CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Material management can be defined as a process that coordinates planning, assessing the requirement, sourcing, purchasing, transporting, storing and controlling of materials, minimizing the wastage and optimizing the profitability by reducing cost of material. Baldva (1997) noted that Materials management is a process for planning, executing and controlling field and office activities in Manufacturing. While Eduardo (2002) viewed Materials management as the system for planning and controlling all of the efforts necessary to ensure that the correct quality and quantity of materials are properly specified in a timely manner, are obtained at a reasonable cost and most importantly are available at the point of use when required. 

According to Khyomesh and Chetna, (2011) Building materials account for 60 to 70 percent of direct cost of a project or a facility, the remaining 30 to 40 percent being the labour cost. Therefore, efficient procurement and handling of material represent a key role in the successful completion of the work. It is important for the project manager to consider that there may be significant difference in the date that the material was requested or date when the purchase order was made, and the time at which the material will be delivered. These delays can occur if the contractor needs a large quantity of material that the supplier is not able to produce at that time or by any other factors beyond his control. Chan (2002) noted that the project manager should always consider that procurement of materials is a potential cause for delay. The management of Manufacturing processes to reduce, reuse, recycle and effectively dispose of wastes has a serious bearing on the final cost, quality, time and impact of the project on the environment. (Dania, 2007)

The goal of materials management is to ensure that Manufacturing raw materials are available at their point of use when needed. The materials management system attempts to ensure that the right quality and quantity of materials are appropriately selected, purchased, delivered and handled on site in a timely manner and at a reasonable cost, (khyomesh and chetna 2011). The scope of materials waste is vast, and this waste occurs in the industry irrespective of the size of the building firm, instructions about handling, storage and stacking are not provided with the goods or sent in advance to the site (Abdulazeez, 2000).

Materials management in Manufacturing is also regarded as the efficient use of goods and equipment before, during and upon completion of a building process. Petra (2013) observed that Successful materials management requires the participation of all persons involved in a Manufacturing process. For Materials may deteriorate during storage or get stolen unless special care is taken. Delays and extras expenses may be incurred if materials required for particular activities are unavailable. Ensuring a timely flow of materials is an important concern of material management (Shah, 1993).

Thus, Materials management is an important element in project management. Materials represent a major expense in Manufacturing, so minimizing procurement costs improves opportunities for reducing the overall project costs. Poor materials management can result in increased costs during Manufacturing. On the other hand, efficient management of materials can result in substantial savings in project costs. If materials are purchased too early, capital may be held up and interest charges incurred on the excess inventory of materials (Wendy, 2006).

Johnston (2001) opined that Material Management is divided between head office and site in major Manufacturing companies. The selection, pricing, ordering, preparation of schedules and payment accounts are dealt with at head office, learning the receipt storage, protection and use of materials to management on site. Due to the high cost of materials, if not properly managed during the period of execution of contract can lead to abandonment of project.

In his submission, lan (2008), opined that the rate at which materials are been squandered on site due to poor management is getting too rampant in our society and if not curbed, it can jeopardize the future of our Manufacturing industry. This is particularly true in view of the fact that mismanagement of Manufacturing resources (i.e materials, plants and labour) affects the continuity and profit margin of such project and if not checked can lead to technical insolvency or bankruptcy.

Therefore, attention must be paid to how materials are been procured, stored and managed in order to achieve perfect work, effective handling of materials, right usage of materials and control of Manufacturing resources.

This, explain the reason why Johnston (2001), noted that Materials management begins with planning and estimation, these can be achieved through proper site co-ordination measure of reducing wastes, the location and security of materials on sites, procurement of quality materials as being specified and effective administration of site together with quality control.

Lee and Donald (2001), observed that the problem associated with the absence of proper materials management on Manufacturing site could be wastage of resources making contract cost more than budget sum, reduction of profit margin of the contractor ineffectiveness of project handlings reduction of output e.t.c. and if these are not properly taken care of it might be disastrous to the firm.

No Manufacturing project can commence and proved effective without an adequate supply of raw materials, apart from the careful planning of materials required by the builder, it is to his advantage to foster a good relationship with the suppliers, many of whom will have been selected due to their fulfillment of orders to the standard required and meeting of delivery times over a number of years (Pheng and Chuan, 2001).

Besides the builder’s own suppliers, the architect may specify that a certain supplier must be used and these are termed “nominated supplier” whatever the type of suppliers to be used, the information passed to them and receive from them is the same and in all but in the smallest firms this information and document will pass through the buyer. (Yang, et al., 2003).The buyer must also ensure that the architect receives any samples from the suppliers in the very early stage of contract procedure to satisfy him of the relative merits of the material. It may, for example, not be possible to obtain the specified material in time in conjunction with the building programme, but by obtaining samples of similar products the architect may decide on a new form of Manufacturing or design to prevent hold ups.