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IMPACT OF MATERIALS MANAGEMENT IN THE PRODUCTIVITY OF SEVEN-UP (7UP) BOTTLING COMPANY

CHAPTER ONE

INTRODUCTION

 1.1  Background of the Study

No organization can operate without material input. The efficiency of any activity for production of goods and services depends to a great extent, on the supply of materials equipment and manpower made available in their right proportions. Therefore, in order to meet the needs of the customer while meeting the set objectives there is a great need for a continuous production schedule which is only made possible by holding of the aforementioned ingredients in form of stock.  Materials management is that aspect of business activity that deals with planning for purchasing, receiving, handling, storing, and releasing of materials for use in production with effective control measures. Also, materials are industrial goods that will become part of another physical product. Rumelt (2002), classified materials for use in manufacture under three headings:

> Raw materials primarily from agriculture and the various extractive industries e.g. mineral resources, fruits, and vegetables sold to processor.

> Semi-finished goods and processed materials to which some work has been applied or value added e.g. rods, wires, paper, chemicals, etc.

> Component parts and assemblies that are completely finished products of one manufacture, which can be used as part of more complex product by another manufactures.

Managing of these materials are referred to as materials management. Thus, materials management has been defined by Lee and Dobler (1997) as the total of all those tasks, functions and routines which are concerned with the transfer of external materials and services into the organization and the administration of same until they are consumed or used up in the process of production, operation or sales. Materials management includes all the activities relating to the acquisition, handling and control, and movement of materials and supplies used in the production for a firm's final product.

Materials management is a tool to optimize performance in meeting customer service requirements at the same time adding to profitability by minimizing costs and making the best use of available resources. The basic objective of materials management as explained by Banjoko (2000) and Jacobs, Chase, and Aquilano (2009) is to ensure that the right item is bought and made available to the manufacturing operations at the right time, at the right place and at the lowest possible cost. They stressed that without adequate planning for material resources, the overall performance of an organization may be crippled. Barker (1999) articulated that improvement in continuity of supplies with reduced lead times, reduction in inventories with reduced obsolescence and surplus, improvement in cooperation and communications with reduced duplication of effort, reduction in materials costs, improvement in quality control, improvement in status control, and quicker identification of problems are the main benefits of materials management in organization.

Materials management is a tool that can be used effectively in promoting profit maximization in a company. The objective of materials management is to maximize the use of the firms' resources by ensuring adequate supply of materials for production process and also minimizing cost of holding excessive inventories. This objective when achieved, leads to cost reduction and improve performance, hence, the purpose of this study, impact of materials management in the productivity of Seven-Up (7Up) Bottling Company.

1.2   Statement of the ProblemOrganizations are 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 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

The main objective of this study is to determine the effect of compensation management on employee performance. Specific objectives include:

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 posed by materials management.

1.4 Research Questions

i. What is the impact of material management on productivity?

ii. What is the impact productivity on organizational development?

iii. What are some of the problems posed by materials management?

1.5 Research Hypotheses

Hypothesis I

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

Hi: Material management does have significant impact on organizational performance.

Hypothesis II

H0: Material management does not have significant impact on manufacturing industry.

Hi: Material management does have significant impact on manufacturing industry.

Hypothesis III

H0: Material management does not pose a problem to productivity.

Hi: Material management does pose a problem to productivity.

1.6 Significance of the Study

This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.

1.7 Scope of the Study

This study is on the impact of materials management to gather necessary information and suggest solution to the problem facing productivity in organizations. The study was conducted in Seven-Up (7Up) Bottling Company.

1.8 Limitations of the study

The demanding schedule of respondents made it very difficult getting the respondents to participate in the survey. As a result, retrieving copies of questionnaires in timely fashion was very challenging. Also, the researcher is a student and therefore has limited time as well as resources in covering extensive literature available in conducting this research. Information provided by the researcher may not hold true for all research under this study but is restricted to the selected respondents used as a study in this research especially in the locality where this study is being conducted. Finally, the researcher is restricted only to the evidence provided by the participants in the research and therefore cannot determine the reliability and accuracy of the information provided. Other limitations include;

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9 Definition of Terms

· Material Management: This is defined as the grouping under one head all or some of the activities involved in the organization and use of materials employed from the need stage up to the storage of finished goods.

· Purchasing: Purchasing is defined as the activity directed to securing by legal means, the materials suppliers and equipment required 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.

· Purchasing 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. 

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