ABSTRACT
Past studies have shown that the poor
performance of many firms in Nigeria
is due to their inability to manage the relationship between suppliers of input
and the operation of the firm. This study is therefore designed to examine how
manufacturing firms manage their materials. Secondary data were collected on
the inventory of material in Nigerian bottling company Benin City plant. Table and simple percentage
was used to analyze data collected. Findings indicate that the method used by Nigerian
Bottling Company to maximize their inventory of both materials and finished
product is not efficient because the naira saved in the course of purchase have
more effect on the profit of company in production/selling. This is why
purchasing should be cost effective. Recommendations include an adoption and
application of the EOQ model in order to save cost and make their operation
more efficient. This will make Nigerian Bottling Company product more
comprehensive and perhaps enable them gain competitive advantage. The
conclusion suggest that EOQ model reveals the cost saving and total inventory
of materials use in production and effective management and control leads to
efficient operation cost.
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND TO 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 areas 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. The material management involves purchasing
supplier 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 its entire staff have to consider their decision in relation
to how they will after it the material side of the business topics under
material management include purchasing, control, transportation, material
production, planning stores, inventory control Bret (2001).
Therefore, the main point
of materials management is to satisfy the need to all operating system such as
manufacturing production line, promotional activities and physical distributor
times. It is the operation as the customer, manager must work around the system
till everything his and needs are satisfied. The material manager organization
and it entire staff should however consider their decision in relation to how
they will affect the materials side of the business. It is in view of the above
stated facts that this study is being carried out using Nigerian Bottling
Company PLC Benin City plant a manufacturing company to study the issue of
material management.
1.2 STATEMENT OF
RESEARCH PROBLEM
The major challenge that
material manager face is maintain a constituent flow of materials for
production. There are factors that inhabit the accuracy of inventory which
results in production shortages premium freight and often adjustments.
According to the journal
of Business logistics (2009) vol1 22 part 2. The major issues that all material
managers face are incorrect bills of materials, in accurate cycle counts,
unreported scrap shipping error, receiving errors and production reporting
errors material managers have strived to determine how to manage these issues
in the business sectors of manufacturing since the beginning of the industrial
revolution. Although there are no known methods that eliminate the afore
mentioned inventory accuracy, inhibitor there are best method available to
eliminate the impact up on maintaining an interrupted flow of materials for
production. Reluctance can be reduced and effectiveness when service point are
clustered to reduce the amount of reluctance. An effective material management
program can also revolve island approaches to shipping, receiving and vehicle
movement solutions can include creating a new central loading location as well
consolidating service areas and docks from separate building into one.
Developing better circulation infrastructure also means reevaluating thick
delivery and service vehicle routes. Base on above statement that this research
seek to examine the issue of material management and the effect it has on an
organization using a manufacturing company as the case study.
1.3 OBJECTIVES OF
THE STUDY
v To examine the level of efficiency and
product improvement in material management.
v To investigate whether
the material management practice permit high stock turnover validation.
v To proffer useful
suggestions and ideas on how to effectively manage materials in an organization
(Sander 2002).
These objectives are
intended to be addressed in this study.
1.4
RESEARCH QUESTIONS
v To what extent does material management
contribute to an organization performance?
v Does specification on
materials have any impact on the effective material management?
v To what extent does
effective material handing help in the enhancement of un interrupted
production?
1.5 SCOPE OF THE STUDY
This research study centered
on materials management in a manufacturing company. It covered such areas as
storage, transportation procurement, materials handling planning control &
value engineering etc. the research is also intended to cover a specified
period of time range from 2009-2011 also information are going to be drawn
within the domain of Nigerian Bottling company Plc. Benin City.
1.6 SIGNIFICANCE OF THE STUDY
The study will be of importance due to
that fact that it will help to reveal the level of efficiency and product
improvement in material management.
Again, the study will be significant
because it will help to proffer useful suggestions and ideas on how to
effectively manage materials in an organization.
1.7 LIMITATION OF THE STUDY
During the conduct of
this research work, some factors posed as constraints to the determined efforts
of the research to carryout the research study to such a depth and in such a
manner that it ought to have been carried out judging from its relevance to
management, such factors include:
a. Management Restriction:
management more often than now allow access to information that are considered
very confidential in nature like detail information of organization of the
organizational corporate profile. As a result of the restrictions the author
was able to work with only the information that she has access to.
b. Time Constraint: Time is
also another factor tat acts as hindrances in carrying out this research study.
This is as a result of the fact that other things were still being attended to
in the course of carrying out this research work.
c.
Financial Constraint: money also acts as a problem in the conduct
of the research work. Traveling expenses were incurred in getting the materials
for the research work. Also incurred, were expenses for the typing and
distribution, building and a lot of other expenses.
1.8 DEFINITION OF TERMS
Material management: Material management is a scientific technique, concerned with Planning, Organizing
&Control of flow of materials, from their
initial purchase to destination.
Production: Production is a process of combining various material inputs and
immaterial inputs (plans, know-how) in order to make something for consumption
(the output).
Productivity: Productivity is the output unit/per labour input
into the production process given the level of existing technology
Manufacturing: this is the
production of merchandise for use or sale using labour and machines, tools,
chemical and biological processing, or formulation.
Industry: This is the group of firm that engage in the production of
similar product (i.e. goods / services)
Management: This is the process of planning, organizing,
staffing, leading, directing, coordinating and controlling available resources
toward s achieving a target objective.
1.9 HISTORICAL PROFILE OF THE COMPANY UNDER STUDY
The Nigerian Bottling Company Ltd is one of the
biggest companies in the non-alcoholic beverage industry in the country and is
the sole franchise bottler of The Coca-Cola Company in Nigeria.
The company serves approximately 160 million
people by producing and distributing a unique portfolio of quality brands,
bringing passion to marketplace implementation, and demonstrating leadership in
corporate social responsibility.
NBC Ltd started operations in Nigeria in 1951.
Based in the city of Lagos, they operate 13 bottling plants across the country.
In addition, they channel products through 59 warehouses and distribution
centers.
The company employs about 4,800 people and
indirectly supports the jobs of up to more than a million more in our value
chain.
The company aims to be our customers’ most
preferred supplier, and conduct programmes to support more than 450,000
customers who sell our products to consumers.
The company is part of the Coca-Cola Hellenic
Group, one of the largest bottlers of the Coca-Cola Company’s products in the
world, and the biggest in Europe. Coca-Cola Hellenic operations span 28
countries, serving more than 570 million people. The company is headquartered
in Athens and listed on the Athens, New York, and London stock exchanges.
