Materials management : an effective tool for optimizing profitability in the Nigerian food and beverage manufacturing industry

Abstract

Materials play a key role in manufacturing firms as it represents the major component of manufacturing cost and profitability. The accumulation of, and need for materials in the form of inventories, is a significant variable for managers to concentrate on, monitor and control. This study therefore examined the effect of Materials Management on the profitability of Nigerian Food and Beverage (F&B) Manufacturing firms using a case study of Nigerian Bottling Company (NBC) Plc. Data was collected through a structured questionnaire, relevant publications and interview with key individuals in the company. The results showed that there was significant increase in the company's profitability as a result of efficient management of materials, which was aided by inter-departmental coordination among materials related departments, inventory management, good relationship with vendors, and state-of-the-art facilities/ICT. However, the major constraints to Materials Management in the company included epileptic public power supply and poor transportation network. This study advocated that priority should be given to Materials Management in F&B Manufacturing Industry in order to achieve significant cost saving, improvement in production efficiency, and increase in profitability and competitiveness. Recommendation was made for government to provide adequate infrastructural supports to boost Materials Management in Nigerian F&B Manufacturing Industry.

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