THE EFFECT OF MATERIAL MANAGEMENT TECHNIQUE ON PRODUCTION PLANNING PROCESSES

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.

• Identifying, classifying and coordination of stocks
• Provision, inventory control and stress accounting
• Store house layout and organization
• In house storage handling and distribution
• 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:

1. To assess the impact of material management on organizational performance.
2. To appraise and further appreciate the significance of material management in a manufacturing industry.
3. To identify and ascertain some of the problems poised by materials management in Nigerian United Nigeria Textile Plc (UNT Plc), Kaduna.
4. 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.

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

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.

1.8 HISTORICAL BACKGROUNOF UNITED NIGERIA TEXTILE PLC (UNT PLC), KADUNA.

The United Nigeria Textiles PLC, formally called the United Nigeria Textiles Limited (UNTL) is located in Kakuri Industrial Area of Kaduna South Local Government area of Kaduna State.

Mr. Cha-Chi-Ming, a Chinese founded it on May 7th, 1964, with some Nigerians and commenced operations in early 1965. The company started operating as a finishing plant, importing policy on backward integration in June 1976, the company immediately acquired and installed its first spinning and weaving facilities to produce its own Grey Baft from locally grown cotton.

For its determination to expand its operation the company acquired controlling interest in Zamfara Textiles Industry Limited (ZTIL) in 1976, by this, there is a steady supply of Grey Baft for its highly efficient finishing plant in Kaduna. UNT. PLC is the only factory capable of producing highly sophisticated wax prints in the country and indeed the whole of West Africa.

In 1976, fresh idea of another factor was conceived, so in 1977 its incorporated Funtua Textiles Limited (FTL) to produce materials different from the conventional products of Kidnap factory and Gusau factory, the Funtua Textiles United produces high quality bedspreads, pillow cases and cotton/polyester fabrics in various designs and colours.

In 1980, the company bought Norspin in Kaduna from its former owners UAC. The name Norspin was changed and its is now a subsidiary company registered as unitex Limited and an associate company named Supertex limited. Unitex Limited is a spinning plant producing yam for the sole consumption of UNT Plc, while Supertex limited is a finishing plant producing wax prints for export to ECOWAS countries and USA with the support and encouragement from business-like partners such as Northern Nigeria Development Company (NNDC), Nigeria Industrial Development Bank (NIDB), New Nigeria Investment Limited (NNIL), Kaduna State Government and the Federal Ministry of Industry. In view of technological advancement UNT. Plc have embarked on basic technological review of its machines and equipment through computerization, restructuring and modernization of its various components units, improved transportation system. It was scientific approaches to solving environmental problems. It is the first mill in Nigeria to acquire and install its own effluent treatment plant for minimizing health hazard and preventing land water pollution.

UNT plc is the largest employers of labour among textiles industries in the country and the largest in terms of production capacity. It has a total workforce of 15,000. The total install capacity is for ninety six million meters (96m) finished materials. Currently the company is expanding its factory building to accommodate additional processing machines for its blocked real wax prints and finishing department. The expansion of the finishing department will enable the company to engage in bleaching, dying and finishing of synthetic cotton blend textiles.

The aims and objectives of the company are to undertake the production and marketing of textiles commodity. Thus, it is involved by weaving, dying and printing of textile materials which has helped Nigeria in providing employment as well as having locally made textiles materials without difficulties and at cheaper prices compared to imported ones.

OWNERSHIP STRUCTURE OF UNT. PLC

At inception the paid-up of capital of UNTL (now UNT.Plc) was N1.4million. The shareholders of the company are made up of the followings:

1. Private individuals from china                      49.5%
2. UNT. Plc staff                                                          21.17%
3. Other Nigerians                                             15.6%
4. International finance corporation (IFC)       7.8%  
5. New Nigerian Investment Limited               5.6%

ORGANIZATIONAL STRUCTURE OF UNT.PLC 

At the apex of UNT.plc organization is the board of directors. The shareholders elect the members and they hold the office for  terms, which are renewable at the expiration of each term. Following by the managing Director (MD) who implements the board’s policies and decisions taken at the board meeting on the running of the organization. The company secretary stands between the board of directors and the managing director. However, the managing director is accountable to the board, the board are in turn accountable to the shareholders.

The managing director is charged with the day-to-day running of the organization and assisted by experienced managers who from the nucleus of the management. There are departments most of which have sections; a senior manager referred to as assistant general manager (AGM) mans each of the department. The department comprises of human resources/personnel, sales finance, production and administration departments.

The chart below shows the organizational structure of United Nigeria textiles Plc, Kaduna.

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.