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ROLE OF MATERIAL MANAGEMENT IN PRODUCTION ACTIVITIES

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

In recent years materials functions has experienced total information by business management. It is the least of the responsibilities and authorities for making major contributions to projects and it has yielded positive result in the business world. In most business operations today, the cost of materials has an important role in fixing the price of the finished product. This is because when materials are bought with high prices, the finished products coupled with the production activities will also be of high price. The phenomenon determines whether the company will make profit or incur lost at the end of the production. Therefore, efficient and effective management of materials are essential for the survival of any organization. It also reduces the problems encountered during production activities. Materials management concept brings together under one manager the responsibilities for planning, organizing, controlling, motivating of all those activities principally concerned with the flow of materials into an organization. It is also concerned with production and control of activities involved in acquisition and use of materials in the industry.

BRIEF HISTORY OF THE COMPANY

The name of the company is Lexos paints Limited. It is indigenous company incorporated under the law of the federal republic of Nigeria carrying on business manufacturing of domestic and industrial paints for the building/civil engineering sector of the economy. The corporate office is located at no.3 Elebor street, off Zulu Hotel Limited, Oroworokwu town port Harcourt River’s state .while the factory is located at location road oyigbo Port Harcourt, River’s State. In the paints industry, lexos paints Nigeria Limited are a specialist in domestics and industrial coatings. The minor civil works such as POP Designs and manufacturing/ production of filler.

LEXOS PAINTS PRODUCT/FEATURES:

PRODUCT LINE:- The company has varieties of products in the products line. They include the following: 

ADHESIVES: - Lexus stick [gum/glue]

Thinner [wood finish]

DECORATIVE COATINGS: - Lexos Emulsion

- Lexos Texcote

- Lexos printer/Gloss

PROTECTIVE COATINGS: - Industrial coating

-Marine paints

-Auto-Mobil paints

PRODUCTION FEATURES

The company’s value product can be distinguishable by the following technical analysis: 

Water resistance 75%

Product courage 16mtrs/squre meters

Anti-fungi 80% [because of Anticide]

BG/Acrytex are used]

Stability 100% [because of Acrylics binders]

Weather 100% [adaptability]

Binding 85% [on a well treated wall]

Coloring Stable (according to client specification)

1.2 STATEMENT OF PROBLEM

In the recent times, companies has been facing the problem of getting materials of the right quality, quantity, and at the right time and from the right source as a result of change in taste, fashion, technology, population etc. This means continues in the future because human beings are insatiably.
As a result of this production of activities has been hampered in this present time, in order to reduce the problems that will arise from the above mentioned changes, materials management department or another related organizations gives solution to it. This is to ensure that the problems are reducing the cost associated with the changes. The problems are thus listed below:-

(1) The trend in lexos paints industries towards the production of an increasing number of highly specialized complex materials and components.

(2) The re-occurring shortages of basic materials in stores department of lexos paints in Port Harcourt.

(3) The increasing use in business of computers and related electronic data processing equipment in lexos paints industries.

(4) The current trend towards factors automation in lexos paint industries.

(5) The increase rate of unqualified and inexperienced personnel found at different units of material management department of lexos paints industries.

1.3 OBJECTIVE OF THE STUDY

The role of materials management center’s on the co-ordination and control of materials activities with the view of reducing total materials cost and maximizing profit. In view of this, the objectives of this study in Lexos paints industries Nigeria Limited will include:

1. To find out in details the extent to which materials management approach has been adopted.

2. To find the best means of reducing overall cost of production through efficient management of the materials either as raw materials, bought out stationery, office furniture and fittings.

3. To examine, so as top come up with a better way of improving co-ordination and control of the various production activities that contribute to the total costs by advocating for material management type of organization.

4. To examine the caliber of staff involved in the various activities of material management.

5. To find out ways and means of reducing the re-occurring shortages of basic materials as seen in today’s economy through solisticated planning for sources of materials and acquisition within increasingly severe cost constraint.

1.4 SIGNIFICANCE OF THE STUDY

The findings of this research work on the role of materials management in production activities is mainly designed to enhance activities. The findings also eliminate the poor performance of purchasing department in carrying out of procurement activities. It will also be of good help to the student carrying out this project work and other students in purchasing and supply management. Lastly, the study will be of great benefit to Lexos paints industries Nigeria Limited and other companies with similar procurement problems.

1.5 RESEARCH QUESTION

1. How does the organization utilize materials to achieve effective production?

2. Does efficient materials management contribute to the profit of the organization?

3. Does the organization experience production stoppage due to lack of required raw materials and components for production?

4. Does materials management department contribute to efficient production activities in an organization?

1.6 RESEARCH HYPOTHESIS

A hypothesis may be defined as a declarations statement relationship between two or more variations used for better understanding of the problem of the study. The null and alternative hypothesis has been set out by the researcher to find ways of solving the problems. In carrying out this research, the researcher is using both (Ho) and alternative (Hi) to find out the role of material management in production activities.

HYPOTHESIS 1

Ho: Efficient materials management does not contribute to the profit of the organization.

Hi: Efficient materials management contributes to the profit of the organization.

HYPOTHESIS II

Ho: Co-ordination of materials management functions does not lead to efficient production.

Hi: Co-ordination of materials management functions lead to efficient production.

1.7 SCOPE OF THE STUDY

The research work meant to cover the role of material management in all industries as it relates to production activities. But as a result of time constraint, insufficient resources like finances and data etc. the researcher limited the research work to Lexos paints industries Limited information obtained will be used for generation, for other organization in the industry.

1.8 LIMITATION OF THE STUDY

The researcher in the course of carrying out research work contained some problems which in one way or the other limited the source of carrying the project study further few ones among then include:

1. INADEQUATE FINANCE: Constraints stands as one of the factors that make it impossible for the researcher to go around for this study, considering the fact that the researcher is a student and conserving also the huge transport fare that is involved, it is rather tasking and difficult.

2. TIME CONSTRAINT: The researcher being a student and has a lot of academic work to pursue, instead of examining all the roles of materials management in production activities in most notable industries, the researcher limited his study to Lexos paints industries Nigeria Limited Port Harcourt.

3. NON-RESOURCES: Most of the people interviewed in the course of carrying out this research were ignorant of the subject of the study. They failed to give elaborate information about the organization despite the fat that the information given will be confidential. Books related to materials management was unavailable in some of the library visited by the researcher.

1.9 DEFINITION OF TERMS

DISPATCHING: This is the selection of assignment of jobs by an individual work centre on the shop floor. A dispatch list is a schedule for a particular center. This can be generated easily by a computer and it’s issued daily showing the priority sequence of jobs to be done at the work center.

MATERIALS MANAGEMENT: Materials management is a concept which being together under one manager the responsibilities principally concerned with the flow of materials into an organization. As such it is concerned with production and control of activities involved in the acquisition and use of all materials employed in the production of finished goods.

PRODUCTION ACTIVITIES: These are activities that goes on in the production department like production planning and control which involves programming and dispatching.

MATERIALS ACTIVITIES: These are activities that have to do with materials, like purchasing, stocking, controlling, distribution and receiving, storage of inventory, packaging and production control.

PRODUCTION PLANNING AND CONTROL: This is responsible for producing detailed schedules of part material required to be produced or manufactured in order to realize the out come of the production programmed or sales forecast approved by the management.

PROCESSING: It is a control method used in measuring and feeding back information about various achievement and plan to take corrective action.

STORAGE: This involves the physical handling and housing of parts and materials either as bought or in various stages of manufacture or as a finished product for sale.

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