The aims and objectives of this work is to
examine “The Effects of Materials Management Techniques on Production Planning”
with references to Nigerian Bottling Company. Material management is open to so
many problems in industrial sector in Nigeria, especially when theory and
practices are compared. Among the company which the problems facing materials
management in Nigeria, which is also of peculiar to the company project is
based on are: multiplication of material management principles,
unprofessional/skilled personnel, given the task of material manager. The
researcher shall equally consider the following points: the purpose of the
study, historical background, statement of the problems, limitation and scope
of the study, rational for the study. Literature review on materials
management, production planning, materials control, purchasing, stock ordering
and types of stock taking, benefit of stock taking. Methodology, research
methods and approach used, justification for approach used. Presentation and
analysis of data, and also test of hypothesis. Summary of finding, conclusion
TABLE OF CONTENTS
Title page - - - - - - - - - - i
Declaration - - - - - - - - - ii
Approval page - - - -- - - - - - iii
Abstract - - - - - - - - - - iv
Table of Contents - - - - - - - - - v
1.1 Background of the Study - - - - - - 1
Statement of Problem - - - - - - - 4
Objectives of the Study - - - - - - - 5
Statement of Hypothesis - - - - - - 5
Significance of the study - - - - - - 6
Scope of the study - - - -- - - - 7
Limitation of the Study - - - - - - - 7
Historical Background of the Case
Study - - - - 8
Definition of Key Terms - - - - - - 10
2.1 Definition of
Materials Management - - - - - 13
Planning - - - - - - - 23
Control - - - - - - - - 24
(Procurement) - - - - - - 27
Ordering - - - - - - - - 29
2.6 Types of
Stock Taking - - - - - - - 30
2.7 Benefits of
Stock Taking - - - - - - - 33
Design - - - - - - - - 34
3.2 Research Population - - - - - - - 34
3.3 Sample and Sampling Techniques - - - - - 35
3.4 Methods of Gathering Data - - - - - - 35
3.5 Justification of Method Used - - - - - - 35
3.6 Method of Data Analysis - - - - - - 36
3.7 Justification of Instrument Used - - - - - 37
1.1 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.
classifying and coordination of stocks
inventory control and stress accounting
house layout and organization
house storage handling and distribution
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
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
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:
assess the impact of material management on organizational performance.
appraise and further appreciate the significance of material management in a
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
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 searcher 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:
researcher faced problem of sourcing for materials for the project.
constraint was a factor the researcher encountered. This resulted in the
backlog of the researcher’s class work.
of textbooks related to the subject matter also contributed to the backlog in
writing the project.
and bureaucratic attitude of Nigerian Bottling Company 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.
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 which 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, Ginder 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.
of the Company
produce soft drinks to the consuming population
re-profit with the purpose of expansion
provide employment opportunities
carry out the distribution activities of its production by supplying direct to
penetrate and dominate the Nigeria soft drink market
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
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.
It is a form usually prepared when a department or stores need materials to be
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
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.