EFFECT OF MATERIALS MANAGEMENT ON THE PROFITABILITY OF AN ORGANIZATION
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EFFECT OF MATERIALS MANAGEMENT ON THE PROFITABILITY OF AN ORGANIZATION
Chapter one
Introduction: Materials management is a crucial job in manufacturing companies, whether in the service or production industries. Where proper attention is paid to this critical function in an organisation, the outcome is praiseworthy or commendable.
The primary difficulty for material managers nowadays is to ensure a steady supply of materials for manufacturing. There are numerous issues that impede inventory accuracy, resulting in production shortages, premium freight, and frequent inventory modifications.
All materials managers face the same major issues: incorrect bills of materials, inaccurate cycle counts, unreported scrap, shipping errors, receiving errors, and production reporting errors.
Materials managers have worked to figure out how to manage these issues in the manufacturing business sectors since the beginning of the industrial revolution.
Although there are no known solutions for eliminating the aforementioned inventory accuracy barriers, there are best practices for minimising the impact of maintaining an interrupted supply of materials for manufacturing.
One problem for materials managers is to offer timely releases to the supply base. On a scale of worst to best practices, sending releases via facsimile or file is the worst practice, while transmitting releases to the supplier-based website is the best practice.
The issue in communicating releases via facsimile or file is that they can be lost or erroneously interpreted by the supplier’s system, resulting in a stockout.
The issue with transmitting and releasing a system capable of receiving product data. The optimum procedure is to transfer and release items to the same supplier.
1.2 Background of the Study
Materials management is described as the planning, organising, and control of the flow of materials from initial purchase through internal operations to delivery of final items.
According to the aforementioned description, the function of materials management includes procuring supplies, controlling production, and managing inventory.
This comprises receiving, shipping, material handling, counting, inspection, warehousing, and distribution.
Materials management is a field of management that focuses on all aspects of obtaining and managing the tangible inputs and outputs of manufacturing processes.
Material management tasks include procurement, waste disposal, hazardous materials, accountability, quality assurance and control, standard setting, and inventory cataloguing, also known as materials planning.
1.3 Statement of the Problem
Materials handling in industrial organisations is an important component of the production process. Many organisations use a variety of tactics to achieve organisational goals through materials management.
The control of materials handling as it affects Champion Breweries Nigerian Plc is the unavailability of materials in storage, as well as the right reconciliation of potential business losses due to interruptions in production or inability to meet orders with stock handling costs.
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