TABLE OF CONTENTS
CHAPTER
ONE
1.0
INTRODUCTION
1.1 STATEMENT OF PROBLEM
1.2 RATIONALE (AIM) FOR THE STUDY
1.3 SCOPE OF THE STUDY
1.4 LIMITATIONS AND CONSTRAINTS
1.5 OBJECTIVES of STUDY
1.6 BRIEF HISTORY OF THE ORGANISATION
1.7
DEFINITIONS OF TERMS
CHAPTER
TWO
2.0 LITERATURE REVIEW
2.1 FUNCTIONS
INVOLVED IN MATERIAL MANAGEMENT
2.2 SCOPE OF MATERIALS MANAGEMENT
2.3 CHOOSING
A MATERIALS, MANAGEMENT ORGANIZATION CHART
2.4 BENEFIT
DERIVED FROM MATERIALS MANAGEMENT
2.5 PROBLEMS OF MATERIALS MANAGEMENT
CHAPTER
THREE
3.0 RESEARCH METHODOLOGY AND PROCEDURE USED
3.1 RESEARCH METHOD USED
3.2 INSTRUMENTS USED IN COLLECTING DATA
3.3 RESEARCH POPULATIONS AND SAMPLE SIZE
3.4 STATISTICAL METHOD USE IN DATA ANALYSIS
3.5 HYPOTHESIS FORMULATION
CHAPTER
FOUR
4.0 DATA ANALYSIS AND DATA INTERPRETATION
CHAPTER
FIVE
5.0 SUMMARY
OF FINDINGS. CONCLUSIONS AND RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS
5.2 CONCLUSION
5.3 RECOMMENDATIONS
REFERENCES
CHAPTER
ONE
1.0
INTRODUCTION
The issue of materials management and
its operational effects in the manufacturing organization is among the last of
the specialized business function to centralize and given responsibility and
authority of making major contributions to profits. Since the basic goal of any
manufacturing company’s activities is the development and manufacturing o
products that can be marketed at a profit, this is accomplished by the appropriate
blending of what management authorities called the five m’s: machines, men,
materials, money and management which are interrelated factors that must be
combined properly to achieve economic production, satisfactory and adequate
services. Also the effective management of materials engenders the production
and modification of materials into useful forms through the utilization of
various manufacturing process.
In most business operation today, the
cost of materials is the remaining cost that is truly variable, all other major
cost are either fixed or semi fixed and to this effect, the cost of materials
in a typical manufacturing organization constituted about sixty - five percent
of the total operational cost. The opportunity for profit improvement in the
materials area is virtually impossible to match in any other area of business
operation. Also, in a manufacturing organization, materials is the life wire
and no company can operate without them, only the most progressive
manufacturing firm realize that material availability, engineering or
purchasing specifications fabrication cost and distribution cost are all
factors which impinge on total material cost and all these factors must be
coordinated and controlled by a system oriented called material management.
Materials management can therefore be
defined as a science based
Art, which deals with the planning,
organizing, controlling and directing of supply and processing activities of
materials in an organization. It follows that the management of materials in an
organization is all embracing than any other arms of management because of the
diverse activities involved and the complexity of the problems it process in
synchronizing the activities to make them a successful whole
From the above view, it can be seen
clearly that material management is an organization leadership task and onus of
the leader’s task is effective and efficient coordination and development of
available human and materials resources so as to achieve the objectives of the organization.
So, whosoever is conferred with the responsibilities of ensuring successful
performance of the above activities is regarded as materials manager.
1.1 STATEMENT OF PROBLEM
Until very recently, the materials
management profession had hitherto been treated with wave of the hand. This is
why most of the very useful models and techniques developed by the supply
experts have not received popular recognition by most companies in the
industrial set-up.
Investigations revealed that the
company that forms the subject matter had found it difficult to see to
materials management as an entity capable of making meaningful contribution to
its profit planning and in material control programmes. For this reason, the
procurement function has been swept under the carpet by the management of 0kin
Biscuit.
The trade of this non-recognition can
still be felt in the organization of the company concerns its application of
material management. A lot still need to be done to put the company on a sound
footing in the areas of materials management.
The problem is not peculiar to 0kin
Biscuit Industry alone, it is a problem to be seriously addressed by the majority
of manufacturing companies of today: otherwise, the vast colossal sum of money
being lost to un-orthodox purchasing practices will continue unchecked.
1.2 RATIONALE (AIM) FOR THE STUDY
This research work has been undertaken
as a fulfillment of one of the conditions necessary for the award of National
Diploma (ND) in Business Studies in the Department of Purchasing and Supply,
Institute of Finance and Management Studies, Kwara State Polytechnic, Ilorin.
The researcher has gained a lot of
practical knowledge from the research. This research has got the researcher
exposed to the happenings in the industry sector of the Nigeria economy and
this has installed some
Confidence and skills in the
researcher. Through this research work, the researcher’s professionals mind had
been positively influenced, also the researcher’s sense of awareness as far as
store management and inventory control are concern has been highly fostered.
The subject matter, 0kin Biscuit
Industry will definitely find this research work very valuable especially in
the areas of their store and purchasing activities. For instance, the problem
of improper record keeping, stock outs, over and or under stocking,
obsolescence or damage to inventories in the store, etc. With this research,
the company shall find a lot of useful elements that will aid smooth inventory
management. The supply department has through this research seen the need to affect
highly sophisticated stock control and stock taking. All the fact uncovered in
the course of carrying out the research shall help the company to improve on
its store management.
The society as a whole will also find
this research absolutely useful, professional purchasing personnel materials
management students and other members of the public having interest in
materials management can refers to the research both as an id to professional
practices, examination purpose and in case of future researches.
1.3 SCOPE OF THE STUDY
This research work is based on material
management of Okin biscuit industries.
The scope of this research work centers
its attention on the core areas of application of materials management concept
in manufacturing organization such as purchasing, storage, issuing etc.
It covers the review of literatures and
textbooks and the research will give various definition of terminology used in
the course of the project work. It also include the activities been carried out
by the materials management and their importance to the organization. The
project work will also review the survival fact of the research work on the
organization and offers appropriate advice its contributions to every business
as a whole.
1.4 LIMITATIONS AND CONSTRAINTS
The successful conduct of this research
work has not by any means been an easy task. The researcher was faced with a
lot of problems, which almost threatened the success of the research.
Firstly,
in view of limited time for the submission of the research work, the researcher
has limited the report to application of material management.
Also, lack of enough and adequate
financial resources has made it quite impossible for the researcher to visit
other similar companies scattered all over the country. Another problem faced
by the researcher was the uncompromising attitude of the management of the firm
to release for use some of the essential facts that would have been of good
materials for this research study.
Finally, there was the problem of
inadequate and up to date statistical in almost all department of the company
that forms the subject.
1.5 OBJECTIVES of STUDY
The research work has been carried out
to achieve very many noble objectives. One of the objectives is to pin-point
areas where the majority of Nigerian manufacturing concerns are making a very big
mistake by allowing their store operations to be handled by quack store
personnel.
Another objective of the study is to
find out from where the company at forms the subject matter get their supply of
inventories.
Finally, the research study has the aim
of making all profit-oriented organizations to realize how much is being lost
daily as a result of non-recognition of the materials management function. In
effect, the research work as an eye opener for all profit - conscious
organizations to see materials
1.6 BRIEF HISTORY OF THE ORGANISATION
0kin Biscuit Industry Off a, was
established in May 1978 by a patriotic businessmen, Chief Emmanuel 0. Adesoye,
who is an indigene of Offa, in Offa Local Government Area then in response to
the call to the Kwara State government calling on well meaning Kwarans to
establish industries in the state
The company was incorporated in December
1979, under the Control of the Nigerian Customs and Excise Edict of 1969. “The
manufacturer of biscuit”. The producing and sales started on 2nd
June 1980. The company started with production of three varieties of biscuits
namely Cabin Gem and Coaster in 1980, and other varieties like Short Cake,
“Olomokulubu: were introduced.
The demand for 0km Biscuit industry out
stripped supply machinery for the 2nd line of production plant was
installed in 1982 to double the capacity of production. Production capacity was
reduced in the following year, is as a result of import license, since major
portion of raw materials were imported.
The adverse situation of foreign
exchange during the following year forced many factors to close down for long
period, but 0kin Biscuit Limited still survived through the capacity
utilization had to reduce to a level of 25% to 30%. 0km Biscuit still has other
branches of items like Okin Foams Limited, Okin Express and 0km Malt, which is
presently under market testing and had staff strength of about 670 in which 70%
are skilled workers.
However, the factory has four main section
production engineering, administrative and accounts. The head of each section
is directly responsible to the General Manager. Implant training course were
conducted in cooperation with industrial training fund (ITF) to develop skill and talents of employees.
Employees are normally sent for
training courses conducted by other management training organizations as well.
Today, there are only two expatriate in the factory as compared to six
expatriates in seven years ago. The company also offers training opportunity
for the students from the higher institution of learning with the facilities
provided at the various departments.
Today, 0km Biscuit produced the Coaster
and Short Cakes and has became mostly consumed biscuit in Nigeria and were also
exported out to the neighboring African countries.
1.7
DEFINITIONS OF TERMS
Peculiar to all field of
specialization, be it management studies or science based course, every field
of specialization has got its own terms, often been used for communication. The
following are the definition of terms in materials management as used in this
project.
i.
Materials Management: Can be defined as a science art which
deals with the planning, organizing, controlling and directing of supply and
processing activities of materials in an organization. In a nutshell, material
management can equally be regarded as the integration of purchasing and stores
activities under the control of the Manager.
ii. Specification: A specification of an item is the
description of the item, its dimension analysis, performance or other relevant
characteristics in sufficient detail to ensure that it will be suitable in all
respect for the purpose for which it is intended.
iii.Standardization: is the process of reducing the number
of varieties of stocks to a controlled minimum.
iv. Procurement: this is defined as a whole process
whereby all classes of resources (people, materials, facilities and services
required are obtained).
v.
Negotiation: it simply means conferring discussing
or bargaining to reach agreement in business transaction.
vi. Value
Analysis: It is an organized
procedure for the efficient identification of unnecessary cost in the materials
used for the production of a product through analysis of the function expected
of that product, with due cognizance of availability and storability.
vii.
Obsolescent: an item is said to be obsolescent
when it is going out of use but is not yet completely unusable.
viii.
Obsolete: An item is regarded as obsolete when
it is no longer in use or usable by the business concerned, because of changes
in operational practice of production methods.
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