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MATERIAL CONTROL TECHNIQUES AND OPERATIONS OF MANUFACTURING ORGANIZATIONS IN AKWA IBOM STATE
BACKGROUND OF THE STUDY
Manufacturing Organization: Is a business outfit concerned with the transformation or conversion of inputs raw materials into Demi-Finiahalfoods or finished foods. Manufacturing organizations contribute immediately to the economic development of a nation. Abolu (2004) stated that manufacturing organizations are the backbone of any economy. They provide employment for small seal producers, high quality, products, social amenities; revenue to the government among others for any manufacturing organization to meet its objective efficiently, management of material resource is required.
Material simply means inventories that a business of outfit hold in store for the purpose of production. Umeyi and Obi (2013) saw materials as inventories that are held in store or warehouse by a business outfit at any given time. A manufacturing organization many stock different types of materials. These material include raw-materials, work – in progress, finished goods, products bought for resale and service items spare parts. Materials are the life wire of a manufacturing organization. Usually it represents a substantial part of a manufacturing organization asset particularly working capital Satami and Adeyeni (2010) stated that material control is very important in the operation of a manufacturing organization. Therefore it is sinegna – non to control materials that are held for use in the production line.
Material problem of too great or too small quantities on hand can cause overstocking or production difficulties. The principal goal of inventory control is to balance the conflicting economics of not wanting to hold too much stock thereby having to the guide against the incurring of cost such as storage, spoilage, pilferage and obsolescence and the desire to make items or raw-materials (quality, and quantity) wise available for production so as to avoid the cost of not meeting internal or external demand. Material is the largest item appearing on the asset side of the statement of financial position of any manufacturing organization. Owing to this reason, there is need for the adoption of suitable material control technique in an enterprise.
Material control in the supervision of the purchase, supply, storage and accessibility of stocks to ensure effective and efficient operation.
Ogbo and Ukpere (2014) states that material control involves all activities essential for the procurement, storage, usage and disposal of stock. In operations of manufacturing organization, managers have to stock – up materials when required and utilize available storage space resourcefully so that owner stocking will be avoided.
According to Ibegbulem and Okorie (2015), material control, quality control, stock taking material issues control and establishment of stock levels.
The purchasing function traditionally encompasses the process of buying. It involves determining the need, selecting of vendors suppliers arriving at suitable price, specifying terms and conditions, issuing the contract or order, and following up to ensure proper delivery. Okoronkwo (2003) defined purchasing as that control function responsible for obtaining by purchase, lease or other legal means, equipment, materials, supplies and services items required by an undertaking for use in order to achieve its objectives. For a manufacturing organization to buy the needed quantity of material suitable for quality control technique must be adopted.
In this era of ever-growing competition, it has become absolutely necessary for a business man to keep a continuous match over the quality of the material purchased. Having once bought the material, if the organization feels satisfied with regard to its quality Gupta (2012) stated that quality control is the use of various measures (statistical and non-statistical) in manufacturing and improving quality, standards. One of the ways of controlling materials is stocktaking.
Stocktaking is the systematic process which allow the comparison or checking of actual stock against what is maintained in the stock record card (bin card) on a constant basis. Abobi (2003) stated that stocktaking is whereby a proportion of all stock items are checked at least once in a year.
Materials pricing of issues is an important aspect of material control approach. Material pricing according to Obi and Umeji (2013) is the cost assignment to inventories for the purpose of establishing their current value before using them to the production line.
Economic Order Quantity (EOQ) is a concept used by many manufacturing outfits to establish the must economical amount of invention, to re-order for any item in store. Okoronkmo (2003) stated that the concept of EOQ holds that the appropriate quantity to order is the one that tends to minimize all the cost (ordering and holding costs).
Material represents a considerable part of a production outfits’s asset. If they are purchases in little quantity, there is the possibility that manufacturing organization could be out of stock, thus causing production difficulties. On the other hand, if they are bought in large quality and held in store till when needed, much money could be tied in them, they can as well lose their forms due to various factors such as evaporation, shrinkages and obsolescence. It is upon this background that this study is to be carried out to examine the extent to which material control techniques influence the operations of manufacturing organization in Akwa Ibom state