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.