THE EFFECT OF MATERIAL MANAGEMENT TECHNIQUE ON PRODUCTION PLANNING PROCESSES IN SMALL AND MEDIUM SCALE ENTERPRISES

CHAPTER ONE

INTRODUCTION 

Material management is an integrated management approach to the planning, purchasing,
ware housing, 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 material which involves purchasing, storage 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 cost in any
organization.

At
the wake of the 20th century many firms had recognized the importance of
material, and several material activities like purchasing, ware housing, 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, co-ordinate and control the firm’s material
activities.

Globally,
there is no clear definition on the area of material management. According to
M.A. Tokunbo (1987) defines it in the context of store and material control as
compensation for the effective co-ordination 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.

1.1     BACKGROUND
OF THE STUDY

The
subject matter of this study is the effect of material management technique on
production planning process in United Nigeria Textile Plc (UNT Plc), 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 hence,
the research aims at identifying the problems associated with efficient
operation in an organization, the research is interested in knowing the effect
of material management technique on production planning process as practicable
in an organization. Due to sophistication in technology coupled with
socio-economic and political instability, production processes face complex
problems that needs to be addressed by 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 supb-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.

Today
materials are the live-wire of every organization be it public or private hence
no organization can survive without material, its availability, distribution
and transportation and delivery at the right amount and quality is paramount.

1.2     STATEMENT
OF THE PROBLEMS

United Nigeria Textile
Plc (UNT Plc), Kaduna. 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 United
Nigeria Textile Plc (UNT Plc), Kaduna. are mainly under stocking or
over stoking of material, stock obsolescence 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 general 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 ascertain some of the problems
poised by materials management in Nigerian United Nigeria Textile Plc (UNT Plc), Kaduna.

iv.            
It is also the researcher’s desire that this
compilation will be of great help and interest to whosoever uses it to gain
knowledge on issues discussed.

1.4     STATEMENT
OF HYPOTHESIS

          The following hypothesis was
formulated for this study:

H0:      Material
management does not have any significant impact on organizational performance
of SMEs.

H1:    Material
Management does have significant impact on organizational performance of SMEs.

1.5     SIGNIFICANCE
OF THE STUDY

   A research of this nature will be incomplete
without highlighting the importance of this 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 the Higher National
Diploma in Production and Operation Management (POM).

Furthermore,
the researcher has also undertaken the study in order to gather necessary
information and suggest solution to the problem facing materials management in United Nigeria Textile Plc (UNT Plc),
Kaduna.

1.6     SCOPE
OF THE STUDY

The
subject matter “Materials Management” has an area of coverage within its
concept, i.e. theory and practice in the private sector. This would also
include purchasing, stocktaking and stock checking of materials. 

1.7     LIMITATION
OF THE STUDY

In
carrying out this research, certain problems were encountered which in fact
hindered the area of coverage.

·               
The researcher faced the 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 backlog in writing
the project.

·               
Unco-operative and bureaucratic attitude of United Nigeria Textile Plc (UNT Plc), officials
who were reluctant in providing necessary information in writing.

·               
Despite all these constraints, the researcher
was lucky to gather vital information that made the investigation a success.