THE IMPACT OF EFFECTIVE MATERIALS MANAGEMENT IN A MANUFACTURING COMPANY (A CASE STUDY OF OKIN BISCUIT COMPANIES OF NIGERIA P.L.C)
For better linkage and proper understanding of this research work, it is divided into five chapters.
Chapter one comprise of the introduction of project topic, introduction of the study, importance of the, definition of key terms and concept plans of the study.
Chapter two take a look at the literature review with emphasis on the concept of leadership, the meaning of organization, the relationship between leadership style and their applicability.
Chapter three comprises of the research methodology and various sources of data collection population group and sampling technique and the historical background of the impact of effective materials management in a manufacturing company its organization structure of the impact of effective material management in a manufacturing company.
Chapter four deals with data presentation and analysis, result and findings while its last chapter which is chapter five deals with summary of the findings, conclusion and recommendation for further research work as well as references.
TABLE OF CONTENTS
Table of contents
1.1 Statement of the study
1.2 Objective of the study
1.3 Significance of the study
1.4 Statement of the Hypothesis
1.5 Scope and limitation of the study
1.6 Historical background of the case study
1.7 Organization chart of the case study
1.8 Definition of Terms
2.1 Definition of material management
2.2 Source of raw materials
2.3 The make or buy decision
2.4 Factors affecting the size of raw materials held in stock
2.5 Costs of associated with raw materials
2.6 The inventory management system
2.7 Management companies
2.8 Characteristics of manufacturing companies
2.9 Types of manufacturing companies
2.10 Factors affecting the operation of each company
2.11 The impact of material management on manufacturing companies.
1.2 Research methodology
3.1 Data collection Research method used
3.2 Instrument used in data collection
3.3 Research population and sample size
4.0 Data presentation analysis and interpretation
4.1 Introduction (Theoretical Essay Writing)
5.0 Summary of findings, conclusion and recommendations
5.1 Summary of findings
The manufacturing sector plays an important role in the Nigeria economy and has benefits that are crucial for her economic transformation in a typical advanced economy, the manufacturing sector is leading, if not the only leading sector in many aspects .it is an avenue for increasing productivity related to import replacement and export expansion creating foreign exchange earnings capacity raising employment and per capital income which results in unique consumptions.
Before independence, agricultural production dominated the Nigeria economy and accounted for the share of its foreign exchange earning.
Initially, inadequate capital investment permitted only modest expansion of manufacturing activity ,early effort in the manufacturing sector were oriented towards the adoption of import substitution strategy in which light industry and assembly related manufacturing ventures were embarked upon by the formers trading companies.
The structural adjustment program (SAP) of 1986 was partly designed revitalize the manufacturing sector of the economy by shifting emphasis from sourcing for inputs from abroad to increase domestics sourcing through monetary and fiscal policies deregulation of the foreign exchange market was also effected to make non oil exports more competitive .although this equally resulted into massive escalation of input cost.
The overall feeling and the simple truth is that Nigerian economy sis still in the woods, the business environment is particularly hostile to industrial harmony and higher productivity, putting into consideration the past decade and even the present one, would see that the economic variables of the external business environment which are uncontrollable in nature have had negative effect an production activities .
Therefore, for a business to survive, remain profitable and enhance its production activities it must adopt strategies aimed at effective and efficient management of its resources to keep it and course,
These resources are mainly human and material but for its purpose of this project we are concerned with the raw materials varying from the initial sourcing to the final utilization in order to get the final goods
Material management is the act of co-coordinating all material resources available within the organization in the most economic way that guarantees the right quality soas to make goods available to customers as when needed in an attempt to achieve the overall broad objectives of the organization optimum use of them by ensuring available of materials needed at the right price, quantity, quality, from right supplier and delivered at the right time and place.
The price, quantity quality, time and sources already mentioned are controlled variable belonging to the internal environment of the business which can be managed with proper plans put in place.
Nevertheless, the greater challenge facing a business as it affects material management in production deals with the uncontrollable variable of the external environment which needs to be manipulated particularly in battered economy like ours.
1.1 STATEMENT OF THE STUDY
The subject of material management cannot be overemphasized in manufacturing companies today a failure to take cognizance of it has resulted in the winding up of so many company in present times because proper management of material was not done this has led to tying down of capital breakdown in production activities, reduced sales and profit, increase waste and scrap, loss of customers to competitors and even fall in our foreign exchange earnings.
Since this problem is true of many manufacturing companies in our economy, the question that came to mind which this project will highlights are:
1 How far has material management gone in solving organizational problem?
2 What effect does material management has on the employees, company and their output?
3 What are the costs, techniques organization employ to in the management of materials?
4 How many manufacturing companies in Nigeria have coping with the limited sources of raw materials.
1.2 OBJECTIVE OF THE STUDY
This study aims at under-listed objectives;
1 To examine how raw materials can be made available course of source from abroad.
2 To highlight strategies and sub-strategies that can be adopted in order to develop alternative mean of getting raw materials soas to guarantee availability as at when needed.
3 To identify the role of material control effective management of raw material such that can be procured and stored at an economic quantity that guarantees a fair price and sound quality
4 To take note, if any of the role of machine utilization in the management of raw material in order to reduce scrap rate
1.3 SIGNIFICANCE OF THE STUDY
All participants of the manufacturing sector are being badly affected by the batter nature of our economy even the consumers are not spared, the significance of this study lies in the fact that it will attempts to provide solutions to same of these, this will reveal alternative mean of sourcing for raw material thereby solving the problems of complete dependence on foreign sources.
Economically, producers can plan adequately to guide against higher than maximum stock level as well as to lower than minimum stock level.
These two situations have some negative implication on the business working capital and corporate image respectively
This study will bring to light the place of material management as an indispensable function; this will help to eliminate shortage of materials which cause poor market Performance in case where the organization cannot meet market
This will enable production specialist to become more conscious about the economic order quantity (EOQ) i.e. the quantity at which cost can be produced in the barest minimum ,this will encourage organization to handle stock control with great caution
1.4 STATEMENT OF HYPOTHESIS
The following postulation will be made in the course of this study ,these assumptions are validated with data gather from field work and will be analyzed in chapter four therefore the working hypothesis employed in the course of this study are
1 Null Hypothesis (Ho)
2 Alternative Hypothesis (Hi)
Null Hypothesis (Ho)
1. For organization to ensure availability of needed raw material ,they need to combine local and oversea resources
2. Even though orders arrive early ,there will be no need to keep safely stock or make provision for short falls in inventory
ALTERNATIVE HYPOTHESIS (Hi)
1 For organizations to ensure the availability of the needed raw material, they needed to combine local and oversea resources.
2 Even though orders arrive early, there will be no need to keep safely stock or make provision for short falls in inventory
1.5 SCOPE AND LIMITATION OF THE STUDY
This project covers relevant elements and aspects of materials management to production and is its relationship with the current situation of our economy .it covers areas like sources, availability and utilization of materials.
The case study is limited to Okin Biscuit Nigeria limited for the collection of data, only the staff from departments related to the topic will be included such as the production, the store, purchasing, quantity control and accounts departments.
In the course of the study, the following constraints were encountered such as getting information from primary and secondary sources as well as in document item, finance that is needed to carry out a research of this type such that as a student may not be able to get all materials needed as cost of transportation, typing and photocopying of relevant materials is high.
Also, all information needed may not be gotten as same members of staff may be reluctant to give out information, thus this will limit the research from handling the topic in a satisfactory manner.
Lastly, since most of the staff to be contacted are senior worker, it will be difficult to get them on seat and even when they are on seat, they may be too busy to give one the needed attention.
1.6 HISTORICAL BACKGROUND OF OKIN BISCUIT OFFA NIGERIA LTD
Okin Biscuit limited was incorporated in 1978 by the patriotic business and indigene of Offa, Chief E.A Adesoye, who did so in responses to the call of the state governor to establish industries in kwara state.
The company though incorporated in 1978, did not star it production activities until December 1979 after the land clearing construction and installation of plants and machinery was put in place.
The company started its production with three varieties namely, cabin germ and costal biscuit and has added other varieties such as short cakes and olomokulubu.
The raw material uses in the production of biscuit include wheat, flour, sugar, margarine, and salt, baking chemical, flavour and water.
Since major portion of the raw material and packaging were from abroad ,import license effected the production target since 1982 continued from ,any years .this adverse foreign exchange during the following years forced some factorizes to close down but okin biscult serviced, although the capacity utilization reduced to 25% In 1987, when the federal government banned the importation of wheat flour, okin biscuit which operated in line with government rules and regulation prompted to source its raw material locally and this was partially successful.
In view of this development, okin biscuit decided to experiment wheat farming kwara state. This was done in oyun, ifelodun and Babanla local government areas and this has gone a long way in solving the problem of what flour. However, the ban and importation of water flour was lifted in December 1992.
The staff strength of Okin Biscuit is within the average of 500-550 employees employed directly and trained internally by the industrial training fund (ITF) to develop their skills and talent.
In 1989 ,okin biscuit limited acquired the major share of 70% in kwarastate breweries with a view to revitalize the company which was then poor condition the company is still looking forward to a rosy future of survival in spite of the battered economy condition .
1.8 DEFINITION OF TERMS
This section aims at defining same registers that the researcher has used in the course of writing this project that may not be easily understood by persons who are not in this field.
⦁ ECONOMIC ORDER QUANTITY: The economic order quantity refers to the level of stock that will result in the total of ordering and carrying cost.
⦁ ECONOMIC: This is a system of production and distribution of need in order to satisfy the material needs of people in the environment.
⦁ LOAD-TIME: This is the time between orders placed and when they are eventually received.
⦁ MANAGEMENT: Management is the process undertaken by one or more individuals to coordinate the activities of people working together in a group in order to achieve organizational goals, aims and objectives.
⦁ RAW MATERIALS: There are substances in their natural state, partly manufactured by already manufactured products from which other goods can be gotten for either domestics or industrial consumption.
⦁ SCRAP: This term applies to material or equipment which is no longer serviceable or which is discarded another form of scrap refers to by product such as fly from cotton s pinning wrap ends from wearing and meter scrap from boring plaiting machine .
⦁ RE-ORDER LEVEL: This is the of materials at which the firm place order for more material to prevent stock out..