ASSESSING THE EFFECT OF MATERIAL HANDLING ON THE PROFITABILITY OF A MANUFACTURING COMPANY (A CASE STUDY OF KADUNA PETROCHEMICAL COMPANY)
Definition of Material Handling
Iornum (2007) defines material handling as an aspects of material management which is concern with the safety of material in transit with the regularity of delivery, as well as the flow of materials.
According to Badi (2004) Materials handling refers to the movement of materials inside the work premises from raw materials stage to finished product storage. Maximum movement activity takes place on work-in-progress.
Material handling is actually the process of moving through a full cycle of operations form the procurement of raw materials, include reception and storage prior to use, handling into and between processes and the handling of the finished goods, packaging, storage and distribution. In other words, materials handling is the art of moving things economically and safety when used properly, material handling result into some the linking of all the processed within the functions of business into a single efficient machine or system.
However, materials handling absorbs time, manpower and money. It adds nothing to the value of items, but only its cost. Materials handling must therefore be controlled and carried out properly if a high standard of efficiency and cost effectiveness is to be achieved.
Better material handling reduces:
- Handling cost
- Space cost
- Damage for poor handling and storage
- Labour cost
- Production waiting time on one hand,
But materials handling increases:
- Effectiveness and quality controls
- Safety level
- Productive capacity level
- Efficiency in receipt, storage and dispatch proper material handling requires a lot of pre-planning which should begin with a systematic analysis of the nature of the handling problems at hand.
2.2 Place of Material Management in a Production System
Westing and Zone (2003) defines material management base on production system as “one of the several activities dealing with the planning for acquisition and ultimate organization structure which involve those activities such as purchasing, inventory control, traffic, material handling, and production control. For the survival of a production organization will no longer be producing organization. In fact, materials are the main input in any production system it is the importance attached to raw materials that calls for a proper management of raw materials in an organization.
Moreover, the benefits occur to organization as a result of materials management concept cannot be the major responsibility of single department (material department). Therefore such responsibilities has to be shared to various departments in the materials under one umbrella known as material management for better accountability, better control, better handling, maximum efficiency necessary recording of data required and reduction to various acquisition cost.
2.3 Handling of Materials in a Production System
Materials today are lifeblood of any industry and no government industry or organization or private organizations operates without them. Materials must be available at the proper time, in proper quantity, at the proper place and at the right time. Failure of any of those responsibilities concerning material, add to organizations cost and decreases organization profit.
Baggot (2000) informed that the importance of materials handling cost varies widely between different industries. He said, in sugar refining materials might represent over 90% of the total production cost whereas in the extractive industries there is really no direct cost of material at all.