BACKGROUND TO THE STUDY
Material Management is an integrated management approach to the planning, purchasing, warehousing, stock keeping allocation and movement of needed material from point of source to user department. It can also be defined as the process of management of materials which involves purchasing, storage, inspection, control and transportation.
Material management is a relatively new discipline. The 20th century’s rapid growth and the significant industrial development has played a major role in the relationship and effective management of the traditional 5Ms which are: Machine, material, men, money and management.
The famous industrial revolution made material(s) the largest elements costs in any organization. At the wake of the 20th century many firms had recognized the importance of material, and several material activities like purchasing, warehousing, stock control and distribution carried out by the organization.
By the 1950 firms have identified the need for effective coordination or integration of such material activities and material organization tools concept, like those of physical distribution movement, logistic movement and material management as a means to check, coordinate and control the firm’s material activities.
Globally, there is no clear definitions on the area of material management. According to M.A. Tokunbo (1987) defines it in the context of store and material control as compensation or the effective coordination of the principle element.
ü Identifying, classifying and coordination of stocks
ü Provision, inventory control and stress accounting
ü Store house layout and organization
ü In house storage handling and distribution
ü Presentation of materials in store
To these, material management has the duty to apply the most suitable technique in the most effective way to ensure the minimum total cost consistent with providing the service required. The American production and inventory control society (APICS) defines material management technique and production as the grouping of management function related to the complete cycle of material flow from the purchase and internal control of work in the latter term, traditionally is limited to internal control of production materials.
In examining the whole definition, one could easily notice that they are not quite different from one another, only the way of approach and little difference in terminology. In this respect (material and resource) or material management is not only limited to buying and storing as many view it but involves also purchasing, transport and distribution planning and continuous monitoring.
The subject matter of this study is the effect of material management technique on production planning process in coca-cola Nigeria Bottling Company, Kaduna. The research is meant to be of great importance to various enterprise and organization wishing to conduct a detailed study into stores and purchasing material.
Due to sophistication in technology coupled with socio-economic and political instability, production processes face complex problems that needs to be addressed by the management ensuring that materials are allocated and used in the most efficient and effective manner.
The material management technique on production is also to identify problems by guiding against sub-optimization of the material management techniques in production planning processes, for this the researcher suggests that, which will achieve optimal result quickly, cheaper and acceptable.
1.2 STATEMENT OF THE PROBLEMS
Coca-cola Bottling Company Plc as an organization is faced with problems in relation to utilization of the effect of material management being the utmost thing that are needed to be utilized effectively. The problem facing material management especially in coca-cola bottling company plc are mainly under-stocking or overstocking of material, stock obsolesce, breakage and the economic order quantity.
Due to the fact that the impact is to be felt positively in the society by making themselves productive in every area of inputs.
But despite the effect observed there have been generated apathy, ignorance and lack of interest by many people and the government.
1.3 OBJECTIVES OF THE STUDY
Specifically, the aims and objectives of this study are:
i) To assess the impact of material management on organizational performance.
ii) To appraise and further appreciate the significance of material management in a manufacturing industry.
iii) To identify and ascertains some of the problems faced by materials management in Nigerian Bottling Company (Coca cola), Kaduna.
1.4 STATEMENT OF HYPOTHESIS
The following hypothesis was formulated for this study:
H0: Material management does not have any significance impact on organizational performance.
H1: Material management do have significant impact on organizational performance.
1.5 SIGNIFICANCE OF THE STUDY
A research of this nature will be incomplete without highlighting the importance of the study. Firstly, the researcher as a student aspiring to be a material executive in the future sees this study as an opportunity to fully investigate into the field of materials management to see the challenges therein.
Secondly, the study is needed as a pre-requisite for the Award of Higher National Diploma in Production and Operations Management (POM).
Furthermore, the researcher has also undertaken the study in order to gather necessary information and suggest solutions to the problem facing materials management in Nigeria Bottling Company (Coa-cola) Kaduna.
Furthermore, the research work shall benefit other student researchers, lecturers of higher institution of learning, material managers in various organization, managers of government materials and the general public could find this work beneficially in one way or the other.
1.6 SCOPE OF THE STUDY
The scope of these research work is narrowed on the effect of material management techniques on production planning process in Nigeria Bottling Company. However, this will not in any way discredit the reputation of the results or finding of the research work.
1.7 LIMITATION OF THE STUDY
In carrying out this research, certain problems were encountered which include:
- The researcher faced problem of sourcing for materials for the project.
- Time constraint was a factor the researcher encountered. This resulted in the backlog of the researcher’s class work.
- Lack of textbooks related to the subject matter also contributed to the backlog in writing the project.
- Uncooperative and bureaucratic attitude of Nigerian Bottling Company officials who were reluctant in providing necessary information in writing.
Despite all of these constraints, the researcher was lucky to gather vital information that made the investigation a success.
1.8 HISTORICAL BACKGROUND OF NIGERIA BOTTLING COMPANY, KADUNA
Coca-Cola first came to Nigeria in 1953 when Nigerian Bottling Company set up its first plant in Lagos. It marked the beginning of existing store of growth and development particularly the past years.
Nigeria Bottling Company Plc is today Nigeria’s number one bottler of soft drink as claimed by the company and from the research finding, selling more than eight million bottles per day, a figure that is still growing with the expansion of the existing, twelve (12) plants and the opening of new brand plants in various part of the federation. The company established three departments under Kaduna plant viz: (1) Minna, (b) Zaria, (c) Abuja. Coca-cola is the number one best seller in the coca-cola segment, Fanta is the orange segment and sprite most widely sold lemon drink in Nigeria.
Nigeria Bottling Company is a subsidiary of Leventis which serve as its parent company. The company has two section namely: soft drink and agricultural section. The company now operates on a large scale agricultural programme with two farms situated at Zaria in Kaduna State and Agenobode in Edo State apart from production of soft drinks.
The following are Nigeria Bottling Plc product like Coke, Fanta, Sprite, Ginger A/c, Fanta tonic, Fanta club Soda and Krest, bitter lemon.
Kaduna Plant which is the area of study of the research is situated at Inuwa Abdulkadir Road behind Kaduna Transport Authority (KSTA) and a stone throw from Peugeot Automobile Nigeria Limited (PAN). The company is headed by a manager with department head taking control and the general supervisor of the company.
Objective of the Company
- To produce soft drinks to the consuming population
- To make profit
- To re-profit with the purpose of expansion
- To provide employment opportunities
- To carry out the distribution activities of its production by supplying direct to customer.
- To penetrate and dominate the Nigeria soft drink market
- To assist in the economic development of the nation.
In order to achieve the above objective, the company requires sound and effective organizational structure. The company’s drawn-up structure, Kaduna plant is headed by a plant manager to whom five (5) section head report. The sections that make up the plant are:
The day-to-day administration of the company’s activities is under the leadership and supervision of the plant manager.
1.9 DEFINITION OF TERMS
- Material Management: This is defined as an approach for planning, organizing, and controlling all those activities principally concerned with the flow of materials into an organization.
- Purchasing: Purchasing is defined as the activity directed to securing by legal means, the materials suppliers and equipment requirement in the operation of an enterprise.
- Sourcing: This is referred to the investigation and evaluation of sources of supply and suppliers.
- Negotiation: Is a process of planning, receiving and analyzing conditions by both buyer and seller to arrive at an acceptable agreement through mutual understanding.
- Expediting: It is a process of ensuring that goods are promptly delivered to the right place and at the right time.
- Purchase Requisition: It is a form usually prepared when a department or stores need materials to be purchased.
- Issue: Issue is the withdrawal of goods and handover of stock to user backed with authorized documents.
- Organization: Are artificially contrived structure with procedures and objectives defining the responsibilities, who does what type of job task, who report to whom and when and who is responsible for what action.
- Quality control: Is a process whereby goods and services are examined to ensure that they conform to predetermined standards.
- Obsolescence: These are materials for which there is no demand either because of the presence of a better substitute or they are out of use or fashion.
- Stocktaking: This is the complete process of verifying the quality balance of the entire stock hold in the store.