TABLES OF
CONTENTS
CHAPTER ONE:
INTRODUCTION
1. 1 Background to the Study
1.2 Statement of the Problem
1.3 Objective of the Study
1.4 Research Questions
1.5 Significance of the Study
1.6 Scope and Limitations of the Study
1.7 Scope and Limitations of the Study
1.8 operational Definition of Terms
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
2.1 Historical Background of Nestle Nigeria P1c
2.2 Conceptual Framework
2.2.1 The Concept of Materials Management.
2.2.2 The Concept of Profitability.
2.3 The
Relationship between Materials Management and Profitability
2.4 Materials Requirements Planning and
Capacity Requirements
2.4.1 Capacity Planning
2.4.2 Capacity and Inventory of Materials
2.4.3 Throughput Time of Purchase of Raw Materials
2.4.4 Integrated Materials System
2.5 Theoretical Framework
2.6 The Planning
Decisions and Approach in Materials Management.
2.7 Production Utilities in Materials
Management.
2.8 Customer Satisfaction as It relates to
materials Management.
2.9 Material Availability in Materials
Management.
2.10 The Purchasing Approach of Materials
2.11 Purchasing and Inventory Policy in Materials Management.
2.12 Time of Purchasing in Materials Management.
2.13 Source of Purchases of Materials
2.14 Summary of Literature Review
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction
3.1 Research Design
3.2 Population of Study
3.3 Sample and Sampling Procedure
3.4 Data Collection Instruments
3.5 Data Analysis
CHAPTER FOUR:
DATA ANALYSIS AND INTERPRETATIONS
4.0 Introduction
4.1 Respondents' characteristics and
classification
4.2 Presentation and analysis
of data according to research question.
4.3 Presentation and analysis
of data according to test of hypotheses
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.0 Introduction
5.1 Summary of Findings
5.2 Conclusion
5.3 Recommendations
REFERENCES
APPENDIX 1: QUESTIONNAIRE
CHAPTER ONE
INTRODUCTION
1.1 Background to
the Study
Over the last
decade, our world has changed dramatically due to the growing phenomenon of
globalization and revolution in information technology. There is tremendous
demand on companies to lower costs, enlarge product assortment, improve product
quality, and provide reliable delivery dates through effective and efficient
coordination of production and distribution activities. To achieve these
conflicting goals, companies must constantly re-engineer or change their
business practices and employ information systems (Mahesh, 2006). Materials
Management has always been an area of scrutiny for organizations. This has
become a central focal point as trends from the supply chain arena have
indicated that substantial operating cash can be freed with leaner and more efficient
handling of inventory.
As organizations
examine the state of their inventory, they often find that visibility across
locations and warehouses are inadequate, stock levels are inconsistent, demand
is uncertain, and communication between stocking locations or warehouses may be
minimal or nonexistent. Among other things, the lack of an
integrated interaction between' peripheral systems and materials managers leads
to unnecessary purchasing and overstocking.
The concepts of
"materials management", "physical distribution management,"
and "logistics management" are the primary materials organizational
tools which have been used successfully in the past and will be used
increasingly in the future to achieve closer coordination and control of a firm
various materials activities.
In general
materials management is concerned with bringing materials from outside of an
organization to the point of production and moving in processes.
If we distinguish
between the operational function of customer service and the resultant goal of
customer value and satisfaction, this discussion leads us to conclude the
consequences of materials management are lower costs and improved customer
value and satisfaction to achieve competitive advantage. Industry reports
support this contention (Performance Management Group, 2001).
The fast
developing and technologically changing environment has placed before the
materials manager a tremendously challenging task and responsibility. The task
is really herculean when .we recognize the importance of materials, equipment’s
and components per annum that go into the production channels. The challenges
become tough because the money tied up in inventory or materials and equipment
are enormous. In fact, in many organizations (big and small), materials form
the largest single expenditure item. According to Subramanian (1974) an
analysis of the financial statements of a large number of private and public
sector organizations indicates that materials account for nearly 60% of the
total expenditure. Consequently, the importance of materials management lies in
the fact that any significant contribution made by the materials manager in
reducing materials cost will go a long way in improving the profitability and
rate of return on investment. Such increase in profitability, no doubt, can be affected
by increasing sales.
While most of the
writing and discussion on materials management is on acquisition and standards,
much of the day to day work conducted in materials management deals with
quality assurance issues. Parts and materials are tested, both before purchase
orders are placed and during use, to ensure there are no short or long term
issues that would disrupt the supply chain. This aspect of material management
is most important to the heavily automated industries, since failure rates due
to faulty parts can slow or even stop production lines, throwing off timetables
for production goals (Mentzer, 2001).
The other \ major
component of materials management is standards compliance. There are standards
that are followed in supply chain management that are critical to a supply
chain's function. For example, a supply chain that uses just-in-time or lean
replenishment requires absolute perfection in the shipping of parts and
materials from purchasing agent to warehouse to place of destination. Systems
reliant on vendor-managed inventories must have up-to-date computerized
inventories and robust ordering systems for outlying vendors to place orders on
(Hax and Candea, 2004).
Effective
materials management according to Christine (2002) is essential in order to
provide the best service to customers, produce at maximum efficiency, and
manage inventories at predetermined levels to stabilize investments m
inventories. Successful materials management requires the development of a
highly integrated and coordinated system involving sales forecasting,
purchasing, receiving, storage, production, shipping, and actual sales. Both
the theory of costing materials and inventories and the practical mechanics of
cost calculations and record keeping must be considered.
Costing materials
present some important, often complex, and sometime highly controversial
questions concerning the costing of materials used in production and the cost
of inventory remaining to be consumed in a future period. In financial
accounting, the subject is usually presented as a problem of inventory
valuation; in cost accounting, the primary problem is the determination of the
cost of various materials consumed in production and a proper charge to cost of
goods sold (Freeman, 2006).
1.2
Statement
of the Problem
Many
organizations seem to be failing in the realization of the corporate goals and
objectives. However, for most of these organizations (particularly
manufacturing organizations), materials are crucial aspect of the firm's
prosperity and goal attainment (Burt, 2003). 'The challenge is that some firms
do not have genuine and efficient management of the purchase, storage and usage
of the materials. The importance of materials management is evident in the
amount of expenditure allotted to materials and the significant contribution of
materials to organizational performance. Efficient materials management will reduce
materials cost, improves profitability and increase rate of return on
investment. Such increase in profitability, no doubt, can be influenced by
increasing sales. In fact, as market pressure intensifies, organizations will
be forced to cut down the costs. Material Management is all about purchasing
mix. It involves the procurement of materials in store and the ability to know
the total number of available goods that are to be issued out on request. All
the functions are primarily carried out by the store manager whose mission is
to ensure that goods are not below average as to satisfy the demands of
customers. The general importance of materials management is to ensure that the
demand and sales of the company are streamlined as to enable it to be aware
when the management or the organization is short of goods and will not go to
the extent of making use of their buffer stock. (Maloni, 1997).
1.3 Objective of the
Study
This study will
show with statistical evidences that materials management will significantly
increase the profitability, wellbeing and productivity of the organization.
However, the specific objectives of the study are:
1.
To examine the impact of materials management on the
productivity of the organization.
2.
To examine the impact of materials management on
profitability.
3.
To examine the effect of materials management on the organizational
efficiency and performance.
4.
To
examine the impact of materials management on
customers' satisfaction.
5.
To examine the effect of materials management on the
organizational coordination.
1.4 Research
Questions
In this study,
attempt will be made to provide answers to the following questions
1.
What is the impact of materials management on the
productivity of the organization?
2.
What is the impact of materials management on
profitability?
3.
What is the effect of materials management on the
organizational efficiency and performance?
4.
What is the impact of materials management on customers'
satisfaction?
5.
What is the effect of materials management on the
organizational coordination?
1.5 Significance of the Study
The research work
was taken up to show the significance of materials management to aggregate
performances of the organization. Apparently, all organizations, whether service
oriented or good oriented need to pay attention to the essence of materials and
materials management in their organizations. Consequently, it is clear that the
contribution and importance of this study cannot be over emphasized.
The results of
this study should also assist in defining new methods / strategies of materials
management for manufacturing sector in particular and management organizations
in general.
Finally, the
results of this study should help scholars, students and upcoming researchers
in the conduct of future research.
1.6 Research Hypotheses
This study will
be geared towards testing the following hypotheses.
Hypothesis One
HO: There is no significant relationship between materials
management and organizational productivity.
H1: There is significant relationship between materials
management and organizational productivity.
Hypothesis Two
Ho: There is no significant
relationship between materials management and profitability.
H1: There is significant relationship between materials
management and profitability.
Hypothesis Three
Ho: There is no
significant relationship between materials management and organizational
efficiency and performance.
H1: There is significant relationship between materials
management and organization~ efficiency and. performance.
Hypothesis Four
Ho: There is no significant
relationship between materials management and customer's satisfaction.
H1: There is significant relationship between materials
management and customer's satisfaction.
Hypothesis
Five
Ho: There is no
significant relationship between materials management and organizational
coordination?
H1: There is
significant relationship between materials management and organizational
coordination?
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