ABSTRACT
This study the examiners the problems of Material Management in the Manufacturing Industry. It is a survey conducted in five manufacturing companies in Port-Harcourt and Obio Akpor Local Government Area of Rivers State. The respondents from the five selected companies formed the sample size of this study. The choice of the researchers to conduct this research, using the five selected companies of study from the afore-mentioned Local Government Areas in Rivers State was informed by the fact that the bulk of manufacturing firms in Rivers State are concentrated in these areas and the firms chosen are in the judgment of this researcher, a true representation of the target population. The study aims at identifying and ultimately suggest ways of controlling the problems of material management, as it affects the manufacturing companies in Rivers State and the nation at large. The study was conducted through the use of questionnaires and personal interviews. The responses elicited were analyzed using the simple percentages and the Pearson Product-moment correlation. The hypothesis of this study was tested using a non-parametric statistical tool-the chi-square (X2) statistics. It was revealed that the companies actually have a formal material management department, but the problems of adequate control procedures. The relationship between the materials’ management department and other departments of organization are not very cordial. It was also revealed that materials budgets constitutes more than 60% of the overall production budgets of the firms. The analysis of the study proved also that Pilfering Receipt of sub-standard materials, poor relationship with the design engineers and lack of overall control, over the various parts of the system working independently of each other, formed the major problems. There should be improved information processing and communication network equipment. Staff in the materials department should be encouraged to undergo specialized training. Management should engage only qualified personnel in the materials department and also put in place a sound security network.
CHAPTER ONE
INTRODUCTION
1.1 Introduction
It has been observed that in recantation there has been a growing emphasis on the importance of coping with the problems of material management. This does not seem to leave any element of doubt when one reasons the materials cost element of product. It is no exaggeration for one point out that over 50% of the total cost of production of a product is represented by direct material. Large amount of capital invested are locked up in stocks of materials the cost of maintaining these stocks is quite enormous. While this is of serious consideration, organizations of recent have also relentlessly taken steps to more forwards efficiency and effectiveness at attempting to optimize the material resources in their activities. It is no wonder we have some organization having a full-fledged on sub-department devoted to material management. It must be stated that material management is no doubt very important to firms especially those of the manufacturing industry as they are known to always getting raw materials for their production, machine tools and spare parts to keep their machines functioning as well as stationeries. The efficient operation of a factory cannot be dispersed with a well plan of material flow. Too great a supply of stock witnesses high storage costs. Excessive lock-up of capital, shortage of valuable space, obsolesce and stock loses. On the other hand, a short supply will result in reduced output as well as under utilization of plant.
Material management is one of the dynamic functional areas of production. Rose (2000) defined Material Management as “the planning, directing and coordinating of all those activities concerned with material and inventory requirement from the point of their inception to their introduction to the manufacturing process”. It begins with the determination of material quality and ends with the issuance to production in time to meet customer’s demands on schedule and at the lowest cost. Material management can be seen as integrated functions of inventory control. Stock keeping, purchasing, receipt and inspection, warehousing, material handling, transportation and disposing of surplus and salvages. The main objective of Material Management is to provide the right quality and quantity that satisfies the needs of right operating environment at the right time minimum cost.
In Material Management, the problem of establishing the optimal stock level is a difficult problem, which must be contented with in order to ensure the continuity of the operating plants and general operations.
1.2 Background of 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 area 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, 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 tis entire staff have to consider their decision in relation to how they will go after it the material side of the business topics under materials management include purchasing, control, transportation, material production, planning stores, inventory control Bret (2001).
1.3 Statement of the Problem
Despite the importance of and the need for a well planned flow of materials a tool for organizational efficiency, most manufacturing organization have continuously been characterized and crippled by the problems od material management. The need to fore still these problems has received growing attention and is even reflected within the world of academics as scholars developed course and even extensive research work into the science and logic of Material Management.
Material management has a problem of development in relation to several facets. Most often than not, the quality of staff in the material area are low endangering the possibility of sound initiatives and growth hand to arise in this area. This is informed by the fact that in most organizations, material department are created as extensions of either the production or account department. For Material Management to create its impact in an organization the quality of staff has to be high as compared to other department and it must be given a separate department distinct from the production or any other department.
Another issue that has consistently plagued Material Management is the problem of communication, there has always been poor communication between material department and either the production, finance or marketing department. On issues affecting the cooperate health of the organization, it is noted that the material manager may contend with little influence on decisions taken by either the production manager or the marketing frequent schedule changes, inadequate specifications, and of balance inventories and poor relationship with suppliers are among the difficulties, which have been deemed as resulting from the foregoing problems.
Investigations have also revealed that categorizing of order materials is one of the major problems of MATERIAL Management. Material ordering is a complex process that to a great extent determines the dexterities of the material manager and possibly brings to mortality the existence of an organization if not properly carried out.
It therefore implies that for an effective and efficient Material Management policy to be put in place, which will ultimately ensure continuous plant operations, there is the important need of identifying the problems of Material Management.
1.4 Research Questions
In order to achieve the objective of the study as stated above, the following questions will guide the researcher.
- What are the problems of Material Management?
- What factors are responsible for Materials Management problems?
- What factors are responsible for the breakdown of the production plant?
- To what extent does Materials Management efficiency affect plant efficiency?
- Where do Materials Management problems and their source arise from?
1.5 Objectives of the Study
With hunger and unemployment starring at us in the face despite repeated efforts to increase the manufacture of goods and services, the researcher is of the opinion that the problems of Material management of our manufacturing firms are the major causes of the incessant scarcity of goods and services prevalent in our society. Sometimes a situation of abundance exist in some sectors of our economy causing certain products to perish while at the same time, shortages and scarcity pervades other sectors the reasons of this state of affairs are not farfetched.
Some people hold that the middlemen are responsible for this trend, being that they buy at a very low price and sell at a very high price. Others content that our allocation mechanisms is not appropriate and our manufacturing productive capacities and resources have not been exploited fully hence this situation is unavoidable. While these contentions are true to a certain extent, it should be borne in mind that they are mere speculations lacking substance, hence the problems have persisted.
The truth remains that, organizations at all level find themselves embrioded in problems, which take root in Material Management. Many business failures are directed towards growth of expensive inventories or too little inventories. Too little inventories precipitate the problems of low output and under utilization of plant etc.
Every plant breakdown is invariably linked to Material Management in the long run and given its consequences in the form of scarcity of manufactured goods, coupled with the attendant social and economic losses to the society, it suffices to say that the need to identify and address the problems of Material Management is very pertinent and cannot be over emphasized.
It is in the light of the foregoing that this study seeks to identify the problems of Material Management with a view to proffering possible solution to the and ultimately reducing if not completely over-hauling the problems of plant breakdown in the manufacturing firms.
1.6 Significance of the Study
The importance of Material Management as a tool for efficiency in our manufacturing industry cannot be overemphasized. This is informed by the fact that the economic strength and prosperity of any country depends more than any other factor on the effective management of all its natural resources.
It is envisaged therefore that the results of this research should necessitate the exposure of the major problems in our manufacturing companies, responsible for plant breakdown and low productivity. The study will be useful to decision makers in the manufacturing companies. It will also be useful to potential business owners who may have vested interest in the manufacturing industry in Rivers State.
Apart from its value to practitioners of management, this study will be of immeasurable importance to students and lecturers of the faculty of Management Sciences who may like to further their understanding of the problems of Materials Management in the manufacturing industry.
Lastly, it is believed that this study will stimulates further studies on the problems of Materials Management.
1.7 Statements of the Hypotheses
In view of the objectives of this study and the problems as aforementioned, the following hypotheses will be tested.
HO1: There is no significant relationship between the problems of materials management and the failure or frequent breakdown of the operating plant.
HO2: There is no positive and significant relationship between the problems of materials management and poor communication.
1.8 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 on an organization and the choice of Nigerian Engineering Works, Michelin Nigeria Limited, Eagle Cement Plc, Horizon Fiber Nigeria Limited and Riv. Biscuits Nigeria Limited as my case study is due to the fact that it is large scale manufacturing company which the setup provides for the study of this nature.
It is the operation as the customer, manager must work around the system till everything and needs are satisfied. Therefore the main point of material management is to satisfy the need to all operating system such as manufacturing production line, promotional activities and physical distributor times. The material manager organization and it entre staff should however consider their decision in relation to how they will affect the material side of the business. It is in view of the above stated facts that this study is being carried out using Nigerian Engineering Works, Michelin Nigeria Limited, Eagle Cement Plc, Horizon Fiber Nigeria Limited and Riv. Biscuits Nigeria Limited a manufacturing company to study the tissue of material management.
1.9 Scope of the Study
The scope of this study is limited to some selected manufacturing firms in Rivers State. Due to the fact virtually all the manufacturing firms in Rivers State are concentrated more to certain areas than other, this study will be restricted in the following manufacturing companies in Port-Harcourt Local Government Areas respectively:
i) Nigerian Engineering Works
ii) Michelin Nigeria Limited
iii) Eagle Cement Plc
iv) Horizon Fiber Nigeria Limited and
v) Riv Biscuit Company Limited.
It is hoped that this sample size so selected will guarantee an adequate representation of the urgent population.
Owing to the fact that researchers I Nigeria generally are usually faced with a number of personal and environmental problems, this research was not exceptions. In the course of the study, the researcher experienced some a problem chiefly amongst which was the incorporating attitude of some of the respondents, which was quite discouraging. Other major limitations include lack of finance, time and effective means of retrieval of the questionnaires and other information relevant to this study.
1.10 Definitions of Terms
The purpose of this section is to define clearly the operational terms used consistently in this research work, which will help the researcher to carry out the study successfully. Accordingly the following terms are defined as use in this work.
Management: It is a composite process of planning, organizing, and directing and controlling enterprise function to achieve se objectives.
Problems: It defines issued that hamper and hinder the effective and efficient running of an organization in order to achieve set goals and objectives.
Procurement: This involves the collection of purchase request, invitation of vendors for building, issuing of local purchase order (LPC), accepting the goods and paying the vendors.
Traffic: This is the physical movement of material throughout the production stages of purchasing, work-in-progress, warehousing, supplying and distribution of finished goods.
Materials: This comprises of all physical and raw materials employed in the process of production in order to achieve the set objectives of an organization.
Warehousing: This is the building of material awaiting order picking.