Monday 15 January 2018

THE IMPACT OF STORE DESIGN AND MATERIAL HANDLING ON COST REDUCTION IN THE NIGERIAN AIR FORCEv

CHAPTER ONE
INTRODUCTION
1.1   Background of the Study
Material handling is an essential and significant component of any productive activity. It is something that goes on in every plant all the time. It is simply picking up, moving, and lying down of materials through manufacture. It applies to the movement of raw materials, parts in process, finished goods, packing materials, and disposal of scraps. In general, hundreds and thousands tons of materials are handled daily requiring the use of large amount of manpower while the movement of materials takes place from one processing area to another or from one department to another department of the plant. The cost of material handling contributes significantly to the total cost of manufacturing.

Hassan (2009) stated that “material handling goes beyond just the automated and manual movement of material to include ensuring that they are in good condition, delivered on time and most importantly efficiently.” Michael (2012) Material handling (MH) involves “short-distance movement that usually takes place within the confines of a building such as a plant or a warehouse and between a building and a transportation agency.” Thus, the importance of material management lies in the fact that any significant contribution made by the materials manager in reducing material cost will go a long way in reducing production cost and improving the profitability and the rate of return on investment. Issues and disposal function will require proper guidance, regulation and control so that materials are arranged in such a manner as to enable easy storage, minimize pilferages proper identification and quick retrievals, with minimum waste of time and effort. . Today, materials are the livelihood of any industry, no industry can operate without them, and they must be made available at the proper time, in proper quality, at the proper place and at the proper price. Khanna and Sarup (2005) posit that “it has been estimated that average material handling cost, is roughly 20% to 65% of the  total production cost and the ratio between the weight of handled material to produce an item and the weight of the finished item may vary between 40 to 50.” “Many storage and handling activities are repetitive, so careful management can produce substantial economies and customer service improvement over time” (Ballou, 2004).

Design of a store house depends on the materials movement pattern and the limited type of handling equipment that can be used. This result in fact that most customers demand for goods and services within and outside the organization are incremental in nature as they opt for speedy, convenient and reliable delivery of materials and service. . “It is true that store function is a major cost centre which makes use of 70-75% annual budget of the firm (Dangana 2005).”

The main objective behind the store function is to render services to the users. But in today modern socio-technical design, this service is hindered by many constraints. For this reason, store location and layout must be considered and job analysis must be done for the personnel involved to discharge their duties in an effective manner. It is important that store should be design in such a way that it will give proper protection of the store items and to appropriately handled with appropriate handling equipment in order to ensure smooth running of the store activity and safety handling.

The researcher believed that with proper store design and material handling will enhance organizational productivity, efficiency and it will minimized  wastage and ensure effective flow of material in the organization under study.

1.2   Statement of the Problems
Proper store design and effective material handling is very important not because material consist of about 60 percent of the organization’s running cost but because of its role in an overall objective of the organization. Poor store design and poor material handling can result to the following problem, which forms the basis of this research work. It could result in staff accident, material damage, refunding in stock life of material, high cost of maintenance, scarcity of material, increase in cost  of operation, environmental destruction, shut down of plant and machinery,  water pollution, fire outbreak, effect on health and hazard, hinder in organization overall objective especially profit that stand as a back bone of the organization.

However, organizations are faced with various problems to design a storehouse. Some of these problems may include; construction cost, cost of installation, cost of land, rate levied upon the new building by local authority and cost of survey, planning designing. Other problems may also include cost of materials handling i.e (equipment needed to load and off load materials and also for transporting materials), cost of storage equipment needed, and payment to building contact and for other incidental cost.  

Thus, there is always the need to effectively manage materials in order to curtail the amount of waste and also enhance maximum utilization in such organizations. This particularly calls for effective materials handling and maintaining a standard in the cost of production. Effective material handling and its prime function is a matter of ensuring that sufficient materials are retained in the store to meet all requirement without carrying unnecessary large stock or too little to ensure efficiency and productivity in 333 Log Gp.
Now that store operation is beginning to receive attention of those in authority, the necessity to actively coordinate these activities for better performance to create more impact and subsequently more recognition cannot be over emphasized.   

The researcher also gathers that there has been negligence of the store department and sometime brought under unrelated department which result in poor performance. This scenario depicts the existence of material handling deficiencies in the area of planning, replenishment, recording and inventory control which effect profitability in the organization.

1.3   Objective of the Study
The rationale for this study is to examine critically the application and to understand the impact of store design and material handling which deals with the inflow and out flow of materials into organization, and its effect on operational and economic performance .
This study is specifically designed to:
i.        To determine the impact of store design and material handling on cost reduction.
ii.       To identify problems associated with store design and material handling.
iii.      To provide necessary solution to those problems.
iv.      To suggest strategies for effective coordination and management of material handling system

1.4   Significance of the Study
The research work is carried out to be of benefit to individual, organizations and the society in general. Thus the significance of the study are:
Similarly the research work has been undertaken to broaden the knowledge of the researcher and the society on how effective store design and material handling can contribute to the survival and profit level of an organization with particular reference to Nigerian Airforce. Therefore the project will highlight the benefit which Nigerian Airforce and other organization stand to gain if they employ and apply a good  store design and a right material handling system manned by qualified and trained professionals.

To the entire populace, that come across this research work, the research work will provide them with the knowledge on the important store design and material handling is to an organization and it will also add value to their knowledge. Also it is part of the pre-requisite for the award of Post Graduate Diploma (PGD) in Logistics and Supply Chain Management. 

The project work will be beneficial to subsequent researcher who will want to undertake a research into similar or related fields of study as it will provide them with relevant information on the subject matter.

1.5         Research Questions
To measure the impact of store design and material handling to the efficiency of Nigerian Airforce, the researcher has drawn up some research questions which are:
i.                   What are the impact of store design and material handling on cost reduction?
ii.                 What are the problems associated with store design and material handling on cost reduction programmed?
iii.              What are the necessary solutions to those problems?
iv.              What are the strategies for effective coordination and management of material handling system?

1.6         Scope of the study
This study examines store design and material handling and their impact on cost reduction of 333 Log Gp which is located at Nigerian Air force Base, Kaduna. The research population will comprise of 30 Engineering Wing, 35 Engineering Wing, 36 Engineering Wing and 37 materials System Wing. The sample size will be selected from the population under study. Related text books will also be consulted.

1.7     Plan of the study
The synopsis presents all the relevant chapters of this research work and their contents. Chapter one covers general introduction, background to the study, statement of the research problem, objective of the study, significance of the study, research question/hypothesis, scope of the study. Chapter two covers literature review and the theoretical framework. Chapter three covers research methodology. Chapter four covers data presentation and analysis. Chapter five contains summary of findings, conclusion and recommendations.