MATERIALS MANAGEMENT PRACTICES AND OPERATIONAL PERFORMANCE OF SELECTED QUOTED FOOD, BEVERAGES AND BREWERIES FIRMS IN SOUTHWESTERN NIGERIA

Abstract

During and immediately after the industrial revolution, organisations regarded Materials Management (MM) activity as a cost center and drainpipe (Ramakrishna, 2005). On the contrary, Song et al. (2006) stated that the majority of firms attain savings amounting to between 50% - 60% of total costs from MM. Ondiek (2009) reported that MM has become a critical competitive tool for firms. This study, therefore, examined Materials Management Practices (MMP) adopted by selected quoted Food, Beverages, and Breweries (FBB) firms in Southwestern Nigeria (SWN); it also evaluated the effect on firms’ operational performance and identified challenges they face in the adoption. These were with a view to providing information on MMP that enhances the operational performance of the firm. Primary data were generated through a structured thematic questionnaire responded to by 234 management and executive employees of 13 out of the 33 FBB in South Western Nigeria (SWN). The respondents were purposively selected from the production, purchasing, quality control, warehouse/store, and finance departments because of their direct involvement in the handling of materials. Data collected were analysed using frequency tables, weighted mean, standard deviation, and multiple regression statistical tools. The study revealed that MMP adopted by FBB in SWN includes materials handling (84%), materials cost control (82.8%), procurement (80%), materials planning (78.8%), and inventory management (75.2%). The study results showed that the model was statistically significant (F=38.52, p=0.000) and that MMP has a significant effect on the operational performance of the firm. The coefficient of explanatory variables from the regression that indicated significant effects are material handling (t=7.156, p=0.000), procurement (t=2.146, p=0.000), and material planning (t=2.118, p=0.000).Challenges of the adoption of MMP include an inadequate power supply (88%), the poor transportation system (86%), lack of trained personnel (84%), poor relationship with vendors (78%), poor information technology (76%), and use of ineffective codes (70%). The study concluded that R² = 0.541 value is an indication that as the challenges to MMP adoption are overcome, the FBB firms will exhibit better operational performance.