Role Of Material Management In Production Activities

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Role Of Material Management In Production Activities


Abstract


This research work examines the roles of material management in production activities a case study of Lexos paint Limited, Port Harcourt Rivers State. Four objectives and research questions were formulated. The target population of the study was 150 employees and 500 customers of Lexos paint limited. A sample of 150 respondents was selected from this population using the stratified random sampling technique, where 50 workers from the departments, which directly deal with materials, were selected which include: production, Purchasing, quality Control, Warehouse/store, Human Resource Development, Finance and audit and physical Distribution departments and 100 customers. Data was collected through a structured questionnaire, consisting mainly of closed ended and open-ended questions. The study discovered that material management used by the organization adds to the profitability and production of the company, sufficient storage facilities stops interruption on production process amongst other things. As an outcome of the above, it was suggested that there should be respectable record system of materials for the processes of the organization as it influences production and the training of staff to obtain new skills and knowledge required for the work for the profit of the organization. Materials management is a tool to optimize performance in meeting customer service requirements at the same time adding to profitability by minimizing costs and making the best use of available resources. The main objective of the study was to assess the role of materials management on organizational performance.


Chapter One


1.0 Introduction

1.1 Background of the Study

In recent years materials functions has experienced total information by business management. It is the least of the responsibilities and authorities for making major contributions to projects and it has yielded positive result in the business world.

In most business operations today, the cost of materials has an important role in fixing the price of the finished product .This is because when materials are bought with high prices, the finished products coupled with the production activities will also be of high price.

The phenomenon determines whether the company will make profit or incur lost at the end of the production.
Therefore, efficient and effective management of materials are essential for the survival of any organization. It also reduces the problems encountered during production activities.

Materials management concept brings together under one manager the responsibilities for planning, organizing, controlling, motivating of all those activities principally concerned with the flow of materials into an organization. It is also concerned with production and control of activities involved in acquisition and use of materials in the industry.

Brief History Of The Company

The name of the company is Lexos paints Limited. It is indigenous company incorporated under the law of the federal republic of Nigeria carrying on business manufacturing of domestic and industrial paints for the building/civil engineering sector of the economy.

The corporate office is located at no.3 Elebor street, off Zulu Hotel Limited, Oroworokwu town port Harcourt River’s state .while the factory is located at location road oyigbo Port Harcourt, River’s State.

In the paints industry, lexos paints Nigeria Limited are a specialist in domestics and industrial coatings. The minor civil works such as POP Designs and manufacturing/ production of filler.

Lexos Paints Product / Features:
Product Line:-

The company has varieties of products in the products line. They include the following:

Adhesives:
  • Lexus stick [gum/glue]
  • Thinner [wood finish]
Decorative Coatings:

– Lexos Emulsion
– Lexos Texcote
– Lexos printer/Gloss

Protective Coatings:

– Industrial coating
-Marine paints
-Auto-Mobil paints

Production Features

The company’s value product can be distinguishable by the following technical analysis:

  • Water resistance 75%
  • Product courage 16mtrs/squre meters
  • Anti-fungi 80% [because of Anticide]
  • BG/Acrytex are used]
  • Stability 100% [because of Acrylics binders]
  • Weather 100% [adaptability]
  • Binding 85% [on a well treated wall]
  • Coloring Stable (according to client specification)

1.2 Statement of Problem

In the recent times, companies has been facing the problem of getting materials of the right quality, quantity, and at the right time and from the right source as a result of change in taste, fashion, technology, population etc. This means continues in the future because human beings are insatiably.

As a result of this production of activities has been hampered in this present time, in order to reduce the problems that will arise from the above mentioned changes, materials management department or another related organizations gives solution to it. This is to ensure that the problems are reducing the cost associated with the changes. The problems are thus listed below:-

  1. The trend in lexos paints industries towards the production of an increasing number of highly specialized complex materials and components.
  2. The re-occurring shortages of basic materials in stores department of lexos paints in Port Harcourt.
  3. The increasing use in business of computers and related electronic data processing equipment in lexos paints industries.
  4. The current trend towards factors automation in lexos paint industries.
  5. The increase rate of unqualified and inexperienced personnel found at different units of material management department of lexos paints industries.

1.3 Objective of the Study

The role of materials management center’s on the co-ordination and control of materials activities with the view of reducing total materials cost and maximizing profit. In view of this, the objectives of this study in Lexos paints industries Nigeria Limited will include:

  1. To find out in details the extent to which materials management approach has been adopted.
  2. To find the best means of reducing overall cost of production through efficient management of the materials either as raw materials, bought out stationery, office furniture and fittings.
  3. To examine, so as top come up with a better way of improving co-ordination and control of the various production activities that contribute to the total costs by advocating for material management type of organization.
  4. To examine the caliber of staff involved in the various activities of material management.
  5. To find out ways and means of reducing the re-occurring shortages of basic materials as seen in today’s economy through solisticated planning for sources of materials and acquisition within increasingly severe cost constraint.

1.4 Significance of the Study

The findings of this research work on the role of materials management in production activities is mainly designed to enhance activities. The findings also eliminate the poor performance of purchasing department in carrying out of procurement activities. It will also be of good help to the student carrying out this project work and other students in purchasing and supply management.

Lastly, the study will be of great benefit to Lexos paints industries Nigeria Limited and other companies with similar procurement problems.


1.5 Research Question

  1. How does the organization utilize materials to achieve effective production?
  2. Does efficient materials management contribute to the profit of the organization?
  3. Does the organization experience production stoppage due to lack of required raw materials and components for production?
  4. Does materials management department contribute to efficient production activities in an organization?

1.6 Research Hypothesis

A hypothesis may be defined as a declarations statement relationship between two or more variations used for better understanding of the problem of the study.

The null and alternative hypothesis has been set out by the researcher to find ways of solving the problems. In carrying out this research, the researcher is using both (Ho) and alternative (Hi) to find out the role of material management in production activities.

Hypothesis 1
  • Ho: Efficient materials management does not contribute to the profit of the organization.
  • Hi: Efficient materials management contributes to the profit of the organization.
Hypothesis II
  • Ho: Co-ordination of materials management functions does not lead to efficient production.
  • Hi: Co-ordination of materials management functions lead to efficient production.

1.7 Scope of the Study

The research work meant to cover the role of material management in all industries as it relates to production activities. But as a result of time constraint, insufficient resources like finances and data etc. the researcher limited the research work to Lexos paints industries Limited information obtained will be used for generation, for other organization in the industry.


1.8 Limitation of the Study

The researcher in the course of carrying out research work contained some problems which in one way or the other limited the source of carrying the project study further few ones among then include:

1. Inadequate Finance:

Constraints stands as one of the factors that make it impossible for the researcher to go around for this study, considering the fact that the researcher is a student and conserving also the huge transport fare that is involved, it is rather tasking and difficult.

2. Time Constraint:

The researcher being a student and has a lot of academic work to pursue, instead of examining all the roles of materials management in production activities in most notable industries, the researcher limited his study to Lexos paints industries Nigeria Limited Port Harcourt.

3. Non-Resources:

Most of the people interviewed in the course of carrying out this research were ignorant of the subject of the study. They failed to give elaborate information about the organization despite the fat that the information given will be confidential. Books related to materials management was unavailable in some of the library visited by the researcher.


1.9 Definition of Terms

Dispatching:

This is the selection of assignment of jobs by an individual work centre on the shop floor. A dispatch list is a schedule for a particular center. This can be generated easily by a computer and it’s issued daily showing the priority sequence of jobs to be done at the work center.

Materials Management:

Materials management is a concept which being together under one manager the responsibilities principally concerned with the flow of materials into an organization. As such it is concerned with production and control of activities involved in the acquisition and use of all materials employed in the production of finished goods.

Production Activities:

These are activities that goes on in the production department like production planning and control which involves programming and dispatching.

Materials Activities:

These are activities that have to do with materials, like purchasing, stocking, controlling, distribution and receiving, storage of inventory, packaging and production control.

Production Planning And Control:

This is responsible for producing detailed schedules of part material required to be produced or manufactured in order to realize the out come of the production programmed or sales forecast approved by the management.

Processing:

It is a control method used in measuring and feeding back information about various achievement and plan to take corrective action.

Storage:

This involves the physical handling and housing of parts and materials either as bought or in various stages of manufacture or as a finished product for sale.


Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

Many business organizations in Nigeria fail to value the role of materials management in improving their productivity. In most situations, the function seems to be a reserve in the system, while in other situation the roles are actually applied firmly. Some organizations are of the certainty that material management is just a regular function of the procuring department thereby moderating it to the background. Rising from this backdrop, this study specific aims are finding out how an organization utilize materials, how efficient the material is and how effective material management can increase the production and stop material wastage. The empirical analysis of the study focused mainly on the Lexos paint Limited. The target population of the study was 150 employees and 500 customers of Lexos paint limited. A sample of 150 respondents was selected from this population using the stratified random sampling technique, where 50 workers from the departments, which directly deal with materials, were selected which include: production, Purchasing, quality Control, Warehouse/store, Human Resource Development, Finance and audit and physical Distribution departments and 100 customers. Data was collected through a structured questionnaire, consisting mainly of closed ended and open-ended questions. .The study discovered that material management used by the organization adds to the profitability and production of the company, sufficient storage facilities stops interruption on production process amongst other things. As an outcome of the above, it was suggested that there should be respectable record system of materials for the processes of the organization as it influences production and the training of staff to obtain new skills and knowledge required for the work for the profit of the organization. Materials management is a tool to optimize performance in meeting customer service requirements at the same time adding to profitability by minimizing costs and making the best use of available resources. The main objective of the study was to assess the role of materials management on organizational performance.


5.2 Conclusion and Recommendation

Although the situation being experienced in the practice of raw material/inventory management today is to say the least, disheartening; given the poor level of computerization, the degree of inability in the use of models for inventory decision making, the involvement of illiterates and non experts in the management of raw materials and inventory; the prospects for improvement are evident.

This however, is hinged on the preparedness of managers of manufacturing organizations to be responsive to suggestions from within the business and the academic communities and take steps towards achieving efficiency in the practice of raw material management. Having this done, the prevailing problems of incessant stoppage of production, low level of capacity utilization, inability to meet production targets, poor liquidity and other identified problems will be addressed. Based on the findings, it is inevitable to provide recommendations to the management of Lexos Paint ltd. Lexos, and other Paint companies on how to boost Materials Management in Lexos Paint Companies. The study recommends that there is need to enormously employ inventory control systems and information and communication technology especially in Material managemeent so as to excel and guarantee its future, hence improving organizational performance. Further, the study recommends that the Lexos paint Companies in port harcourt should increase their resource commitment to staff training and Research and Development in materials management so as to develop the necessary skills, update their knowledge, and enhance New Product Development.

Finally, the study recommends that there is need for organizations to adopt the use of information technology, that will not only help in information sharing, but also will help in hastening orders from suppliers hence shortening the lead time. Further, the study recommends that the organization form an expediting committee that will help in following up of orders with the suppliers hence delivering the products at the right time.

Materials Management Department therefore should to support the management of an organization in the production activities. It should help in marketing, selling, promotion and even control of all types of materials for its quantity, quality and cost.


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