APPLICATION OF MATERIAL MANAGEMENT CONCEPT IN MANUFACTURING INDUSTRY (A CASE STUDY OF OKIN BISCUITS NIGERIA LIMITED)

CHAPTER ONE

1.0 INTRODUCTION

The issue of materials management and its operational effects in the manufacturing organization is among the last of the specialized business function to centralize and given responsibility and authority of making major contributions to profits. Since the basic goal of any manufacturing company’s activities is the development and manufacturing o products that can be marketed at a profit, this is accomplished by the appropriate blending of what management authorities called the five m’s: machines, men, materials, money and management which are interrelated factors that must be combined properly to achieve economic production, satisfactory and adequate services. Also the effective management of materials engenders the production and modification of materials into useful forms through the utilization of various manufacturing process.

In most business operation today, the cost of materials is the remaining cost that is truly variable, all other major cost are either fixed or semi fixed and to this effect, the cost of materials in a typical manufacturing organization constituted about sixty – five percent of the total operational cost. The opportunity for profit improvement in the materials area is virtually impossible to match in any other area of business operation. Also, in a manufacturing organization, materials is the life wire and no company can operate without them, only the most progressive manufacturing firm realize that material availability, engineering or purchasing specifications fabrication cost and distribution cost are all factors which impinge on total material cost and all these factors must be coordinated and controlled by a system oriented called material management.

Materials management can therefore be defined as a science based Art, which deals with the planning, organizing, controlling and directing of supply and processing activities of materials in an organization. It follows that the management of materials in an organization is all embracing than any other arms of management because of the diverse activities involved and the complexity of the problems it process in synchronizing the activities to make them a successful whole

From the above view, it can be seen clearly that material management is an organization leadership task and onus of the leader’s task is effective and efficient coordination and development of available human and materials resources so as to achieve the objectives of the organization. So, whosoever is conferred with the responsibilities of ensuring successful performance of the above activities is regarded as materials manager.

1.1   STATEMENT OF PROBLEM

Until very recently, the materials management profession had hitherto been treated with wave of the hand. This is why most of the very useful models and techniques developed by the supply experts have not received popular recognition by most companies in the industrial set-up.

Investigations revealed that the company that forms the subject matter had found it difficult to see to materials management as an entity capable of making meaningful contribution to its profit planning and in material control programmes. For this reason, the procurement function has been swept under the carpet by the management of 0kin Biscuit.

The trade of this non-recognition can still be felt in the organization of the company concerns its application of material management. A lot still need to be done to put the company on a sound footing in the areas of materials management.

The problem is not peculiar to 0kin Biscuit Industry alone, it is a problem to be seriously addressed by the majority of manufacturing companies of today: otherwise, the vast colossal sum of money being lost to un-orthodox purchasing practices will continue unchecked.

1.2   RATIONALE (AIM) FOR THE STUDY