IMPACT OF STORAGE AND MATERIAL HANDLING ON STORE EFFICIENCY IN AN ORGANIZATION

CHAPTER I: Introduction

The primary objective of the store function is to provide service to the operating functions and these services cannot be provided without proper provision of storage facilities.

The impact of storage facilities on store efficiency is to ensure that goods regularly required are stored accordingly. Adequate care of materials held within the organization is very important and stores, staff must be well trained in ensuring that materials held within the store are well taken care of storage facilities such as bins, racks, shelves, flat pallets, spillage post, box pallets, stock staking silos, tanks etc. some methods of storage are associated with particular methods of handling and therefore, the task of handling materials or stock and that of storage must be taken together.

Therefore provision of materials handling is another essential objective of the store function storage procedure also encompasses store design and store location system, storage

cannot be effectively done without taking into consideration, the design of the store which involves planning so that stocks are conveniently grouped and placed for efficient operation.

The store should also be designed in such a way that easy flow of items or material held will be ensured without hindrances cause by the choosing of gang ways or blocking  to access. Store location system is also important for ensuring proper storage of materials or stores. This is to ensure that stores can be found when they are wanted with the minimum waste of time. The location system to be adopted for certain store house must be decided. For example it may be fixed or random. All goods location system therefore must not only locate the them but also conjure up a mental picture of its precise position within the store house. In many organizations both public and private sector, much emphasis has been laid on procurement and less storage and its associated functions.

This research work is to review the storage procedure and its impact on stores efficiency and in doing this, the storage procedure adopted by Peugeot Automobile Nigeria limited (PAN) kaduna shall be looked into to ascertain its effect on stores efficiency.

1.1       Background to The Subject Matter.

Eighty percent (80%) of organizations expenditure are on materials. This materials when acquired are kept in the store and properly documented. The issuance of this materials has to follow official issuing regulations.

Since stock of materials represent money, it is important to research into how this materials are received, kept and issued with the aim of comparing the practical administration with the theoretical knowledge acquired in school over the years. It is also hoped that suggestions and recommendations will be made regarding modern, scientific and better systems of storage and material handling.

1.2       Statement of Problem

There are enormous varieties of materials in store house of all kinds, and yet there are increasing varieties every now and then because of advancement in technology due to innovation and renovation. These have brought about a careful and important role to be played by the store as appropriately as expected.

So many damages has been caused to materials in the store and which has led significant losses, the material handling, improper store design, location system, storage procedures etc. Many materials have lost their ability due to poor storage facilities, many other materials that should be stored or kept in cold place are exposed to light in different forms have deteriorated due to this poor storage procedures and lack of qualified or experienced and adequate staff to manage the store efficiency.

These problems do not just arise but as a result of poor storage procedures. Bad management and financial constraints which hinder the purchase of adequate handling equipment of qualified personnel.

1.3       Objective Of The Study

This project is intended to look at the problems associated with the storage an material  handling and  it’s efficiency in  Peugeot Automobile Nigeria limited.

1.         To know the contributions of store to the development of an  organization.

2.         To know the objective of storage of materials contribution to the organization.

3.         To knew the methods of materials handling suitable  for Peugeot. Automobile Nigeria Limited.                            

1.4       Significance of The Study.

The research exercise is conducted primary to meet the requirement for the award of Higher National Diploma in purchasing and supply of kaduna polytechnic.

 The aim is also to express my concecptual knowledge in the areas of storage and materials handling efficiency and to know how materials are being stored and handling in Peugeot automobile Nigeria limited.

This researcher choose this topic to highlight the inherent danger and consequence of adopting in proper storage and handling of material in Peugeot Automobile Nigeria limited kaduna from suppliers to the finished product with a view of providing solution or making the industry to take necessary corrective realistic measure of storage and handling of material and employ services of skillfull, honest, qualified and intelligent personnel to handle the store. If the solution to be provided in the  research work are applied to store and handling of material of the company (PAN) it will show the impact in an organization efficiency and performance.

Another vital reason of the study is to contribute to the existing literature in the area of storage and handling of material in store house for future references. It will enable a lay man in the profession to have first hand information on how proper storage and handling of material is carried out in store. Also the students of the department and other department will find this project as an important and relevant source of literature review in the area of handling material. Further, the study will suggest ways that the company can handle material on store efficiency.

1.5       Delimitation of the Study

This  research work  will cover the areas in which storage and material handling is based on most especially the place under study witch is (Peugeot Automobile Nigeria Limited) the way they produce and the objective of material handling in their organization, store efficiency and the way the storage corporate with organization and the techniques used in store efficacy and how to store material in order to  achieve the desired  goals and  objectives of the organization which is (Peugeot Automobile Nigeria Limited).                                            

1.6       Research Question

1. What is the contribution of store to the development of an organization.
2. How do the objectives of storage of materials contribute to the organization
3. What are the methods of materials handling, suitable for the case study.

1.7       Brief History of Peugeot Automobile Nigeria Limited (PAN)

Peugeot automobile Nigeria (PAN) was incorporated in December 1972 as limited liability companys principally to produce all sell Peugeot cars and provide a platform for the development of middle and lower industries. PAN formally commenced production on 14th march, 1975 with the initial production capacity of 240 cars per day in two separate shifts, bringing the annual capacity at that material time to 60,000. However, between 1980 and 1981 the production capacity improved substantially to 90,000 cars per annum.

Peugeot Automobile Nigeria limited (PAN) is situated on a total surface area of 330,000 square meters, the equivalent of 82.5 acres. It has a total free space area of 177,200 square meters, which underscore the fact that the company in the course of further development will still have enough land space in the near and remote future. As its incorporation in 1972, PAN had the following structure development.

1. Federal government of Nigeria              =          35%

2. Bank of industries                                               =          5%

3. Automobile France                                              =          40%

4. Kaduna state government                                   =          4.7%

5. Katsina state government                                   =          5.3%

6. SCOA (Nig) plc.                                       =          5%

7. UTC (Nig) Plc                                                       =          5%

Between the year 1975 and 1986 (approximately 12years), PAN was producing a total of 415,870 cars perannum. The models of Peugeot being produced then were 504Gl, 504sw/ac models, save during the initial two years of its production, when it briefly produced the 404 salon model,. Between 1982 and 1998, the 505gl/sr models were added to the list of brands produced by the company. In the same period, the company added the 505 Gl and ST evolution. Subsequently the 306salon model come on stream between 1995 and 2005, while 406 salon was introduced into the market where it has remained since 1999 to date.

Number of employees

Total (708), management (32), expatriate (13).

Change of Ownership a New Beginning.

The second phase of the historical background of PAN takes off from the privatization policy of the federal government of Nigeria. The policy offered

great opportunities to indigenous companies to bid for and acquire majority shares in public enterprises. It was this policy that catalyzed a core investor, messrs ASD motors limited, into acquiring majority shares in PAN, leading to its eventual take over of PAN management in the year 2007. The change of management to the current one represents a paradigm shift which may be described as “ anew beginning “ being the end of an era and beginning of a new one, hence, our current reference to the company as “ the new PAN,” spelling new hope and challenges.

The new ownership structure of PAN now is,

1. ASD motors limited                                                   =54.87%

2. Federal government of Nigeria                          =40%

3. Automobiles Peugeot of France                           =10%

4. Bank of industries                                                =5%

5. Kaduna state government                                     =4.7%

6. Katsina state government                                               =5.3%

7. SCOA (Nig.) plc.                                                 =5%

8. UTC (Nig.) plc.                                                    = 5%

Management Structure   

The organization chart of PAN ltd is structured to enhance efficient and effective operations. At the apex of the pyramidal chart is a board of headed by a chairman. The general management team which oversees the day to day activities of the company is headed by managing director assisted by a deputy managing director and supported by four general managers whom run the affairs of the company’s four major divisions, which are namely: industrial, commercial, finance and strategy and corporate resources.

Products Manufactured And Marketed

Peugeot brand of motor vehicles (206 saloon, 207, 307 saloon and Hatchback, 406, 407, Saloon and Station Wagon, 607, Partner, Expert, and Boxer)      

1.8       Definition of terms

Storage: the management of store  houses and  stock yard operation  of handling of storage equipment, the safe custody and  protection of stock.

Store House: A building where items of stores are kept, pending the time they are needed.

Stores: It refers to goods held in the  store houses and stockyards, it covers finished product awaiting dispatch to consumer scraps and other items.

Material: these are components, spare parts, raw materials that  are kept, pending the time they are  needed.

Deterioration: means the materials that is damaged in their original quality or value.

Bin Bin: The type of storage facilities used in holding most of the stock items required for normal issue  and  from which most  issues are made.

Racks: Are   use for items which are too big or heavy for bin accommodation.

Stock: the quality of goods available or supplied into the store house.

Obsolesce: this is a situation where  materials bought are getting useless but not yet useless.

Obsolete: Materials are  regarded as being obsolete when it is no longer useful for the purpose for which they are needed.

Pallets: are used to move  stores   from receipt to bins from picking through  placing to dispatch or from  storage area to maintenance  and  back  again.

Inspection: examining object for identification or checking it for verification of quality or quality of its characteristics.

Quality: Is the totality of features and characteristics of a product and services that bears  on its ability to satisfy a given  need.

Quantity: refers to the value or amount of a commodity required for a particular purpose or that can be more economically purchased at a particular time.