EFFECT OF MATERIAL HANDLING IN A MANUFACTURING ORGANIZATION (A CASE STUDY OF MAX ALMIMIUM INDUSTRY, OWERRI)
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Abstract
Table Of Content
Approval Page:
Dedication:
Acknowledgement:
Abstract:
Table of ContentChapter One:
1.0 Introduction
1.1 Background of the study
1.2 Statement of the problem
1.3 Objectives of the study
1.4 Research questions
1.5 Statement of hypothesis
1.6 Significance of study
1.7 Scope of the study and Limitation of study
1.8 Definition of terms
Chapter Two
2.0 Literature review
2.1 Material flow
2.2 Elements and characteristics of a material handling system
2.3 Problem and intervention description
2.4 Situation prior to the intervention change motivators
2.5 The changes and the situation after the implementation material management
2.6 Need for material management system
2.7 Goals of material management
2.8 Benefits of material management
2.9 Material planning and controlling
2.10 Roles of material management in an organization
Chapter Three:
3.0 Research design and methodology
3.1 Introduction
3.2 Questionnaire design
3.3 Source of data collection
3.4 Population and sample size
3.5 Sampling techniques
3.6 Validity and reliability of instrument
3.7 Method of data analysis
Chapter Four
4.0 Presentation and analysis of data
4.1 Introduction
4.2 Presentation of data
4.3 Analysis of data
4.4 Interpretation of result
Chapter Five
5.0 Summary, conclusion and recommendation
5.1 Introduction
5.2 Summary of findings
5.3 Conclusion
5.4 Recommendation
References
Appendix
Questionnaire
Chapter One
1.1 BACKGROUND OF THE STUDY
Material management is the branch of logistics that deals with the tangible component of supply chain specially, this covers the acquisition of spare parts and replacement quality control of purchasing and ordering such parts, and the standards involved in ordering, shipping and warehousing the said parts. It is the planning, directing, controlling and coordinating those activities which are concerned with material and inventory requirement from the point of their inception to their introduction into the manufacturing process, it begins with the determination of material quality and quantity and ends with its issuance to per the schedule and at the lowest cost. Material management can deal with the tangible components of a supply chain. Specifically this covers the acquisition of spare parts and replacements quality control of purchasing and ordering such parts and the standards involved in ordering shipping and warehousing the said parts. The goal of material management is to provide an unbroken chain of components for production to manufacture goods on time for the customer base. The material department is charged with releasing materials to a supply base, ensuring that the material are delivered on time to the organization using the correct carrier, materials is generally measured by accomplished on time delivery to the customer on time delivery from the supply base, attaining a freight budget, inventory shrink management and inventory accuracy. The material department is also charged with the responsibility of managing new launches. In some companies materials management is also charged with the procurement of materials by establishing and managing a supply base.Other companies the procurement and management of the supply base is the responsibility of a separate department, the purchasing department is their responsibility for the purchase price, variance from the supply base. In large companies with multitudes of customer charges to the final product over the course to the final product over the course of a year these may be a separate logistics department that is responsible for all new acquisition launches and customers changes. This logistics department ensures that the launch material are procured for production and then transfer the responsibility to the plant material management.There are no standard for material management that are practiced from organization to organization. Most companies use Enterprise Resource Planning (ERP) system such as System Applications Products (SAP), Oracle, Business Planning and Control afford. Small concern that do not have or cannot afford EPR system use a form of spread sheet application to management material. Some other construction project use Barcode and Global Positing System (GPS) Material management System like Trackem.
Material Management is not a science and depending upon the relevance and importance the organization officials place upon controlling material flow. The level of expertise changes some companies place materials management on a level whereby there is a logistic director, other companies see the importance level as managing at the plant level by hiring an inventory manager or material manager, and still other companies employ the concept that the supervisors in the plant are responsible accompanied by the planners. Because there are no standard, there is only practices of any particular business sector, that are widely used for example the generation or release to the supply base comes in many forms from the level that requires sending facsimiles and Portable Document Format (PDF) files. The Electronic Data Interchange (EDI) in formation exchange to the ultimate practice of a supplier web base site.
HISTORY OF MAX ALUMINUM INDUSTRY, OWERRI
Max aluminum industry is a private owned enterprise. The company leadership is dynamic and has strong root and experience in commodity processing business with a proven track record of building growth and success. Max Aluminum Industry is named after the tribal name for killer whales, Skana means killer demon, supernatural power, killer whales are known for their intelligence, strength in numbers and swift powerful movement like a killer whale the investor of Skana aluminum company look to move swiftly in numbers to revive a business that can be great asset to the mid west and to wisconsin. With large capital commitment for year one and two the leadership team projects and extensive customer base with the potential for global exports, Max aluminum company continues a long history of aluminum manufacturing in North America and the Wisconsin lakeshore.
This history extends back to the 1900’s with the formation of the aluminum goods manufacturing company and establishment of the branded MIRRO cookware product line in 1918 in 1983 the company was sold to Newell/Rubbermaid and today, lives on as Skana aluminum.
The revitalized company places and emphasis on producing aluminum coil and blanks in the open market the art of aluminum manufacturing is bred in the talented, employee of this community. Incorporated in 2009 Skana’s objective was to purchase, rehabilitate and operate the shuttered rolling mill bringing it back to life. We are continuing the legacy of aluminum manufacturing on the lakeshore by the building a company a community and friends.
1.1.2 FIRST LEADER OF SKANA ALUMINUM COMPANY
Thomas R. Teswedie Snr, utilized his business skills and peoples skills to climb the corporate ladder through sales to chairman and CEO of Schrever Malt Company of Sheboygan Wiscosin, Mr. Testwuide Snr, ran Schreier Malt Company from 1971 until the sale of the company to Cargill in 1988 during his time as the president, chairman and chief executive officer of Schreier Malt Company, Mr. Testwuide Snr, led the company through two major subsidiary purchases of Prairie Malt Ltd of Saskatcheiran, Canada and CUC Malt Ltd of Nanying, China. During his career, Mr. Testwide Snr, has been recognized on an international scale for his business success. In 1994 he was the recipient of Winsconsin manufacturer of the year grand award and in 1996 he was the receipt of outstanding foreign investment Award, Nanjing, China. Mr. Testwuide Snr, has served on various industry, bank and charitable boards of director including, Barley Malt Institute, U.S. Brewer Association, Wisconsin manufacturer and commence security, financial service, bank and St. Nicholas Hospital. Mr. Testwuide Sr was a member of Young Professionals Organization until 1995. Currently, Mr. Testwuide Sr. is active with multiple business organizations including chairman and CEO of Plymouth Foam Products and chairman of the Board of Torginol, Inc as well as others most recently, Mr. Testwuide Sr. led a group of investors to purchase out if receivership and re-commission the Knoening and Vitas Aluminum Company now operating under the name Skana Aluminum Company in Manitowoc Wisconsin. Mr. Testwuide Sr. is serving as the chairman and CEO of the aluminum mill and will return 75-100 jobs to the community during 2010.
1.2 STATEMENT OF PROBLEM
Problem related to managing the flow of materials can be found in every organization the efficient management of materials plays a key role in the successful completion of a project. The control of material is very important and vital subject of every organization and should be handled effectively for the successful completion of a project. Material account for a big part products and project cost. The cost represented by material fluctuates and may compromise between 20-50% of the total project cost and some times more some studies concluded that materials count for around 50-60% of the project cost (Stukhart 2007 and Bernold and Treseler 1991) materials are critical in operations in every industry since unavailability of material can stop production in addition, unavailability of materials when needed can affect productivity, cause delays and possible suspension of activities until the required material is available, it is important for an organization to consider that even for standard materials, there may be significant difference in the data that the materials was requested or data when the purchase order was made and the time in which the material will be delivered. These delays can occur if the quantities needed are large and suppliers is not able to produce those materials a the time or any other factors beyond the control of the organization. The organization should always consider that purchase of material is a potential cause for delay (Willis, 2008). Unavailability of materials is not the only aspect that can cause problem, excessive quantities of materials could also create serious problem to manager. Storage of materials can increase the cost of production and the total cost of any project when these are limited areas available for storage.
The managers have to find other alternative to organize the material until they are needed. Some of the alternatives might require re-handing of materials, which will increase the costs associated with them. Provisions should be taken to handle and organize the material adequately when they are to received, special attention should be given to the flow.
1.3 OBJECTIVES OF THE STUDY
The following are the objectives of the study:
i. Low price to be lowest – includes transportation enhance profit.
ii. High inventory turnover- value of inventory to be low relation to sale reduces storage costs.
iii. Continuity of supply-alternative sources, captive suppliers flexible suppliers.
iv. Low payroll cost- low operating cost of material management personnel
v. Favourable supplier relations-supplier development
vi. New material and product –working closely with design and research department for development of new material and products.
vii. Economic make-buy-coordinating and assisting other department in make-buy decisions.
viii. Standardization-coordinating with design departments in reducing number of items.
ix. Product improvement-contribution towards product improvement by giving appropriate inputs and assisting design department.
x. Inter departmental harmony-success of material management department depends on the success of other departments, items relations are to be harmonious.
Xi Forecast- forecast in terms of prices, availability and general market conditions are to be regularly monitored towards making important business decisions.
1.4 SCOPE OF THE STUDY
The study focuses on the role of materials management of a manufacturing organization focusing attention on Max Aluminum Industry Owerri, the study does not exceed the area of study.
1.5 SIGNIFICANCE OF THE STUDY
Raw material form a critical part of manufacturing as well as service organization, a considerable amount of material handling is done in one from or the other. This movement is either done manually or through an automated process. Throughout material handling process significance safety and health challenges are presented to workers as well as management therefore, manual materials handling ranges from movement of raw materials work in progress finished goods rejected, scraps, packing method of moving packing and storing of material in appropriate and suitable location. The main objectives of material handling are as follows:
– It should be able to determine appropriate distance to be covered.
– Facilitate the reduction in material damage as to improve quality.
– Reducing overall manufacturing time by designing efficient manufacturing movement.
– Improve material flow control
– Creation and encouragement of safe and hazard free work condition.
– Improve productivity and efficiency
– Better utilization of time and equipment
1.6 RESEARCH QUESTION
The following questions are derived the course this study?
i. Effective material handling does it create any room for effective utilization of materials in the stores?
ii. It is not any use of any importance of apply proper documentation of stock inventory in any organization.
iii. Manufacturing being a government body. Which does not operate no profit motive does not require stock control and material management procedure?
1.7 LIMITATION OF THE STUDY
In the course of research work, the researcher had some limitations to carrying out this research work. The major constraints which served as limitations to the study are as follows:
a. Financial limitations: Finance was one of the major constraints due to limited finance the researcher was not able to travel far and wide to gather all information necessary for the research work. Also as a student having much work load which demands for money all served as limitation to the study.
b. Time constraints: The time frame given for the project work was very short. It also affected the researcher’s research work.
c. Lack of information: Lack of information from the respondents also served as limitation. The respondent refuse to give out information to the researcher thinking that the researcher is a government official who is gathering data for the collection of tax in the future.
1.8 DEFINITION OF TERMS
The following terms were defined for the course of this project work:
Inventory management: Inventory means stock of raw materials; semi finished and finished goods maintained by organization.
Inventory control: It means stocking adequate number and kind of stores so that the material are available whenever required, scientific inventory control results in optimal balance.
Raw materials: Material that the organization converts into processed parts this might include parts specifically produced for the organization and parts brought directly off the shelf (i.e. bolt, nuts).
Purchased parts: Parts that organization buy from outside sources (i.e. lower case for a computer).
Work in process: This is a semi finished product found at various stages in production (i.e. assembled mother board).
MRO supplies: Maintenance, repairing and operating supplies used I the manufacturing process but are not part of the financial products.
Bulk Materials: These are materials that are delivered in mass and deposited in container.
Bagged materials: These are materials delivered in bags for ease of handling and controlled use.
Palleted Materials: These are bagged material that are placed in pallets for delivery.
Packaged materials: These are materials that are packaged together to prevent damage during transportation and deterioration when they are stored.
Chapter Five
5.0 INTRODUCTION
5.1 SUMMARY
Handling and storing material involved diverse operation such as hoisting tones of steel with a crane driving a truck loaded with concrete block carrying bags or material manually and stacking palletized bricks or other materials such as drums, barrels, keys and lumber. The efficient handling and storing of material are vital to any industry, in addition to raw materials. These operations provide a continuous flow of parts and assembles through the work place and ensure that materials are available when needed. Unfortunately this improper handling and storing of material often result in costly injuries. Materials management is simply the process by which an organization is supplied with goods and services that it needs to achieve its objectives or buying, storage and movement of materials.Materials management is related to planning, procuring, storing and providing the appropriate material of right time so as to co-ordinate and schedule the production activity in an integrative way for an industrial understanding. Most industries buy materials, transport them into the plant, change the material into parts, assemble parts into finished product, sell and transport the product to the customer. All these activities of purchase of materials manufacture them into the product, supply and sell the product at the market require various types of materials to manage and control their storage, flow and supply at various places. It is only possible by efficient materials management.The materials requirements planning, purchase, inventory planning, storage, inventory control, materials supply, transportation and materials handling are the activities of materials handling are the activities of material management. They will be discussed in details in this chapter. About 20 – 25 years ago, there was cut throat competition in the market to sell the various consumer items manufactured by different industrial undertaking and the availability of materials to manufacture these items was not scarce. Therefore, materials management was not thought to be so important and its separate identity in the organization was not felt. But today it has become an important management activity to streamline production begins, it is necessary to ensure availability of all the types of materials needed for production centers planning purchasing and scheduling and the main function of materials management. It aims at improved productivity. It is used to reduce the cost which increases profitability and streamline the production. Apart from management of proper utilization, the market research and forecasting both for sale of company purchasing of various materials required for producing of various materials required for producing the product are needed at the planning stage purchasing, procurement of materials, transporting storage, inventory control and inspection of materials and goods supplied are also management as routine work materials handling, packaging, warehouse, planning, accounting scrap surplus and obsolete material disposal, finished good safety and carefree the activity managed by the material management department.
5.2 CONCLUSION
Due to constant complaint because of failure in service and also low speed in material transport. The company was motivated to innovate and or improve internal process that could increase the efficiency of service to manufacturing. The basis of the implanted system was the concepts of stock on wheels, practicing materials transport with the aid of a tug internally named “train” the tug pulls the wagons with more load than forklifts (previous system). Maximizing travels and loads through a specific route with the new system implementation, the need to assess its real impact in relation to the expected improvement emerged. From internal customers evaluation there was an increase in overall satisfaction. This increase can be explained by a greater agility (157%) greater reliability in service (33%) and the lower cost (10%) the result identified the significant sub-factors and their impact on the described factors.
Besides internal customer satisfaction improvement which was evidenced by the present study, there was effective improvement in material flow caused by the used of the posed vehicle increased the accuracy of materials delivery time inside the company. Operations becomes safer. The system used was able to evaluate the perceptions of the implemented changes. As well as to identify factors and sub-factors that influenced satisfaction increase these improvement in the company operations resulted in new subsides to perform similar studies. In relation to specific established objectives, changes in materials handing processes at the company were described (first specific objectives) internal material handling flow in manufacturing was evaluated and improvements were made (second specific objectives) and internal customer satisfaction, levels related to the new system were analyzed (third specific objectives) in this way, the present work general objectives was attained to evaluate. In a systematic way the impact of the implemented changes in materials handling management through internal customers and to the studied area.
5.3 RECOMMENDATION
The following recommendation are therefore made from the study, materials handling work should be minimized without sacrificing productivity or the level of service required the operation. The measure of material handling work in flow rate volumes, right or count per unit of time multiplied by distance moved. Simplifying processes by reducing, combining, shortening or eliminating unnecessary moves which reduce work where possible, gravity should be used to move material or to assist in their movement while respecting consideration of safety and the potential for product damage the work principle is implemented best by appropriate layout planning, by locating the production equipment into a physical arrangement corresponding to the flow or work. This arrangement tends to minimize the distance must be traveled by the materials being processed. While making the plan, it should be discussed with the consultant, planners and the person who is going to get the benefit from the plan is to be involved. Large scale materials handling project generally requires a team involving suppliers consultants when appropriate and end user.
Specialist from the management, engineering, computer and information system. Finance and operations, the plan should promote current engineering of product process design, process layout and materials handling methods.
