Material Handling And Firm Performance

1.0                                                         INTRODUCTION

• Background to the Study

In the current exceedingly aggressive worldwide commercial environment, the weight on firms to discover better approaches to convey value to their clients is becoming ever challenging. The expanding requirement for industry to offer items in a worldwide market based on cost and quality has generated the need to implement more productive warehousing methodologies. Material handling has come to be perceived as an unmistakable crucial with the operation of large-scale manufacturing firms. Material handling comes before processing of completed products held for distribution to customers (Coyle, Bardi, and Langley, 2014). Material handling with is essential hubs in a supply chain network as it perform important functions that help the development of materials, handling items, deamassing vehicle loads, making stock keeping unit combinations and gathering materials for shipments purposes (Langevin & Diana, 2015). The effective material dealing in the stores ensures optimal production and dissemination complete products with main objective of cost decrease and firm performance improvement. According to Ibegbulem and Okorie (2015), meeting what customers need and expect while setting objectives is of significant importance. To that end, having a continuous production schedule plays a greater role. This largely gets done by optimal materials handling which is considered the business activity that works with having a plan for buying, receiving, handling, storing, and delivering of materials for consumption in production with an effective control measure. It is clear that the material, which are industrial goods, is considered as a source of another physical product (Ashby & Johnson, 2013). The managing of these materials is referred to as materials handling.  Krishnan (2001) provided a definition of materials handling; materials handling is referred to all tasks, assignments, and routines that are connected with transferring outer materials and services into the organization. This is carried out until they are utilized and consumed through production and operation or sales. Ibegbulem and Okorie (2015) point out that materials handling has been broadened to include all activities which have connection with gaining, handling and control, and movement/process of materials and supplies consumed in the production for a company’s final product.

The prime aim of materials handling, as explained by Chioma and Etifit (2018); Jacobs, Chase, and Aquilano, (2009), is to make sure that the necessary products are available at the right place and at the right time with the possibility of the cheapest price. Chioma and Etifit (2018), were of the opinion that inadequate planning for material resources will damage the overall performance of organizations. Ibegbulem and Okorie (2015) and Barker (1989) identified several factors through which an organization can reap benefits from material handling. These include improvement in continuity of supplies with shortened lead times, decrease in inventories with reduced uselessness and surplus. They also emphasized the improvement in communications and cooperation with reduced repetition of effort, reduction in materials costs, improvement in quality control, improvement in status control. Most importantly, having a proper way to identify issues on time is vital for originations in order to maximize their benefits from materials handling (Barker, 1989; Ibegbulem & Okorie, 2015). Thus, the optimal materials handling is a tool to optimize the efficiency of organization performance in terms of improving defective product reduction skills by facilitating a shorter operating cycle, reducing handling costs, eliminating unproductive handling of materials, reducing idle machine capacity, and eliminating factory hazards (Jeruto, Keitany & Richu, 2014). All this, in turn, enables optimum usage of space and maintains the quality of materials toward enhancing overall production efficiency in terms of better production of quality products in a timely manner, while at the same time facilitating meeting customer service requirements, adding to enhance the profitability by reducing costs and finding the best way to use available resources (Pemberton, 2016).

Nigeria manufacturing firms have understood the advantages of embracing great materials handling administration and are taking keen interest regarding materials administration since survival of any firm relies upon how well their expenses are overseen (Ondieki, 2014). Nevertheless, most Nigerian manufacturing firms are not applying refined methods of materials handling in comparison to resources spent on acquisition and maintenance of materials in various firms. The issues experienced in material administration include absence of adaptability, entrusting a great deal of delicate material exercises to one office and absence of all around coordinated database to help data stream on materials (Wanjogu, Iravo & Arani, 2015). The various types of materials to be managed in any organization include purchased materials, work-in-progress (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 costs involved in these materials. Thus, the management of these materials so as to reduce the costs associated is what we refers to as materials handling.