company (PAN) it will show the impact in an organization efficiency and performance.

Another vital reason of the study is to contribute to the existing literature in the area of storage and handling of material in store house for future references. It will enable a lay man in the profession to have first hand information on how proper storage and handling of material is carried out in store. Also the students of the department and other department will find this project as an important and relevant source of literature review in the area of handling material. Further, the study will suggest ways that the company can handle material on store efficiency.

1.5 Delimitation of the Study

This research work will cover the areas in which storage and material handling is based on most especially the place under study witch is (Peugeot Automobile Nigeria Limited) the way they produce and the objective of material handling in their organization, store efficiency and the way the storage corporate with organization and the techniques used in store efficacy and how to store material in order to achieve the desired goals and objectives of the organization which is (Peugeot Automobile Nigeria Limited).

1.6 Research Question

  1. What is the contribution of store to the development of an organization.
  2. How do the objectives of storage of materials contribute to the organization
  3. What are the methods of materials handling, suitable for the case study.

1.7 Brief History of Peugeot Automobile Nigeria Limited (PAN)

Peugeot automobile Nigeria (PAN) was incorporated in December 1972 as limited liability companys principally to produce all sell Peugeot cars and provide a platform for the development of middle and lower industries. PAN formally commenced production on 14th march, 1975 with the initial production capacity of 240 cars per day in two separate shifts, bringing the annual capacity at that material time to 60,000. However, between 1980 and 1981 the production capacity improved substantially to 90,000 cars per annum.

Peugeot Automobile Nigeria limited (PAN) is situated on a total surface area of 330,000 square meters, the equivalent of 82.5 acres. It has a total free space area of 177,200 square meters, which underscore the fact that the company in the course of further development will still have enough land space in the near and remote future. As its incorporation in 1972, PAN had the following structure development.

  1. Federal government of Nigeria = 35%
  2. Bank of industries = 5%
  3. Automobile France = 40%
  4. Kaduna state government = 4.7%
  5. Katsina state government = 5.3%
  6. SCOA (Nig) plc. = 5%
  7. UTC (Nig) Plc = 5%

Between the year 1975 and 1986 (approximately 12years), PAN was producing a total of 415,870 cars perannum. The models of Peugeot being produced then were 504Gl, 504sw/ac models, save during the initial two years of its production, when it briefly produced the 404 salon model,. Between 1982 and 1998, the 505gl/sr models were added to the list of brands produced by the company. In the same period, the company added the 505 Gl and ST evolution. Subsequently the 306salon model come on stream between 1995 and 2005, while 406 salon was introduced into the market where it has remained since 1999 to date.

Number of employees

Total (708), management (32), expatriate (13).

Change of Ownership a New Beginning.

The second phase of the historical background of PAN takes off from the privatization policy of the federal government of Nigeria. The policy offered

great opportunities to indigenous companies to bid for and acquire majority shares in public enterprises. It was this policy that catalyzed a core investor, messrs ASD motors limited, into acquiring majority shares in PAN, leading to its eventual take over of PAN management in the year 2007. The change of management to the current one represents a paradigm shift which may be described as “ anew beginning “ being the end of an era and beginning of a new one, hence, our current reference to the company as “ the new PAN,” spelling new hope and challenges.

The new ownership structure of PAN now is,

  1. ASD motors limited =54.87%
  2. Federal government of Nigeria =40%
  3. Automobiles Peugeot of France =10%
  4. Bank of industries =5%
  5. Kaduna state government =4.7%
  6. Katsina state government =5.3%
  7. SCOA (Nig.) plc. =5%
  8. UTC (Nig.) plc. = 5%

Management Structure

The organization chart of PAN ltd is structured to enhance efficient and effective operations. At the apex of the pyramidal chart is a board of headed by a chairman. The general management team which oversees the day to day activities of the company is headed by managing director assisted by a deputy managing director and supported by four general managers whom run the affairs of the company’s four major divisions, which are namely: industrial, commercial, finance and strategy and corporate resources.

Products Manufactured And Marketed

Peugeot brand of motor vehicles (206 saloon, 207, 307 saloon and Hatchback, 406, 407, Saloon and Station Wagon, 607, Partner, Expert, and Boxer)

1.8 Definition of terms


The management of store houses and stock yard operation of handling of storage equipment, the safe custody and protection of stock.

Store House:

A building where items of stores are kept, pending the time they are needed.


It refers to goods held in the store houses and stockyards, it covers finished product awaiting dispatch to consumer scraps and other items.


These are components, spare parts, raw materials that are kept, pending the time they are needed.


Means the materials that is damaged in their original quality or value.

Bin Bin:

The type of storage facilities used in holding most of the stock items required for normal issue and from which most issues are made.


Are use for items which are too big or heavy for bin accommodation.


The quality of goods available or supplied into the store house.


This is a situation where materials bought are getting useless but not yet useless.


Materials are regarded as being obsolete when it is no longer useful for the purpose for which they are needed.


Are used to move stores from receipt to bins from picking through placing to dispatch or from storage area to maintenance and back again.


Examining object for identification or checking it for verification of quality or quality of its characteristics.


Is the totality of features and characteristics of a product and services that bears on its ability to satisfy a given need.


Refers to the value or amount of a commodity required for a particular purpose or that can be more economically purchased at a particular time.

Chapter Five

5.0 Summary, Discussions, conclusion and Recommendations

Having discussed so much in preceeding chapter of this research work, I felt that the only effective way to end a research, work of this magnitude is based on the findings for better performance and maximize profit in the organization Peugeot Automobile Nigeria Limited Kaduna.

5.1 Summary of Procedure

One objective of the research work is to observe how Peugeot Automobile Nigeria limited carryout it’s storage procedure, considering he established way of practicing it and by the virtue of the fact that this research is a case study that highlighted the storage problem, facing the organization and its effect on stores during the research ranging from the introduction of the subject matter, statement of problem brief history of the organization, how the organization share its materials and so on.

Some of the problem confronting the organization range from management in experience to inadequate trained store personnel and insufficient working material e.g. handling equipment in the store house.

There is problem of improper coordination of storage activities which passes great problems to store personnel in carrying out their duties without supervisor and this brings about inefficiency.

Late delivery of materials for production of the organization is a problem which arises as a result of lack of transportation facilities, the researcher observed the following problem in the day operation of the store house, there is no adequate security of the store house.

5.2 Discussion of Findings

Based on the data collected and analyzed above, the following are the major findings. It was discovered that store verification contributes to store efficiency. This is evidence in the store of 64 respondents which is the high test rating of the item in variable one.

Variables two has the 48 respondents as the highest in the item which strongly agree that stock checking is necessary to ascertain the true position of stocks. According to Jain and Aggarwal states that stock checking is to check the incoming materials with regards to count kind, quality and conditions of the item.

Another finding is on variable three which has 36 respondents who agreed that there is need for stock records to be maintained in the store. According to Jain and Aggarwal which defined stock records as the documents which record from day to day, full particulars of individual receipts, issues and balances of stock.

Under variable four in the researcher’s findings 64 respondents strongly agreed that discrepancies are sometime discovered during stock taking.

Under table 2 variable one 1 respondent strongly disagree that the present method of system used in the stores increases number of obsolete materials in the store. According to Lysons and Gillingham defines store as the physical holding in stores of stocks or supplies awaiting issue or transport to customers and also variable three with the maximum respondents of 3 did not agree that there are adequate storage facilities provided in the store.

Under table 3 variable two 80 respondents strongly agreed that the unit loads are normally handled more safely with mechanized devices. Acceding to Jain and Aggarwal defines unit loads as the key to mechanized handling for

many transport operations. And also variable three with 39 respondents did not agree that the material used in the organization is conveyed by ships.

Finally in every organization storage and material handling should be efficiency and effectiveness in stock regulation.

5.3 Implications of the Findings

This information was obtained through questionnaire personal interview and physical observation.

The researcher discovered that the company does not train it’s store personnel, mostly the senior staffs in the course of the research work. The researcher also discovered that the organization install computer for the management function, but the store, dependent exchange from the utilization of the computer system.

The researcher in the course of this research discovered that the organization is constantly experiencing late delivery of materials placed on purchase order from their prospective supply sometimes the organization buy materials at exorcist prices to meet up with demand as they arise.

In the course of this research work, the researcher discovered that the organization lack storage facilities such a s racks, bins shelves and so on for storage of their materials. This often result in some of the materials being stored on the bare floor without necessary care.

5.4 Conclusion

The research based on the frame work of the researcher have endeavour to evaluate storage procedure of Peugeot Automobile Nigeria Limited kaduna with it’s practical activities bearing in mind the aspect of the subject matter.

From the various findings from personal interview observation and researcher work, the practices of storage function and consistence with the existing knowledge ands views, there are still rooms for improvement in order to enhance efficiency and profitability with consciousness of modern changes.

5.5 Recommendations

Putting the foregoing into consideration the researcher hereby makes the following recommendation for an effective and efficient storage procedure.

  1. The storage department should be given the responsibility to receive materials for proper control and because they are the custodian of all materials in the origination.
  2. Coding system should be employed to identify the materials in the store. The benefits that may be derived from this include: –
    • Avoiding of repeated use of long descriptive title
    • Reduce of varieties
    • Implication
    • Accurate identification of items
  3. The organization should provide mechanical handing equipment like (fork lift) truck for loading and movement of materials from one store house to the other. Fragile items especially will be protected against breakages.
  4. Storage procedure should be well coordinated to ensure proper performance on the part of the store personnel.
  5. Expending term should be formed to cater for the timely deliver of materials to meet up with the production schedule.
  6. The management should ensure jobs security without the assurance, workers tend to show their indifference towards their job, since they feel that dismissal letter can be delivered any time any moment working under tension should be prohibited.
  7. There is also need for the store department of the organization to be fully staffed with efficient and trained staff.
  8. The organization should also embark on the intensive training programme for its personnel by sending them to institutions of higher learning bring about better performance of duties. The unqualified store staff should be sent on short term course in the store administration this will enable them to acquire basic knowledge on storage procedures.
  9. The store should be designed to accommodate them to different sizes, nature and shape fire fighting facilities should be provided and it is also advantageous to seek the advice and guidance of the local chief fire officer the used precaution taken when there is an out break of fire.
  10. Smoking on the premises is for bidden and notice pasted to this effect.
    • Workers and store personnel are trained on fighting any outbreak of fire.
    • Appropriate fire precaution equipment is provided, extinguisher axes, fire bucket etc.
    • The procedure for calling fire brigaded in case of need should be well published to the notification of the entire staff.

On the whole, the effect of these various recommendations would involve money for its full operations.
However, the economic to be gained from increase efficiency and accurate performance of the storage procedure and accurate performance of the storage procedure will certainly effect these cost on the long run.

5.6 Suggestion for Further Studies.

This research work or the scope of the research cover the area of store and material handling.
There are other areas which are not touched under this topic “impact of storage and material handling on store efficiency”, which are mechanical handling, equipment selection, automated storage, handling and retrieved systems, conditions favouring automated storage and handling physical verification, issue of materials, classification and coding of materials, investigation and analysis of discrepancies according to causes for corrective action.

Therefore other researcher should go into this area of study or they should continue to research in this area so that to contribute positively in the profitability of the organization because the field of research is wide and this present research work cannot be the end of this research in the topic “impact of storage and material handling on store efficiency”.

Impact Of Storage And Material Handling On Store Efficiency

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