Materials Management In A Manufacturing Company (A Case Study Of Nigerian Bottling Company Plc, Benin City)

Project and Seminar Material for Business Administration and Management BAM

Abstract

Past studies have shown that the poor performance of many firms in Nigeria is due to their inability to manage the relationship between suppliers of input and the operation of the firm. This study is therefore designed to examine how manufacturing firms manage their materials. Secondary data were collected on the inventory of material in Nigerian bottling company Benin City plant. Table and simple percentage was used to analyze data collected. Findings indicate that the method used by Nigerian Bottling Company to maximize their inventory of both materials and finished product is not efficient because the naira saved in the course of purchase have more effect on the profit of company in production/selling. This is why purchasing should be cost effective. Recommendations include an adoption and application of the EOQ model in order to save cost and make their operation more efficient. This will make Nigerian Bottling Company product more comprehensive and perhaps enable them gain competitive advantage. The conclusion suggest that EOQ model reveals the cost saving and total inventory of materials use in production and effective management and control leads to efficient operation cost.

Chapter One

Introduction

1.1 Background to the Study

As a manager in a manufacturing company it is more necessary than ever to improve the overall productivity of the operation while such improvement requires an integrated effort involving all functional areas of the facility, specific actions are required within each functional area one of the functional areas in a manufacturing operation that is critical to the overall productivity of the company is material management. The material management involves purchasing supplier management, material handling within the facility and extensive coordination among all functional areas of the facility in conjunction with material management sapiens, Jazayeri (1998).

Once the production process is under way the attention of the operations manager shifts to the daily activities of material management the daily composes materials purchasing, inventory control and work scheduling.

Material management has a philosophy close to that of a modern marketing. In marketing the organization and its staff has to think in a marketing oriented way for example how will customers react to product change? What will be the effect on sales if we alter the packaging? With material management the same principle apply the organization and its entire staff have to consider their decision in relation to how they will after it the material side of the business topics under material management include purchasing, control, transportation, material production, planning stores, inventory control Bret (2001).

Therefore, the main point of materials management is to satisfy the need to all operating system such as manufacturing production line, promotional activities and physical distributor times. It is the operation as the customer, manager must work around the system till everything his and needs are satisfied. The material manager organization and it entire staff should however consider their decision in relation to how they will affect the materials side of the business. It is in view of the above stated facts that this study is being carried out using Nigerian Bottling Company PLC Benin City plant a manufacturing company to study the issue of material management.

1.2 Statement of Research Problem

The major challenge that material manager face is maintain a constituent flow of materials for production. There are factors that inhabit the accuracy of inventory which results in production shortages premium freight and often adjustments.

According to the journal of Business logistics (2009) vol1 22 part 2. The major issues that all material managers face are incorrect bills of materials, in accurate cycle counts, unreported scrap shipping error, receiving errors and production reporting errors material managers have strived to determine how to manage these issues in the business sectors of manufacturing since the beginning of the industrial revolution. Although there are no known methods that eliminate the afore mentioned inventory accuracy, inhibitor there are best method available to eliminate the impact up on maintaining an interrupted flow of materials for production. Reluctance can be reduced and effectiveness when service point are clustered to reduce the amount of reluctance. An effective material management program can also revolve island approaches to shipping, receiving and vehicle movement solutions can include creating a new central loading location as well consolidating service areas and docks from separate building into one. Developing better circulation infrastructure also means reevaluating thick delivery and service vehicle routes. Base on above statement that this research seek to examine the issue of material management and the effect it has on an organization using a manufacturing company as the case study.

1.3 Research Objective

To examine the level of efficiency and product improvement in material management.
To investigate whether the material management practice permit high stock turnover validation.
To proffer useful suggestions and ideas on how to effectively manage materials in an organization (Sander 2002).

These objectives are intended to be addressed in this study.

1.4 Research Hypothesis

Hypothesis One

Ho: There is no relationship between material management and organizational performance.
Hi: There is a relationship between material management and organizational performance.

Hypothesis two

Ho: Material management has no positive impact on the effective organizational management.
Hi: Material management has positive impact on the organizational management.

1.5 Research Questions

To what extent does material management contribute to an organization performance?
Does specification on materials have any (positive or negative) on the effective material management.
To what extent does effective material handing help in the enhancement of un interrupted production?

1.5 Justification of the Study

A research of this native is significant in sense that the area of material management is one that requires constant research. It is belief that the study will throw light on the essence and importance of material management in an organization and the choice of Nigerians bottling company as my case study is due to the fact that it is a large scale manufacturing company which the setup provides for the study of this nature.

1.6 Scope of the Study

This research study centred on materials management in a manufacturing company. It covered such areas as storage, transportation procurement, materials handling planning control & value engineering etc. the research is also intended to cover a specified period of time range from 2009-2011 also information are going to be drawn within the domain of Nigerian Bottling company Plc. Benin City.

Chapter Five

Summary of Findings Conclusions and Recommendations

5.1 Summary of Findings

Material management has been defined as the total of all those tasks, function activities and routines which concerns the transfer of external materials and service into the organization and the administration of the same until they are consumed or used in the process of production operation or sales.

The research work has come up with the following summations.

For a company to be highly efficient in handling and management of its materials, it has to at least once in a month, do stock taking and stock checking of its material.
Forecasting for material requirement helps the organization to have smooth operations. In order for materials managements to plan effectively and accurately relating to both the present and the future and this will help the organization to have an efficient and efficient performance.
The company has to establish an efficient communication system in the organization to ensure that the information required are communicated at the right time and to ensure that decisions based on stock control are correct.

However, this study has able to establish that effective materials management contribute to the success of Nigerian bottling company, Plc Benin City plant as the case study

5.2 Conclusion

The creation of management within the procedure of purchasing and storing activities is nothing but to see that the store department which houses the purchasing section achieves its goals.
Based on the findings from the investigations carried out for the purpose of this research work, the following conclusions have been made.

The manner with which materials are handled can have serious effect on the company that is, if materials of complex nature or high values are mis-handled this could lead to damage or deterioration of materials which may render them useless by the user’s department and also constitutes a great loss to the organization so to avoid this, materials should be handled in the best manner.
That complete specification by the user’s department enables to purchasing department to suitable suppliers with suitable materials.
That the naira a saved in the course of purchase have more effect on the profit of the company either in production or selling. This is the reason why purchasing should be effective.
That stock taking and proper stock checking are essential for effective material management
That the results reveal that effective materials management contribute to the success of an organization.
That effective management and control leads to efficient operation cost.

5.3 Recommendations

From the fore going investigations and findings the following recommendations are offered with the hope that they will help in improving the efficiency of the company and also increases their profitability.

Adoption & application of EOQ model for total inventory cost and cost saving effect of economic order quantities.
The materials are manager must ensure the necessary materials are supplied to user’s department at the right time, the right operation and quantity so as to effect efficient operations.
The store officer must ensure regular inspection of all stores especially areas in which materials are stored and handled.
The company should stock to the use of automated material handling system, by this damages piliferage and deterioration etc which are caused as a result of the use of crude method of materials handling reduced.
Adequate safety and security of staff particular in stores, factory and other departments must be ensured (i.e. protective clothing e.g. gloves safely goggles, helmet etc must be used when needed so that maximum productivity can be attained.
The storekeeper must ensure that must ensure that materials are not carefully discard e.g. empty bottles
The receiving department should be given a purchase order copy of each material purchased, so that the receiving officer will know that deliveries are expected and when
Materials should be tested by a qualified control employee before being place in storage
Stock movement should be adequately documented i.e. whatever received and issued
It is also recommended that government should assist companies in industry in the importation or so some and materials since local raw materials cannot meet or satisfy their present demand.
All above recommendation, if adopted will assist the organization and consequently guarantee effective and efficient materials management in an organization.

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