This project work is
centered on The Impact of material handling cost reduction effort in
public institutions a case study of PHCN
kaduna. It begins with the first chapter that deals with the background of the
study which gives brief introduction about the subject matter under study.
Statement of problem which is the reason why the researcher under take the
study to exploit such problem and come up with recommendation which will be
beneficial to the organisation and entire society. Research question is drawn
up which is in line with the objective of the research work to be open up to
get variables for questionnaires to be administered. Chapter two deals with the
review of previous work carried out by other authors on a similar topic.
Chapter three deals with the research methodology with research design
correlation studies to establish the relationship between material handling and
profitability. The study have a sample size of 50 which is 20% of the
population of 250 drawn from materials management related department and the
sample size selected randomly and questionnaire were administered to them for
their response. The findings of the study show that material handling have
relationship with the profitability of the organisation. Thus it was concluded
that material handling in PHCN is not properly carried out, because
replenishment drive is not according to actual materials requirement. Therefore
recommended that material handling unit should be established and the use of
actual materials requirement should be the principle upon which material
replenishment is carried out to ensure that materials are not hold in excess
and also not.
Title - - - - - - - - - - - i
Approval - - - - - - - - - - ii
Declaration - - - - - - - - - - iii
Dedication - - - - - - - - - - iv
Acknowledgment - - - - - - - - - v
Abstract - - - - - - - - - - vi
1.1 Background of the study - - - - - - 1
1.2 Statement of the problems - - - - - - 2
1.3 Objectives of the study - - - - - - - 4
1.4 Significance of the study- - - - - - - 5
1.5 Delimitation of the study - - - - - - 6
1.6 Research questions- - - - - - - - 7
1.7 Definition of terms - - - - - - 7
2.1 Concept of materials management - - - - - 9
2.2 Material management system in HPCN -- - - - 12
2.3 Reason for holding stock - - - - - - 14
2.4 Cost of holding stock - - - - - - - 18
2.5 Material handling procedure - - - - - - 21
2.6 Purpose for material handling - - - - - 23
2.7 Importance of material handling in an organisation - - 33
2.8 Effect of Material Handling in an organisation - - - 34
2.9 Importance of material handling- - - - - - 38
2.10 Source of information for material handling - - - 40
2.11 Effect of Material handling - - - - - - 42
III: Research Methodology
3.1 Area of study - - - - - - - - 45
3.2 Research design - - - - - - - - 46
3.3 Population and sample - - - - - - - 47
3.4 Sample and sampling procedure - - - - - 48
3.5 Instruments for data collection - - - - - 48
3.6 Administration of the instrument - - - - - 49
3.7 Statistical techniques used in analyzing data - - - 50
Presentation and analysis
4.1 Presentation of result - - - - - - - 52
conclusion and recommendation
5.1 Summary of procedure - - - - -- - -- 65
5.2 Discussion of findings - - - - - - - 66
5.3 Implication of findings - - - - - - - 69
5.4 conclusion - - - - - - - - - 70
5.5 Recommendation - - - - - - - 71
5.6 Suggestion for further studies - - - - - 72
Bibliography - - - - - - - - 74
- - - - - - - - - 76
of the Study
the Second World War after the industrial revolution, industries sprang up in
hundreds every day. As a result of the increase in industries, raw materials
became scarce. This made production to be complex. Accounts needed to be
prepared and customers needed to be attended to within a short period of time.
Alternative sources were required and new product needed improvement and
development. With this problem in mind, the material management concept was
introduced with the view to solving them in a scientific manner to achieve
optimal success and reduce production cost. By the 1950s and 1960s an uneven
transition from the old concept of material management as clerical function to
a newer function or concept of material management emerged which embraced inventory
control, distribution and buying function. By late 1960s material management
was recognized as an important function in an organization. Thus, the
importance of material management lies in the fact that any significant
contribution made by the materials manager in reducing material cost will go
along way in reducing production cost and improving the profitability and the
rate of return on investment. Today, materials are the livelihood of any
industry, no industry can operate without them, they must be made available at
the proper time, in proper quality, at the proper place and at the proper
handling is an integral aspect of material management that is concerned with
the means by which materials move in the
materials are moved from one stage of processing to the other in such a
way that processing, safe movement and use of space is enhanced. Hence, it is
also an integral part of a production process which does not really contribute
to the value of what is being processed, but an integral part of a production
process which does not really contribute greatly to the processing cost. It is
for this reason that this research work tends to take a clerical look at the
significance of material handling and its impact on production cost.
has been stated earlier, the impact of material handling on the production cost
of an organization with particular reference to the PHCN industry, forms the
basis of the research. This is not only because materials cost forms the overall
65% of the cost of running any organization according to some research in
material management, but also because materials must be moved from one
processing stage to another. Thus, there is always the need to effectively
manage materials in order to curtail the amount of waste and also enhance
maximum service in such organizations. This particularly calls for effective
materials handling and maintaining a standard in the cost of production.
problem is the employment of unqualified personnel to handle the store
activities. This problem often results to poor material handling,
deterioration, pilferage, theft and redundancy. Now that store operation is
beginning to receive attention of those in authority, the necessity to actively
coordinate these activities for better performance to create more impact and
subsequently more recognition can not be over emphasized. Effective material
handling and its prime function is a matter of ensuring that sufficient
materials are retained in the store to meet all requirement without carrying
unnecessary large stock or too little to ensure efficiency and profitability in
researcher also gathers that there has been negligence of the store department
and sometime brought under unrelated department which result in poor
performance. This scenario depicts the existence of material handling
deficiencies in the area of planning, replenishment, recording and inventory
control which effect profitability in the organization.
of the Study
rationale for this study is to examine critically the application and to
understand the impact of effective material handling which deals with the
inflow and out flow of materials into
within and right through to the consumer of the products in relationship
to its operational performance and economic.
study is specifically designed to
Investigate the current trend of materials
availability in the organization under study.
Establish the effectiveness in the material
handling system in PHCN.
Evaluate the impact of deficiencies in material
handling system on profitability.
Examine the factors responsible for dismal
performance in material handling.
Suggest strategies for effective coordination
and management of material handling system that can improve and provide
constant and uninterrupted flow of materials which will invariably contribute
to the profitability level of the organization under study.
of the Study
research work is carried out to be of benefit to individual, organizations and
the society in general. Thus the significance of the study are:
project work will be beneficial to subsequent researcher who will want to
undertake a research into similar or related fields of study as it will provide
them with relevant information on the subject matter.
study will also provide the public with first hand information and knowledge on
how stores or materials are managed and control in public establishment with
regard to PHCN.
the research work has been undertaken to broaden the knowledge of the
researcher and the society on how efficient material handling can contribute to
the survival and profit level of an organization with particular reference to PHCN.
Therefore the project will highlight the benefit which PHCN and other
organization stand to gain if they employ and apply the right material handling
system manned by qualified and trained professionals.
of the Study
scope of these study is restricted and confined to the material handling system
in public institutions from 2007-2009 with the population of 250 staff drawn
from production, materials management, power plant and utility units and a
sample size of 50 which represent 20% of the population.
study seek to established the impact of effective method of material handling
on the profitability of PHCN putting into consideration the enormous materials
that serve as input for the organization.
measure the impact of material handling to the profitability of PHCN, the
researcher has drawn up some research questions which are:
What is the rate of materials availability in
the organization under study?
Why is material handling system ineffective in
What are the effects of deficiencies in material
handling system in profitability level in PHCN?
What are the factors responsible for poor
performance in material handling?
What are the remedies for improving efficiency
of material handling system in PHCN?
Stock: All the tangible asset
of a company other than the fixed asset.
Control: Standard set for
checking the result of an activity.
Adding or bringing to profit of an organization.
This is a complete process of writing the quantity balance of the entire range
of items held in stock.
This is any other check on physical quantity which may be applied either
regularly or intermittently.
Holding excess stock over normal equipment.
These are components, spare parts, semi processed goods in an organization.
Store: Is the place where
all raw materials, component parts, are held for safe keeping.
Stock out: It
is not having the required parts or materials on hand when and where they are
Stock level: Is
a predetermined quantity of stock to be held.
When an item is no longer usable by the organization concern because of a
change in operational practice or method of production.