AN APPRAISAL OF MATERIAL MANAGEMENT CONCEPT AS A STRATEGY FOR ACHIEVING HIGHER PRODUCTIVITY IN NIGERIAN BOTTLING COMPANY 

CHAPTER ONE

INTRODUCTION

1.1     Background of the Study

The Need for Appraisal of Material Management Concepts as a strategy for achieving higher productivity and to make up with the growing complexity of industrial needs. Management performance appraisals is one of the most important opportunities in effective delivery of the company’s set objective if done correctly, performance appraisals can help close the gap between the actual performance of the company and the performance needed to make corporate objectives.

Appraisals Management can be compared to an annual check-up: both provide an opportunity for an honest assessment of how you are doing. You need to know what you are doing is right so you can continue with those activities.

Modern management has expanded the traditional scope of purchasing and procuring to cover the entire material management process. Thus Lee and Dubler (1983) define Material Management as a confederacy of traditional material activities bound by a common idea, and of intergraded management approach to planning. Acquisition, conversion, flow and distribution of production material from the raw material state to the finished product state.

The concept also provide for delegation of responsibility and authority with regards to procurement and supply of material. The concept also recognizes the importance of the principle of accountability by providing a management approach which is responsible for all decisions.

Through material management, there is relatively recent concept much through has been given to it particularly since World War II, when industries all over the world were awoken to the fact that tremendous economies could be achieved by sufficient material management. The concept is today relevant to business organization because they will have a centralize body responsibility for buying with the overall advantage of procuring standard material at possible bulk. Disco unit and obtaining special vender relation. It means that spending valuable money is in the heart of people who are trained and competent for this job.

Performance Appraisal in Material Management evaluates materials employee’s current and past performance to the productivity standard, management processes through which companies ensures that the materials are working towards organizational goals include, practice through which manager defines the materials sets targets and work, develops the productivity and evaluate the outcome of production.

Frequently, it is found that material are expensive and in order to reduce overall costs, it require the close cooperation and co-ordination of material and other user department to ensure that material ordered are made to arrive only when they are needed, the benefit of this approach is that of cost reduction and maximization of the company’s profit.

Thus, the growing need for efficient operation of material management is increased in recent time.

1.2     Statement of the General Problem

Attempts has been made towards operating on integrated approach to their material problem such as lead time organization is not certain so therefore time given to complete a given task of production delivery of goods always exceeds the expected given time.

The use of quantitative techniques in assigning jobs in some organization may cause wastages of materials as the individual involved may not have the skill and technical know-how to carry out the task effectively and efficiently.

Lack of training and retraining of members of staff on how to use the materials and keep the proper records of inventories can also bring losses and production of inferior or scraps that may not be useful to the stud intends to investigate on the strength and weakness of workers, maintain good record keeping and to know the problem of material management in the case study (Nigeria Bottling Company).

1.3     Objectives of the Study

An appraisal of Material management concepts as a strategy for achieving higher productivity in Nigeria Bottling Company is the systematic evaluation of the performance of materials and to understand the abilities of a production for future growth and development having the following objectives:

i)                   To maintain records in order to determine compensation packages, wage structure.

ii)                To identify the strengths and weaknesses of materials (human and raw materials)

iii)              It serves as a basis for influencing working habits of the employees.

iv)              To review and retain the promotional and other training.

However, it is hoped that the research will serve as a guide to students who would also like to make further research in this field, and to benefit the school by keeping it in the library for reference purposes, in view of the above the researcher has decided.

1.4     Statement of Research Hypothesis

A hypothesis is a conjectural preposition, an uninformed intelligent guess about the solution to a problem. It is an assumption or proposition whose validity is to be established. For the purpose of this study, the following hypothesis is used:

H0:     The application of material management techniques does not increase the profitability of an organization.      

H1:     The application of material management techniques increase the profitability of an organization

1.5     Significance of the Study

The significance of the study is to benefit both the research and readers, for it makes for a very interesting and educational reading, since the study will attempt to make everything in detail which will attract readers and future readers.

The research hypothesis and date analysis will also enable organization to determine whether or not effective application of material management technique increase the profitability of an organization.

1.6     Scope of this Study

Material management being a complex concept has a wide area of coverage so it is obvious that research of this nature cannot hold without problem. As such the work limited to the area. The researcher face are crucial or relevant to the problem under investigation that affects material management as a tool toward organizational profitability in manufacturing organization.

1.7     Limitations of the Study

A study of this nature will normally entails investigation into a variety of issues to be able to achieve a comprehensive study of the problems, a lot of constraint would be encountered in form of collection of data, lack of adequate information and scarcity of researchers infrastructures. As a result of this, certain limitations will be imposed on the are to be covered.

Inaccessibility of data (collection of data) to provide the necessary information were difficult to acquire, especially the financial figures, some of the employees who co-operated were not in better possession of the facts and figures necessary in this project.

However, limited area of study, there are many section in the organization of all forms of materials, however, the researchers intension is to concentrate only on the materials store for the project. This project apparently pose serious limitations to this project and the researcher has to work with data that are available.

Furthermore,  there are hardly many writers on the subject matter, therefore text books on this topic are scare, so the information was gathered from books of accounting and purchasing, internet. Also due to the nature of the co-operation Nigeria Bottling Company have adopted strict security measure to non-organisation staff following the trend of events which posed problem to this write up.

Fourthly, the study will be confirmed to KRPC who do to have a library section which would have ease the researcher by providing an information containing its comprehensive details of its operational background from inception.

Moreover, there were difficulty of securing valid personal or confidential information and the uncertainty of receiving adequate number of responses to represent satisfactory sample.

1.8     Historical Background of the Study

Nigeria Bottling Company Ltd was incorporated in November 1951, as a diary of the AG Leventis group with the Franchise to bottle and sell  Coca-Cola product in Nigeria.

Production began in the year 1953 at a bottling facility in Ebute-metta, Lagos.. over the years production capacity has grown and it presently ha 13 Bottling Facilities and over 80 distribution warehouses located across the country.

Nigeria Bottling Company Kaduna is one of the few multinational organization that had its beginning in Nigeria from a small family owned operation at inception, which have grown to become the predominant bottles of alcohol free Beverages in Nigeria, responsible for the Manufacture and sales of over thirty three different Coca Cola brands since the production started Nigeria Bottling Company has remained the larges bottler of non alcoholic beverages in the country in terms of sales volume with about 1.8 billion bottles sold per year, making it the second largest market in Africa.

Today Nigeria Bottling Company is part of the (Coca-Cola Hellenic) one of the Coca Cola company largest anchor bottle worldwide Coca Cola Hellenic operation in the 28 countries, serves more than 560 million consumers and with 2.1 billion unit cases sales. The company is driven by over 6000 employees, a culture of passion for excellence, sophisticated technology and the best distribution network in the country with 13 high performing bottling plants, over 80 depots and over 200,000 sales outlets nationwide, the supply some ubiquitous and best known brands including Coca-Cola, Fanta, Sprite, Schweppes, Eva Water and Five Alive.

Nigeria Bottling Company has two sections the soft drinks and agricultural section. The company operates on large scale Agricultural programmes with two firms situated at Zaria in Kaduna State, it established three depots under Kaduna plants, Abuja, Zaria and Minna.

The plant in Kaduna is headed by a Plant Manager to whom five sectional heads report, the section that make up the plant and who are report to the plant manager are clinic, sales, production, accounting and engineering.

1.9     Definition of Terms

Appraisal: A judgment or assessment of the value of something, especially a formed on.

Material: These are items used directly as part of the product being produced.

Material Management: A business logistic and refers to overseeing the location and movement of physical items or products.

Concept: An understanding retained in the mind, form experience, reasoning and imagination, a generalization or abstraction of a particular set of instances.

Material Management Concept: The experience on how to effectively and efficiently manage physical items and human resources.

Strategy: A plan of action intended to accomplish a specific goal, the art of using similar techniques in a business.

Productivity: The rate at which goods or services are produced by the standard population of workers, or the state of being productive, fertile or efficient.

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