NEED FOR THE APPLICATION OF COMPUTER SYSTEM IN MATERIALS MANAGEMENT (A CASE STUDY OF NIGERIAN BOTTLING COMPANY PLC OWERRI)
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Abstract
Chapter one embraces the introduction, background of the study, its statements of problems, objectives, significance, research question, hypothesis, scopes and limitation of the study.
Chapter two deals will the literature review and the meaning of computer system, it applications to materials management, the role to computer system, its problems and benefits of computer system in materials management.
Chapter three emphasize on research methodology, introduction, research design, questionnaire, sample and selection of respondents, other methods used, its techniques observation, data source which include the primary and secondary sources and data analysis method.
Chapter four also emphasize on data presentation and analysis, testing of hypothesis, decision rule and discussion on major findings.
Chapter five which is the last chapter of this research work refers to summary, conclusion, and recommendation of the project in a simplest form.
Table Of Content
Dedication
Acknowledgement
Preface
Table of content
List of tables
List of figures
Definition of terms and abbreviationsCHAPTER ONE
INTRODUCTION
1.1 Background of study
1.2 Statement of problems
1.3 Objective of study
1.4 Significance of the study
1.5 Research question
1.6 Hypothesis
1.7 Scope of study
1.8 Limitation of study
CHAPTER TWO
LITERATURE REVIEW
2.1 Meaning of computer system
2.2 The need for the application of computer system in
Materials management
2.3 The role of computer system in material in materials management
2.4 The problems of computer system in material management
2.5 Benefits of computer system in material management
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research design
3.3 Questionnaire design
3.4 Sampling and selection of respondents
3.5 Other methods used
3.5.1 The computer techniques
3.5.2 Observation technique
3.6 Data sources
3.6.1 Primary source
3.6.2 Secondary sources
3.7 Data Analysis method
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 Data presentation
4.2 Data analysis
4.3 Testing of hypothesis
4.4 Decision Rules
4.5 Discussions on major findings
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary
5.2 Conclusion
5.3 Recommendation
Bibliography
Appendix
Chapter One
1.1 BACKGROUND OF STUDY
Some years ago, there has been some controversy about what entails the need for the application of computer system in materials management. The world of computer is basically a friendly one, and no special credential is needed to become part of it. While it\’s true that modern computer system involves complex technologies and theories, their use is becoming easier all the time. Computer have a general purpose nature which makes them endless versatile.
These controversies arose among planner, students\’ material management business executives, top management and lot of more people. Those who recognized the computer system have concluded that it has been in existence since the evolution of man and witnessed a remarkable development of data processing equipment used in aiding the recording, analysis, and reporting of information in the operation of complex business system. Lenders and Fearon (1997:102). To start with the following:
1. Computerization in material management means converting the manual system into a computer system for efficient operations and many procurement organization are now using computer systems. Thousands of requisition are received and processed daily , many requests for quotation are sent out to suppliers, many quotation are received from suppliers and also analyzed and the volume of work involve in materials management is large and require computer system to mark it fast and easier to manage.
2. The application of computer system in materials right is to ensure that the immediate availability of much more complete data for use in making purchase and related materials decision because of its fantastic speed, the computer can supply management with virtually instantaneous reports which right otherwise take an army of clerks weeks or months to prepare and to update. The timeless of such reports enables a materials management executive to manage by exception and to do a more effective and economical job of purchasing and managing the flow of materials throughout the operation in Nigeria bottling company Plc. Owerri plant.1.2 STATEMENT OF PROBLEMS
The basic and critical problems of research are seldom the problem that appears on the surface. It is therefore necessary to probe beneath the surface, in order to find out the nature and gravity of the problems. This is vital and must be done correctly to guide the researcher on what aspect to channel her research work.
Meanwhile, any mistake at the first step will lead to committing first degree error, that is selecting wrong problem and this will result to subsequent mistakes and errors.
Generally, a lot of private and public establishment are yet to recognize the need for the application of computer system in their various company. Lysons (1981:56-57) others includes;
1. There is always high cost in money and effort in installing a computerization system which may produce smaller companies form adopting this type of system.
2. It is always difficult to correct errors when they occur e.g. When the wrong code number is entered on a computer, the computer will reject other correctly completed transaction.
3. It is not as flexible as a manual procedures once a computer has been programmed the routine of operation must be followed since deviations will lead to confusion and mistake.
4. A major breakdown in the computer system could cause choose in the system and in the company\’s operational activities.
5. The application of computer system reduces the number of staff. This reduction in umber of staff results to unemployment and is a big problem particularly n developing companies.
6. Computer systems are only as good as the staff operating them and the data processed and fed into the computer. Badly trained staff or faulty documentation will not be solved by the application of computer system in materials management.
1.3 THE OBJECTIVES OF THE STUDY
This emphasis on the need for the application of computer system in material management and it contribution towards the dynamic business environment as regards full application of computer system as playing strategic role in material management. This take place when all the manual system of performing activities in the materials management are convert to automated systems and all the records that are maintained in the company in
different files will now be stored in disc or tape files that are used by the computer\’s central processing unit (CPU).
It is then imperative to determine the following;
1. To find out whether the view of existing literacy work in any depth exposure has been made in this direction.
2. To conduct an important finding or research into the existing industries and institutions to determine their level of knowledge and shortcomings, with a view of bringing this focus vise-visa the computer system in material management.
3. To explore areas pf computer system which are akin to materials management activities.
4. To improve its application to materials management through the use of real and collected facts.
1.4 SIGNIFICANCE OF THE STUDY
This research intends every organization to gain from it in as much that computer system is concerned. Therefore, computer system are encouraged to be used in the rightly manner. In order to improve and up-data the management activities.
The application of computerization system will improved the method of issuing purchase order, purchase requisition and reduces time wastage, cost and the volume of work involved. it will also constitute in solving the problem of mismanagement in an organization as it will prove room for efficiency and effectiveness.
Furthermore, it is believed that the study will help the company to identify its drawbacks and how to alleviate them which will ultimately contribute to profitability of the organization, thereby reducing number of staff, cost and obsolescence\’s.
This in a not shell will help to expose the student who is prepared to enter into the field, the challenges she is likely to face and what would be her contribution, it will equally help our industries or the company in question. The Nigeria Bottling company PLC Owerri plant and other big companies to utilized the services of computerization system in material management so as to benefit from their contribution profitability and to correct the anomalies cause by the use of \”uninformed generals\” in carrying out management duties.
1.5 THE RESEARCH QUESTIONS
To test the assertion requires collecting responses from a group of question hidden in various parts of the questionnaires; with the following questions;
1. Do your organizations achieve maximum advantage with respect to the application of computer system in operation?
2. Is it true that computerization system reduces cost, time wastage and the volume of work involved?
3. Does the operation of computer system depend on the management policy?
4. What type of sourcing policy does the industry operate?
5. Does the exist organizational structure permit computer system approach?
1.6 HYPOTHESIS
The following research hypothesis will be tested
1. Ho: There is no need for the application of computer system in material management.
Hi: There is need for the application of computer system in material management
2. Ho2: The cost of computerization system in material management system is not a limiting factor and thus discourages firms from the application.
3. Ho2: The cost of computerization material management system is a limiting factor and this encourages firms to apply the system.
1.7 SCOPE OF THE STUDY
The need for the application of computer system in material management is a wide area of study. But this project will focus attention on computerization system in material management as related to Nigeria Bottling Company PLC Owerri plant.
The study embraces all the activities that are involved in the material management in an industry, like stock control, design engineering and other activities which involved in material cost.
More so, the researcher also carried out an in-depth investigation on the reasons why the concept is not being adoption to the fullest, despite the tremendous benefit derived from material management that are computerized.
1.8 LIMITATION OF THE STUDY
while carrying out this research, the researcher was confronted with numerous limitation which include
a. Research Biases: Most respondents although knowing the aim of this research, refused to co-operate. The researcher has to waste some time persuading them to answer one question or the other.
b. Financial constraints: Due to hard economic realities, enough finance that should have allowed a most diversified research was not available.
c. Time constraints: The researcher combined her class work with the research. This made the researcher to experience a very tight schedule. As she had no transport of her own, the problem became even worse.
d. Transportation: Transportation posed a big trait to the project. The researcher wasted much time due to transportation delays thereby getting to the research place very late. At times, interviews arranged will be missed and repeating the journal becomes inevitable.
e. Attitude of Nigerian\’s to research: The tendency of respondents not regarding questionnaire as important, as well as non-challant attitude of people to research in this country led to some questionnaire not been returned some that were returned due to comply to instructions of the research questionnaire. This militated adversely on the progress of the research work.
f. Other factors that limited this work project was the fact that there is scarcity of materials management textbooks by Nigeria authors in this country, even our lecturers. This made reference to the work project very cumbersome.
1.9 DEFINITION OF TERMS
1. Computer system: According to Leenders and Fearoning (1997:102) the analysis of procedures used in performing the purchasing and supply function have been based largely on the use of traditional office equipment and clerical (manual) methods.
The computer is an electronic-mechanical device which has the ability of accepting data (input), processing the data to generate information (outputs), storing the information and retrieving same for further usage under the control of a step-wise set of instruction called the progammes.
2. Data Control: The need for timely and adequate information has led to the development of information system, which is a set of organized procedures which when executed provide information for planning, decision making, and controls in organization.
3. Management control: Anthony defined management control as ensuring that resources are obtained and used effectively and efficiently in the accomplishment of the organization\’s objectives.
4. Electronics funds transfer (EFT): Electronic funds transfer describes a system whereby a computer user can use his computer system to transfer funds. E.g.; Make payment to a supplier or pay salaries in employee\’s bank accounts (E.g.; deposit account to current account) by sending electronic data to his bank.
5. Sourcing: Sourcing according to Baily and Farmer (1979:113) is said to be the identification of suitable sources of supply.
6. Quality: This is seen as the totality of features and characteristics of a product or a service that bears on the ability to satisfy a state or implied needs.
7. Specification: specification according to lee and doubler (1981:48) are detailed description of the material, parts, and components used in making a product.
8. Procurement: This is defined as the acquisition of goods and services by firms, industries, government and their subsidiary agencies such as parastatals. Uzor (2004: page :422)
9. Lead Time: According to Oyeoku (2001:48) defined lead time as the interval between when a need is perceived and the fulfillment of that need.
10. Engineering Process: This means a situation whereby there will be a co-operation between supplier engineering and that of the buying company.
11. Research: A research is a systematic investigation for the purpose of gaining new knowledge. In order words, it is any study that lead to knowledge the person undertaken the research.
12. Hypothesis: Hypothesis is defined as a conjuctural statement which a researcher make ahead of his study and which must be subjected to test to be accepted or rejected
13. Null hypothesis (Ho): Null hypothesis (Ho) is an assertion that the population parameter is not different from what it have been in the pasts. It represent status quo situation or an existing belief use normally assume that the null hypothesis is true until we have sufficient evidient to contrary. (I.e. until the assumption is nullified).
14. Alternative Hypothesis (Ho): Alternative hypothesis specified a population parameter that is different from the status quo. (what has been on the parts)
15. Data: Data is defined as the gathering of information either from primary source or secondary source.
16. Fax machines: This has been the first choice in a large organization that is used to reduce the purchase cycle time and provides an easy, relatively cheep means of achieving the speed, which is essential for survival an growth in the present business environment.
17. Electronic Mail (E-Mail): This is process of the users to transmit messages back and forth within the orgnaizaiton and to external parties.
18. Voice mail: This voice mail terns both parties into receptionists who spend their turn at \”telephone tag\”
19. Research: RE search simple the means an investigation undertaken in order to discover new facts, get additional information, or resolve conflicting ideas of confirms the validity of existing idea. It is also involve an organized process of arriving at dependable solutions to problems through planned and systematic collections, analysis an interpretation of data.
20. Questionnaire: Question is a list of questions to be answered by a group of people especially to get facts or information for a survey. (Advance learners dictionary).
21. Decision Rule: Decision rule is a rule that simplify the condition under which a null hypothesis may be rejected
22. The observation Techniques: This is a fact finding activity deigned to recognized and note facts as they occur.
23. Primary data: This is a data collected by the investigator himself for a particular statistical enquiry.
24. Secondary Data: Secondary data are data taken as second-hand information from figures originally collected by some one else.
25. Acceptance rejoins: The acceptance rejoin is a set of sample value that will lead to the acceptance of it while rejection rejoin is the set of sample value dealing to the rejection of Ho.
Chapter Five
5.0 INTRODUCTION
This is one of the most important parts of the research exercise because from this chapter any interested researcher concerned will quickly glance through without difficulties and to act as a guide in the management of materials. This is why the researcher had carried out a proper evaluation reference to the [problem statement, its solution and objective.
In line with the above established fact, the researcher had deemed it necessary to reasonably draw conclusion, summaries and make some meaningful and suggestive recommendation in this chapter.5.1 SUMMARY
This project work had come to summary at this point in time by emphasizing that computerization system in materials management has contributed much to the profit making of the organization which is \”Nigeria Bottling Company Plc Owerri\”. This is the form of both raw materials that have purchased for use in the operation of the orgnaizaiton.
Chapter Two of this work, which is the literature review is obvious that research had previously been carried out in this area under study so the researcher in this work cited a number of scholars, whose works were reviewed and acknowledged accordingly. However efforts have been made to bring in opinion of authors who have written on the subject matter.
On the other hand investigation into this work were conducted by the use of questionnaires, personal interview, observation and to some extent desk research in chapter three and in chapter four of this work, that is the data collected were presented and analyzed according to the answer given in the questionnaires distributed to a selected sample population.
From the above, the researcher in chapter five having gone through his findings and statement of purpose had deemed it necessary to make useful recommendations and finally draw up conclusion which will help for further research work to ask as tool for the management of material in computerized system.
5.2 CONCLUSION
To conclude this project work, it should be realized that the prime objective of any company if to make profit with a drastic cost reduction. From the investigation carried out in Nigeria bottling company plc Owerri; the problem centered on improving the co-operation and control of the various activities that contributed to the total materials cost.
When the finding was analyzed, it was found out that the organization could have attained effective control of its operating unit. From the stand point of materials control production should definitely be located in the department, because it controls scheduling of production and material management.
The fact that losses from poor computerized system of material management are not seen directly does not occur. It occurs but not so obviously and is even so disastrous com pared to the compared to the conspicuous ones.
5.3 RECOMMENDATION
Having carried out a thorough investigation on Nigeria bottling company plc. Owerri especially the areas relating to material acquisition and management that are in need of computerization system and having analysis my findings the researcher thus,
1. The company should be able to make available sufficient number of computer and related electronic data processing equipment with due regards to facilities for installation and then financing.
2. The bulk of raw materials used in the industry should be controlled by the store department since stocks represents money, it therefore means that any misappropriation will cause losses to the company; stores department should handle material with reasonable care.
3. The company should have a cordial relationship among the functional units because this will go to a long way in contributing toward the corporate objective by reducing cost through effective computerized system in materials management.
4. The company\’s structure of the orgnaizaiton should be re-designed to allow for perfect mateials management type of organizational it is true that Nigeria bottling company plc Owerri, have a computerized materials management department but it is not well structured
The Recommended Orgnaizaiton Structure of Nigeria Bottling Company Plc Owerri Imo State.
5. The company should involve in sophisticated material planning and control for log range material sources and acquisition, taking into consideration the persistent recurring shortages of basic material evident in today\’s economy, which are likely to continue and become more complex in the future.
6. The company should computerize the systems, to enhance speed and accuracy. Other related electronic data processing equipment, should equally be put in place, with due regard to facilities for their installation and subsequent maintenance.
7. The inventory should organize seminar lectures, symposia workshops, conferences fir their material personnel, from time to time. They should equally be trained and re-trained, oriented and re-oriented, in the light of changes in technology and operational methods as a result of growth and development.
