CHAPTER ONE

INTRODUCTION

1.1. Background to the Study

 It is with no doubt that Material Management (MM) is the engine that drives Supply Chain and Logistics of any organisation and an organsation practices material management when they adopt certain methods necessary to ensure the smooth flow of materials needed in the day to day running of the organization. Thus, how well the organization functions depends on the quality of materials supplied. Management of organisations plays a very important role in ensuring that the right quality of materials is supplied to enable the company carry out its day to day activity. According to Jacobs, Chase, and Aquilano, (2009) the principal goal of materials management is to guarantee that the correct material is available when it is needed with the lowest cost to the company.

Material management means the grouping of management functions supporting the complete cycle of material flow from the purchase and internal control of production, material is to the planning and control of work in process to the warehousing slipping and distribution of the finished products. The core of this concept is “material flow. This material flow has 3 phases upstream physical supply from the purchase, internal flow planning and control work in process and downstream flow the distribution of finished product. Carter (2005) defines material management as a concept which brings together under one manager the role of ascertaining the basic requirement of the organisation with respect to the value chain of products and services at workplace.

Organisational performance has been defined differently by different scholars but some of them are in agreement that organisational performance describes the attainment of set goals. Organisational performance is the organisation’s ability to attain its goals by using resources in an efficient and effective manner. Performance relates to the ability to achieve goals or a specific mission (Jacobs et al., 2009). James (2012) carried out an empirical study on material management using chi square as a statistical tool and found efficient Materials Management is positively related to firm success. Thus, through a well-organised organsiation of production materials, cost effectiveness can be achieved in an organisation.

Furthermore, materials management is to make available an intermittent sequence of material need or raw materials. The productivity of any organisation will be greatly affected if the management of the organisation does not pay special attention to material management in the organisation. Since, this is the lifeblood that holds the various components of manufacturing in any organization together and ensures that it will have all the necessary items needed to carry out its day to day activities. Successful implementation of material management in an organisation leads to reduction in duplication of functions, improvement in delivery of materials among other benefits (Jacobs, Chase, and Aquilano, 2009).

According to Wild (1995), materials management is a fundamental concept which brings together the responsibility for determining the manufacturing requirement; scheduling the manufacturing processes and procuring; storing and dispensing materials. As such it is concerned with and controls all activities involved in the acquisition and use of all materials employed in the production of finished goods. Materials management concepts enhance communication and coordination by bringing together all functions which are interrelated. Bose (2007) explained that supply chain coordination improves all stages of the chain taking actions that together increase total supply chain profits. Supply chain coordination requires each stage of the supply chain to take into account the impact its actions have on other stages. Lack of coordination occurs either because different stages of the supply chain have objectives that conflict or because information moving between stages is delayed and distorted.

Dobler and Burt (1996) postulates that materials management provides an integrated system approach to the coordination of materials activities and the total material costs. They view it as something that advocates assigning to a single operating department all major activities, which contribute to the cost of materials. The objective is to optimize performance of materials systems, as opposed to sub-optimizing the performance of individual operating units that are part of the material system. Chase et al. (2009) contend that the objective of materials management is to ensure that the right item is at the right place, at the right time and at a reasonable cost. The intention of having materials management system in place is for solving materials problems from a total company view point (optimize) by coordinating performance of the various materials flow. Fearon et al. (1989) suggested that the introduction of computers was a great boost to the adoption of materials management, as materials function has many common databases.

Furthermore, been it in the developing or developed world materials management is a process for planning, executing and controlling field and office activities in an organisation. The goal of materials management is to insure that construction materials are available at their point of use when needed. The materials management system attempts to insure that the right quality and quantity of materials are appropriately selected, purchased, delivered and handled on site in a timely manner and at a reasonable cost. Materials management is the system for planning and controlling all of the efforts necessary to ensure that the correct quality and quantity of materials are properly specified in a timely manner, are obtained at a reasonable cost and most importantly are available at the point of use when required.

In Australia with much improvement being realized on the part of, e-informing: Gathering and distributing purchasing information both from and to internal and external parties using Internet technology, e-market sites: Expands on Web-based ERP to open up value chains. More so buying communities can access preferred suppliers’ products and services, add to shopping carts, create requisition, and seek approval, receipt purchase orders and process electronic invoices with integration to suppliers’ supply chains and buyers’ financial systems (Jessop, 2006).

In the context of Africa, Ibegbulem and Okorie (2005) assert that over the years, the majority of organisation in Nigeria and especially in the study area are faced with the problem of having the required level of materials such as raw materials which they need in order to effectively engage in production of goods and services to satisfy the market demands for such products and services. This inability to effectively manage the flow of materials from the external environment into the company could be attributed to several reason ranging from management inefficiency in management of the supply chain for the products, inadequate working capital, harsh business environment among other factors.

According to Okoro (2019) to ensure an effective material management in a organisation, the holistic installation and maintenance of an inventory control system which is a system that include all the chain from purchasing to warehousing. For an effective material management, stock valuation is paramount in determining the inherent worth of company’s share. Most company’s fail in material management because of the inability to manage lead time (Okoro, 2019). Thus, the initiation of inventory purchase and the time it gets delivered to the organisation is a huge determinant of the productivity of an organisation which is the actual output of the organisation measured against it intended output time (Okoro, 2019).

In Kenya, there are some organisations that have successfully embraced the use of e-procurement technology. For instance Nation Media group through their digital platform commonly known as N-Soko enables their clients to purchase products online (Gitahi, 2011). According to Awino (2011), most of the SCM strategies of large manufacturing firms in Kenya are not owned by individual firms but also other organisations within the SC that provide the required linkages towards the overall corporate performance of the manufacturing industry ( Awino, 2011).

 Cameroon as a member of central African Community procures additional construction materials from the member states. Logistics is the process of planning, implementing and controlling procedures for the efficient and effective transportation and storage of goods including services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements and includes inbound, outbound, internal and external movements. (Lambert & Stock, 2008). Logistics management is a supply chain management component that is used to meet customer demands through the planning, control and implementation of the effective movement and storage of related information, goods and services from origin to destination. Logistics management helps companies reduce expenses and enhance customer service. Furthermore, There is high competition for construction materials within the region. For instance, cement from Cameroon is a big competitor Cameroonian cement manufacture. According to Cameroon Ministry of Trade and Industry Report (2019), among the contractors, the major competitors are local companies (57%), Chinese companies (29%) and the Ndangote cement industries (14%). Competition challenges are mainly due to lack of machines to improve quality and quantity of production (40%), limited access to markets (20%), and lower prices offered by competitors (20%) (Carver & Nash, 2009).

1.2 Statement of the Problem

Dobler and Burt (2016) postulates that material management provides an integrated system approach to the coordination of material activities and the total material costs. They view it as something that advocates assigning to a single operating department all major activities which contribute to the cost of materials. The objective is to optimize performance of material systems, as opposed to sub-optimizing the performance of individual operating units that are part of the material system. Chase et al. (2011) contend that the objective of materials management is to ensure that the right item is at the right place, at the right time and at a reasonable cost. The intention of having material management system in place is for solving materials problems from a total company point of view by coordinating performance of the various materials flow.

The productivity of Guinness company will be greatly affected if the management of the company does not pay special attention to material planning in the company. This is because, this is the lifeblood that holds the various components of manufacturing in any organisation together and ensure that it will have all the necessary items needed to carry out its day to day activities. Successful implementation of material panning in an organisation leads to reduction in duplication of functions, improvement in delivery of materials among other benefits (Chary, 2015). However, Guinness companies suffer from several instances of project failure attributed to poor material planning, project delays occur due to transport delays, poor storage facilities and also inadequate purchasing procedures, these problems are manifested in projects in form of poor initial planning.

Poor material sourcing techniques adopted in Guinness project implementation has contributed to the increase number of abandoned project due to transport management problem which diversely affect the cost and the price of the material. Kioko 2014 on the other hand reported that material mismanagement has affected negatively on the completion of Guinness objectives or goals. It is important to establish a relationship between storage and transport processes. The overall effects of poor material sourcing attributes could significantly lead to increase time and cost overruns and poor quality for the objectives of Guinness. it is therefore against the above problem that the study seeks to investigate the effect of material management on organisation productivity in Guinness Company

1.3. Research Question

1.3.1 Main Research Question

The main research question of this study is; what is the effect of material management in an organisational productivity in Guinness Company Mile 3 Bamenda?

1.3.2 Specific Research questions

1. How does material plaining affect an organizational productivity in Guinness company?
2. Does material storage affect organizational productivity in Guinness company?
3. How does material sourcing affect an organizational productivity in Guinness company?

1.4 Research Objective

1.4.1 Main Research Objective

The main objective of the study was to access the effect of material management in an organisational productivity with the case of Guinness Company Mile 3 Bamenda.

1.4.2 Specific Objectives of the Study

1. To investigate the effect of material planning in an organsational productivity with the case of Guinness Company.
2. To examine the effect of material storage in an organisational productivity with the case of Guinness Company
3. To determine the effect of material sourcingin an organisatioal productivity with the case of Guiness Company