Corporate profitability through effective management of materials, the case

European Journal of Business and Management
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.29, 2013

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Corporate Profitability through Effective Management of
Materials, the Case of Flour Mills Company Lagos
E. E. Inyang
Department of Accounting Federal University Wukari, Taraba State, Nigeria
Email: kizitoinyang@yahoo.com
F. B. INYANG,
Department of Accounting, Cross River University of Technology calabar, Nigeria
Glory Basil
Marketing Department University of Calabar, Nigeria.
ABSTRACT
One of the problems facing manufacturing company in Nigeria is the growing trend towards the higher cost of
materials and services and frequent short down of factory, which erode business profit. The paper focuses on
how business firm can attain corporate profitability through effective management of materials. The objective of
this study was to examine the relationship between material management and corporate profitability of
manufacturing firms .The empirical analysis focused on the Flour Mills Company Plc. Lagos; being one of
largest manufacturing firms in Nigeria. Data was collected through a structured questionnaire, supported by
interview. Using the sequence (x2) test of independence, the results provided evidence of a positive significant
relationship between effective material management and corporate profitability. The implication of this is that
through effective management of materials, a manufacturing firm can achieve significant cost saving,
improvement in production efficiency, and increase in profitability. The study also found that inter-departmental
coordination, effective inventory management, good relationship with vendors, and state of the art facilities/ICT
were significant success factor of material management. This study shared that for manufacturing companies to
experience remarkable success in their performance, priority must be given to management of materials as a total
concept.
Keywords: Materials requirements planning, material wastage, profitability,
INTRODUCTION
Materials are the lifeblood and heart of any manufacturing system (Lee et al, 1977). They represent the
major component of manufacturing cost and profitability. No industry can operate without them. They must be
made available at the right price, at the right quantity, in the right place and at the right time in order to coordinate and schedule the production activity in an integrative way of an industrial undertaking. The
accumulation of, and need for materials in the form of inventories, is a significant variable for managers to
concentrate on, monitor and control.
Materials are simply industrial goods that become part of and their physical product. In manufacturing
companies, a high proportion of operational expenditure is expended on materials (Oniwon, 2011).
In the cost structure of most of the products manufactured, the cost of materials exceeds 50% of the
total cost (Ramaknisha, 2005). Such a large investment requires considerate planning and control of materials so
as to minimize wastage which invariably affects the performance of organizations. A manufacturing firm will
remain shaky if materials are under stocked, overstocked or in any way poorly managed (Banjoko, 2000). This
points to the need for proper budgeting and controls on cost of materials. The various types of materials to be
managed in any organization include purchased materials, work-in-process (WIP) materials and finished goods
(Banjoko, 2000). Ogbadu (2009) identified basic price, purchasing costs inventory carrying cost, transportation
cost, materials handling cost, office cost, packing cost, marketing cost, obsolescence and wastages as the various
cost involved in these materials. Thus, the management of these materials so as to reduce the costs associated is
what the study refers to as materials management.
Materials management encompasses all operations management functions from purchasing of raw
materials through the production processes to the final delivery of the end products. It brings together under one
management responsibility for determining the manufacturing requirement scheduling the manufacturing
processes and procuring, storing and dispensing materials (Wild, 1995, Ondiek, 2009).

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An integrated approach to materials management defines it as “the functions responsible for the
coordination of planning, sourcing, purchasing, moving, storing and controlling materials in an optimum manner
so as to provide a predetermined service to the customer at a minimum cost” (Ramakrishna, 2005;
Gopalakrishnan and Sundaresan, 2006). International Federation of Purchasing and Materials Management
(IFPMM) defined it as a total concept having its definite organization to plan and control all types of materials, it
supply, and its flow from raw stage to finished stage so as to deliver the product to customer as per his
requirements in time. These definitions provide the scope of materials management which includes Materials
Requirements Planning (MRP), decision on purchasing, procurement of materials, inventory management,
staffing, stores and warehouse management, production, and distribution of finished goods at minimum cost at
due time (Osotimehin, 2006; Monday, 2008; Ogbadu, 2009).
Materials management is a tool to optimize performance in meeting customer service requirements at
the same time adding to profitability by minimizing costs and making the best use of available resources. The
basic objective of materials management is explained by Banjoko (2000) and Jacobs et al (2009) is to ensure that
the right item is bought and made available to the manufacturing operations at the right time, at the right place
and at the lowest possible cost. They stressed that without adequate planning for material resources, the overall
performance of an organization may be crippled. Barker (1989) articulated that improvement in continuity of
supplies with reduced lead times, reduction in inventories with reduced obsolescence and surplus, improvement
in cooperation and communications with reduced duplication of effort, reduction in materials costs, improvement
in quality control, improvement in status control, and quicker identification of problems are the main benefits of
materials management in organizations.
In the earlier years, materials management was treated as a cost centre, since purchasing department
was spending money on materials while store was holding huge inventory of materials, blocking money and
space (Ramakrishna, 2005). However, with the process of liberation and opening up of global economy, there
has been a drastic change in the business environment, resulting in manufacturing organizations exposed to
intense competition in the market place. The manufacturing companies’ worldwide has been forced to work out
various strategies to face the challenges and to cut down manufacturing costs to remain competitive. As noted by
Ramakrishna, (2005), progressive management has since recognized that materials manufacturing can provide
opportunities to reduce manufacturing costs and can be treated as a profit centre.
Today, there are dramatic evolutions in the market environment and every organization strives to keep
itself in business. Major competition has shifted from the market to the production floor where manufacturing
costs can be cut down and profitability boosted for firms to compete favourably. Backed by advanced
technology, firms are closely monitoring their manufacturing costs and embarking on efficient management of
materials (Ondiek, 2009). Fearon et al. (1988) see the introduction of computers as a great boost to the adoption
of materials management, as materials functions have many common databases. Therefore, efficient materials
management is fundamental to the survival of business, industry and economy.
Businesses in the Nigerian manufacturing sector have tottered over the years due to lack of adequate
management commitment to timely funding of materials procurement coupled with unethical practices of some
executives (Oba, 2008). According to a survey carried out in 2010 by the Manufacturing Association of Nigeria
(MAN)., 834 manufacturing companies have shut down their operations in 2009 across the country due to
manufacturing costs created by exorbitant price of raw materials and non-availability among other reasons
(Adeloye, 2010). The few surviving manufacturing firms are faced with stiff competition in the current markets.
This has led to the need for coming up with better method of managing and measuring how material resources
are utilized by various jobs or products, and therefore be able to eliminate any wastage in the value chain. Thus,
this study became inevitable in view of the developing and changing nature of the Nigerian economy given the
extra environment; economy, political, changes in technological development, government regulations, multiple
taxation, environmental degradation, and reduction in quality of raw materials as a result of re-cycling and stiffer
competition.
Previous researchers (Whybark and William, 1986; Evan et al., 1987; Ramakrishna, 2005; Ogbadu,
2009; Ondiek, 2009) have shown that materials account for more than fifty percent of the annual turnover in the
manufacturing firms. This shows clearly that priority should be given to management should no longer be
viewed as a drain-pipe, but as a serious stabilizing and economic growth potential factor. Unfortunately, few
studies exist yet on the corporate profitability through effective materials management on the performance of
manufacturing firms for a developing economy as Nigeria. This study intends to fill this gap. This paper
examines the relationship between materials management and corporate profitability of manufacturing firm in
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Nigerian using the chi-square (X2) test of independence. The empirical analysis focused on Flour Mills
Company Plc.
STATEMENT OF THE PROBLEM
In recent times Flour Mills Company Lagos has suffered from inefficient and imprudent management of
resources and product scarcity, which has resulted in invaluable economic and social losses to the society. On the
surface, this scarcity has been attributed to shutdowns and break-down at the company due largely to lack of
smooth maintenance activities in the plant, which is brought about by the unavailability to replacement of parts,
which should have been provided by the materials management department.
The function of the materials management department is very important especially in view of the
difficulties associated with the purchase of equipment spares, which in most cases are foreign-sourced.
Frequently, the materials management department has been accused for the frequent breakdown and
shutdowns as a result of its inability to provide the necessary spares as at when they are need.
HYPOTHESIS
Ho: there is no significant relationship between materials manage problems and the frequent breakdown
and shutdown of the plant.
OBJECTIVES OF MATERIALS MANAGEMENT
To support the company operation with an uninterrupted flow of materials and services. This can be
achieved through detailed planning of the supply of materials, parts and components so that they are
brought together at the right time.
To reduce transportation cost of moving materials by making decisions on route to follow, the means of
transportation to use.
To provide information service for controlling the distribution of products, production management,
instruction, manufacturing, and other background production information.
To have better control of quality of company’s product and to provide required level of customer
services. This can be done by maintaining favorable relationship with suppliers’ consistency of quality.
THEORETICAL FRAMEWORK
Profit is usually what is left after all the costs have been removed from the accrued revenue from sales.
Therefore, profit is a controllable factor to the extent that management can control his revenue through price on
one hand through costs on the other hand.
Low level of marketing profitability in Nigeria would not be unexpected given the rates at which costs
rise. Profit, of course, represents the balance from revenue after all costs has been deducted. Rise in costs are
threats to profits especially where the marginal increase in cost are not easily passed to on the consumer and
where cost minimization strategies are not deliberately pursued as means of reducing total cost, which will
inform improve profitability (Weinbery, 1989).
However, the focus of this paper is achieving profitability through effective management of materials
with emphasis on procurement, receipt of materials, holding and carrying costs, inventory control, traffic and
management of spare parts.
RELATIONSHIP
DEPARTMENTS

BETWEEN

MATERIALS

MANAGEMENT

DEPARTMENT

AND

OTHER

Materials management department plays a vital role in an organization and it has relationship with other
departments. These relationships vary from department to department (Lemu, 2007). The departments that are
mostly involved are; production, engineering design, quality control, marketing, finance and personnel
department (Zanto, 2008) materials management and production department materials management is
responsible for the purchase of all materials needed by the production department, and the storage and issuance
of these materials. Production department makes requisition to materials management department of the

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materials needed. Materials management department raises a local purchase order for such materials (Rihinde,
2005).
MATERIALS MANAGEMENT AND ENGINEERING DESIGN DEPARTMENT
In order to achieve the major objective of the organization, these two departments should cooperate on
matter concerning production design, preparation of specification for the materials, parts and components. They
should equally cooperate in the area of value analysis/engineering and standardization of materials. Materials
management may make useful suggestions of substitute materials that may cost less to the engineering
department at the production design stage.
Material management and quality control department. In assurance of product quality, it is very important
that the two departments cooperate and relay useful information to each other. According to Marta (2008) quality
control department usually inform materials management on the best method to be applied to incoming materials
and also the criteria for acceptance and rejection of materials that are substandard. Quality control can equally
advise materials management on condition under which some items should be stored to avoid deterioration in
quality.
MATERIAL MANAGEMENT AND MARKETING DEPARTMENT
Materials management and marketing department should cooperate in ensuring the profitability to the
organization. Materials management ability to obtain the right quality materials at the lowest possible cost, will
enable marketing maintain competitive advantage. Consequently there will be increased sales and profit.
Marketing department is in position to report back to the materials management department on the customer’s
reaction to the quality of product as a feedback.
MATERIALS MANAGEMENT AND PERSONNEL DEPARTMENT
Both departments cooperate on matters relating to recruitment, training, motivation, promotion and
development of staff in the materials managements. Personnel department advises materials management
department on the company’s personnel policies, wages and fringe benefits. On the other hand, materials
management is responsible for the procurement of stationary and office needs of the personnel department.
ACHIEVING PROFITABILITY THROUGH MATERIALS MANAGEMENT
Effective management of materials contributes a great dal to achieving business profit. This is done
through effecting acquisition, control, handling and movement of materials. The major contributions of materials
management to profitability are discussed below;
A decision to make or buy
A manufacturing company should be able to make product decision between buying raw materials and
producing them. If this decision is done very well it can contribute to cost reduction and profitability will
increase. According to Ogbadu (2009), many factors have to be considered when arriving at make or buy
decision. Factors in favour of buying raw materials include;
When it is cheaper to do so.
Quantities required are too small for economic production.
Spread of financial risk between customers and suppliers.
When sources of supply can no longer be guaranteed on the other hand, the decision to produce raw
materials can increase profitability when carried out under these circumstances.
Chance to use up idle capacity and resources.
Possibility of search utilization.
Greater purchasing power with large orders of a particular material.
Ability to manage resources.

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INVENTORY CONTROL
Lysons (1996) posits that inventory control enhance profitability by reducing costs associated with
storage and handling of materials. Inventory control is means by which materials of the right quality and quantity
are made available as when required with due regards to the economy of shortages, ordering cost, purchase price
and working capital.
Inventory control determines the extent of stock holding of materials. It equally makes it possible for
material manager to carryout accurate and efficient operation of the manufacturing organization through
decoupling of individual segment of the total operation and it entails the process of assessing of stock into the
storehouse and the issue stock.
Materials control has to do with standard control on the ordering size, ordering time, and the quantities
of raw materials left in the store at a time, for profitability and cost reduction, manager must therefore, maintain
an optimum level of stock at all time. Too much stock and too little stock must be avoided. According to Buffa
and Salim 1987; 100 there are several reasons for keeping inventory. These include protection against variations
in demand, maintaining smooth flow of production by providing a decoupling function between stages of
production and lowering total material cost by taking advantage of quantity discounts. On the other hand,
shortage of material can lead to interruption of products for sales; customer relations are hurt, while machine and
equipment becomes underutilized. Therefore, a company can only realize substantial savings by using a rational
procedure for inventory control.
METHODOLOGY
Data in this study was obtained through structured questionnaires supported with interview from the
sample of a case study of flour mills Lagos. A case study approach was adopted since it successfully enhances
the understanding of complex issues and can further anchor what has been previously known, while emphasizing
detailed contextual analyses of limited conditions and their relationships (Dooley, 2002).
Flour mills is an integral part of the Nigerian manufacturing sector with outstanding reputation as the
largest flour company producer in Nigerian and the fourth largest in Africa (Meristem Research, 2008). Over the
years its production capacity has grown and it presently has grown and it presently has 13 production facilities,
over 80 distribution warehouses and over 200,000 sales outlets nationwide (Equity Research, 2008). Besides,
driven by a culture of passion for quality, the organization’s history is steeped in a tradition of bringing quality
products to the Nigerian market. For flour mills, the mission statement is “Quality is more than just something
we taste or see or measure or manage. Anything less than 100% quality is unaccepted”.
This study employed judgemental sampling, and the purchasing, production, quality control and
warehouse/store departments were selected as they deal directly with materials: procurement, processing,
checking and storage respectively. The population of these four departments was 135. The sample size was
determined using the Slovin’s formula (Serakan, 1992 cited in Dionco-Adetayo, 2011):
n

=

N ___
1 + Ne2
(1)
Where n is the sample size, N is the population size, and ‘e’ is the margin of error. Applying 5% error
margin, the sample size of the study was 100 members of staff, of which 25 were randomly selected from each
department.
Materials management brings about reduction in material wastage (Donald, 1975). In this study,
efficient materials management was measured by the rate of material wastage, while business success was
measured by the firm profitability – profit after tax, PAT (Collier, 1995). The study employed descriptive and
inferential statistics to show the relationship between efficient materials management and profitability as well as
the organizational factors that promote materials management in the company. The descriptive statistics include
percentage the weighted mean, while the inferential was the Chi-square test statistic given by:
X2 = ∑(fo – fe)2
Fe

(2)

Where fo is the observed frequencies, and fe is the expected which is obtained as:

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fe =

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r t x ct
gt

(3)

At a level of significance, with (r – 1)(c – 1) degree of freedom (df). (r1 = row total; ct = column total and gt =
grand total).
To as the strength of the relationship of the between efficient materials management and firm profitability,
Cramer’s V was employed.
_____ X2_____
(N) (df smaller)

Cramer’s V =

(4)

RESULTS AND DISCUSSIONS
Out of a total of one hundred (100) copies of the questionnaires that were administered to the staff of
the materials-related departments as stipulated in the methodology, 92 copies were correctly filled and returned
resulting in a high response rate of 92%. The analysis of this study was based on the retrieved copies of the
questionnaire.
Examining the relationship materials management and corporate profitability of the company, the Chisquare statistic showed that there is a positive and significant relationship between efficient materials
management and firm profitability (Tables 1 and 2). This implies that efficient materials management has
contributed positively to the growth in profit of the company.
The result is in line with the report of the Equity Research (2008) where the profit of NBC increased by over one
hundred percent in 2007. In a similar study conducted by Ogbadu (2009), the found that inefficient materials
management significantly contributed to materials wastage and breakdown of the Benue Brewery plant. The
effect size of the relationship between efficient materials management and profitability in this study is on high
side (Cramer’s V = 0.5). This confirmed a very strong relationship. Information gathered through the interview
revealed that the restructuring embarked upon in terms of acquiring state-of-the-art facilities, and proper
management of inventory aided by professionalism, has actually reduced the rate of materials wastage and
increased profitability.
Table 1: contingency table for the observed frequencies of materials wastage rate and profitability
Profitability
Increased

Decreased

Unchanged

Total

Low

47

8

13

68

High

5

12

7

24

Total

52

20

20

92

Source: Research survey, 2008
Table 2: contingency table for the observed and expected frequencies
fo
fo
fo – fo
47
38.4
8
14.8
13
14.8
5
13.6
12
5.2
7
5.2
Source: Author’s computation, 2008

8.6
-6.8
-1.8
-8.6
6.8
1.8

72

(fo – fo)2
73.96
46.24
3.24
73.96
46.24
3.24

(fo – fo)2
fo
1.93
3.12
0.22
5.44
8.89
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Using equations (2), (3) and (4), we obtain the calculated Chi-square and phi values
X2cal = ∑(fo – fo)2 = 20.22
fo
Determining the critical X2 from the tables at 5% level of significance:
X2tal = X2a (r – 1)(c – 1) = X20.05 (2) = 5.99 and
Cramer’s V =

_____ X2_____ = 0.5
(N) (df smaller)

Apart from reduction in materials wastage rate and increase in profitability of the firm, almost all the
respondents admitted that materials management results in minimization of customer’s complaints and reduction
and return rates. It helps the organization to sustain its quality standard.
Considering the factors that promote efficient materials management in flour Mills Company, all the
respondents indicated that inventory management, inter-departmental coordination, training, good relationship
with vendors, R & D in materials management, state-of-the-art facilities/ICT and professionalism were the major
factors (Table 3). Inventory management is the most important function of materials management and it forms
the nerve centre in any organization (Ramakrishna, 2005; Adeyemi and Salami, 2010). Majority of the
respondents (60%) admitted that inventory management has highly contributed to the efficiency of materials
management in the company. a high mean value of 2.02 confirmed the result. Based on the interview, the
company operates just-in-time, buffer stock and lot-for-lot types of inventory system.
Just-In-Time (JIT) system emphasizes the production or delivery of precisely the required amount of
materials at the right time and precisely where needed. Thus, the usually wasteful practice of ordering and
receiving or storing materials many weeks or months before they are actually needed is avoided. The beauty of
this system is that materials are ordered and the receipt of such materials is scheduled to arrive on hand just
immediately before the commencement of production. Buffer stock, on its part, is the minimum stock of safety
stock kept to meet emergencies, unexpected increase in demand or errors in forecasting the leading time (Asaolu
and Nassar, 2007). As the name implies, the lot-for-lot order quantity generates orders equivalent to the size of
the order. Thus, for a firm to minimize its total inventory cost, it should order for same lot forecast whenever the
need to order arises. These inventory systems minimize inventory holding costs and wastage.
In most manufacturing companies, a fundamental problem is that purchasing, production planning and
control, warehouse and distribution, tend to be developed mainly in independent compartments which
consequently results in an insular, restricting and uneconomic approach (Barker, 1989). To boost the success of
manufacturing firms there is the need for interdepartmental coordination among these materials related
departments. What then is needed is a philosophy of integrated professionalism. Staff cannot operate well unless
they appreciate the needs and problems of colleagues in interrelated functions. Such awareness cannot by itself
produce desired results. These are achieved by each function translating awareness into action and all staff
working as a team to achieve corporate objectives (Barker, 1989). Managing materials must be viewed as a total
concept, which is in balance with other major functions such as marketing, sales, production, engineering,
finance and personnel (Ogbadu, 2009). Materials management requires the right blend of technical and
commercial expertise operating within the framework of an appropriate and good organizational structure if it is
to provide the efficient and effective service demanded of it. In this study, over 60 percent of the respondents
admitted that interdepartmental coordination among materials related departments is a highly significant factor
of efficient materials management in flour mills company Lagos. A mean value of 2.58 confirmed the existence
of a high interdepartmental coordination which was aided by professionalism (interview response).
Professionalism is considered very important for efficient materials management, a view shared by
reports from similar studies (Barker, 1989; Ogbadu, 2009; Ondiek, 2009; Oniwon, 2011). A high proportion of
the respondents (82%) acknowledge professionalism as critical success factor of efficient materials management
in flour mills. Most of the heads of departments or units were found to be professional in their functional areas
with certification in professional bodies such as certified institute of warehousing and materials management
(CIWM), chartered institute of purchasing and supply management of Nigeria (CIKPSIMN), amongst others.
This was in addition of their academic qualifications, of which none of them had first degree of higher national
diploma.

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The analysis further showed that majority of the respondents indicated that good relationship with
vendors (63%) and the deployment of state-of-art facilities (88%) highly contributed to efficient materials
management in flour mills (Table 3). Ogbadu (2009) identified poor relationship with vendors as a major
materials management problem which could result in the breakdown of manufacturing plant. From the interview,
the company recently acquired a new state-of-art can filling and packaging line in order to boost materials
management and consequently, enhance its performance. Moreover, the company enormously employ
information and communication technologies (ICT) especially in material requirements planning (MRP) – a
computer-based information system for ordering, scheduling and controlling of inventory level so that an
organization does not under-stock nor overstock itself, and to better order priority planning for the various items
needed in the assembly of the final products.

Table 3: Key factor promoting management in flour mills Plc.
Degree (N = 92
Response
State-of-the-art facilities/ICT
Professionalism
Inter-departmental coordination
Good relationship with vendors
Inventory management
Trainin in materials management
R&D in materials management
High significance, xw > 2.00

High
n
81
75
61
58
42
23
16

Moderate
%
88
82
66
63
45
25
17

n
11
17
23
25
19
20
22

Low
%
12
18
25
27
21
22
24

Not at all
n
0
0
8
9
22
37
49

x
w

%
0
0
9
10
24
40
53

n
0
0
0
0
9
12
5

%
0
0
0
0
10
13
6

Source: research survey, 2008
Staff training and R & D in materials management recorded low contributions to efficient materials
management in the company. About half of the respondents admitted that the company’s commitment to staff
training and R & D in materials management was rather very low. This is not surprising as studies by Ilorin et al.
(2000) and Egbetokun et al. (2007) revealed that commitment to R & D in Ningerian manufacturing companies
is very low as compared with companies in developed nations. Training will effective develop skills of personnel
in materials management. The R & D in materials management brings about innovation in product design
(technological innovation), new product development, and development of new sources of supply at competitive
way. As one of the interviewee stated:
“…Had the company had a separate materials management department, the issue the training
of materials management personnel and conducting R & D in materials management would
not have been a challenge. In developed countries, almost all large-scale manufacturing firms
have separate materials management departments, so an organization like ours should not be
an exception”.
A number of national research institutes such as the National Centre for Technology Management
(NACETEM) and the Materials Research and Development Council (RMRDC), as well as private institute like
prudent materials management consultancy and services Nig. Ltd., and the chartered institute of purchasing and
supply management of Nigeria (CIPSMN) have the capacity of such training and R & D in materials
management. The management of flour mills plc would do well to network with such organizations as the
significance of training and R & D in materials management cannot be overemphasized in the light of business
success.
CONCLUSION AND RECOMMENDATION
Although out intention is not to generalize from this study, but nonetheless, we provide useful insight to
the future prospects of the Nigerian manufacturing industries if materials management is given priority as a total
concept. This study established that there is a positive and significant relationship between efficient corporate
profitability management of materials, and organization can achieve significant cost saving, improvement in
74

2.88
2.82
2.58
2.53
2.02
1.59
1.53

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production efficiency, and increase in profitability and competitiveness. Among the factors that positively
influence materials management, effective inventory management, inter-departmental coordination, staff
training, good relationship with vendors, R & D in materials management, state-of-the-art facilities/ICT and
professionalism were found to be the key factors. However, like most Nigerian manufacturing firms, the
company was weak in training and R & D in materials management which calls for special attention.
Based on the findings, it is inevitable to provide recommendations to the management of flour mills and
other manufacturing firms on how to boost corporate profitability of materials management in Nigerian
manufacturing industries.
I.

II.

III.

IV.
V.

Manufacturing firms in Nigeria are encouraged to increase their resource commitment to staff training
and R & D in materials management so as to develop skills, update knowledge, enhance new product
development and create indigenous source of supply for foreign materials.
Materials management department should be established to effectively shoulder the responsibilities of
sending or organizing training programmes for materials management personnel as well as performing
R & D in materials management. The materials management department helps to support the
management of an organization in the production activities. It also helps in the marketing, sales
promotion and control of all the types of materials for its quantity, quality and cost.
Quality consciousness through capability surveillance (i.e. constant touch with suppliers’ plant/factory
to ensure manufacturing conforms to product specification and quality) should be strongly advocated.
This practice is necessitated by the problems associated with specifications – failure of the
manufacturer or supplier to seek clarifications or specifications using the order confirmation method in
the manufacturing process.
Materials management policy should be initiated in order to promote quality consciousness.
Professionalism should be encouraged at all levels of a manufacturing organization. It should not be
restricted to top management or management staff.

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