THE EFFECT OF MATERIAL HANDLING ON THE PROFITABILITY OF A MANUFACTURING COMPANY
Material Management, as practiced in business today, can be defined as “a confederacy of traditional material activities bound by a common idea. The idea of an integrated management approach to planning, comersion flow and distribution of products materials form the raw materials state to the finished state. (Iornum, 2007).
The above definition implies that material management is generally concerned with the flow of materials from the source of supply through the production line to the final consumers. This means that material management includes such function as the primary responsibilities of purchasing plus other major procurement responsibilities like Inventory Control, traffic, receiving, warehousing as well as production planning and control.
Cater Douglas also defined material handling as the aggregate of those ordinary courses of business which are in the process of production of goods or services to be available for sale.
Material are significant portion of most firms of assets which accordingly requires substantial investment in order to keep these inventories from becoming unnecessarily large, material must be managed effectively. In modern business greater emphasis have being put in material handling. It concern in material management is to provide materials in the right condition at the right time. It implies that the handling procedures should be able to:
- Retain appropriate stock level
- Ensure proper use of stock
- Ensure that inventory is fully amounted for
Jonny Ater – defines material handling as the movement and protection of materials goods and products through the process of maintaining, distribution, consumption and disposal. Material handling should be controlled and carried out properly if a huge standard of efficiency and cost effectiveness is to be achieved.
B.K Bharabo defines material handling as the art and science of moving, packing and storing of material in any form.
- Statement of the Problem
Material handling in manufacturing organization is an important aspect of production process. Many companies engage diverse strategies to achieve organizational goal through material handling.
The control of material handling as it affects Kaduna Refining and Petrochemical Company (KRPC) is the unavailability of material in store and proper reconciliation of possible loss to business through interruption of production or failure to met orders with the handling cost of stock. Here in Nigeria, a cursory look at our economic problem will appear to suggest the non-adaptation of materials management which is a product of our industrial philosophy that has made our manufacturing sector over important dependent. Though, the organization (KRPC) under the study has advanced stores and way of obtaining their materials, but lack proper personnel to handle the material is a problem.
Objectives of the Study
The following are aimed at realizing the following objectives:
- Analyzing the impact of material handling in KRPC.
- To know the importance of material handling in an organizational performance are as a whole.
- To provide useful recommendation as related to the study.
- To give future research room to improve on where the present research stops.
- Statement of Hypothesis
H0: Material handling has no effect on the profitability of a manufacturing company.
H1: Material handling has effect on profitability of a manufacturing company.
Significance of the Study
The significance of the study is to assess the impact of material handling in KRPC and also to suggest and make recommendation to the problem that they may likely occur is material handling is not properly managed in an organization. The research is of significance to me for the following reasons:
1) It will provide a broad idea to the production company on how they can effectively manage their material handling and minimize losses.
2) It will idea for organization and enterprises in the aspect of material handling.
3) It is highly pointed out that the cost material handling involves 40% to 50% of total production cost. Therefore, considerable attention must be taken in the material handling.
4) Material handling also reduce accidents, greater job satisfaction, increase production and saves time.