Material Utilization System In Manufacturing Enterprise

MATERIAL UTILIZATION SYSTEM IN MANUFACTURING ENTERPRISE. (A CASE STUDY OF ASABA TEXTILE MILL LIMITED ASABA)

Source and Nature of Raw Material

Amongst other material used by Bendel Textile Mill, Asaba are cotton list, chemical and dyestuff.They are either sourced locally or are imported.

The cotton link is got in its raw from and the process starts from the below room, where the raw cotton is put in the bale opener.

Wound cotton in pirns can also be ordered from use from other textile industries like the General Cotton mill (G.C.M) Onitsha.

The chemicals and dyestuff are all received in their raw state. The mixture is carried out in the mill by the colour mixers.

  • Raw Material: These are orders that have been received. It includes cottons, chemicals (dyes) etc.
  • Work in Progress: These are “a” above that has been acted upon. In this case study Bendel Textile mill. Asaba the work in progress of one department and or the output of such constitute the input of another. For example, Beam, the output of the spinning department forms the input of the weaving department and which has baft as its output and which constitutes the input of the processing department.
  • Supplies: These are materials for office use and for repairs e.g. Bin cards, store Ledger cards, fulscap sheets, screws, shuttles, Donnie etc.
    • PLANNING MATERIAL REQUIREMENT:

Material cost is one of the largest elements of costs. Therefore, great emphasis should be laid on its control.

However, in planning requirement, all modern techniques should be exploited particularly in the areas of quantity, of quality prices and other incidental as: –

  1. Interest on Capital tied up in stock in keeping a large quantity of stock, if the money was lent from the bank or elsewhere, long and over storage may cause a huge financial loss as the interest on capital accrued.
  2. Insurance premium against fire and other pevilis:-  This reduces gambling on luck makes a company to be assurancely doubly sure of remaining a going concern in the event of uncertainty.
  • Storage Cost: – These are items of cost incurred due to storage e.g. rent rate and wages of storemen.
  1. Deterioration: – This is spoilage due to long and over storage of stock.
  2. Pilferage – and protection from such
  3. Obsolesce: – This means as a result of technological development.
    • MATERIAL UTILIZATION: – Viewed from the angle of cost efficiency in the use of material is of paramount importance. Management should amidst other things give priority to the following to enhance the utilization of material
  4. Avoidance of production hold-up: These are unpredetermined hold ups in the flow of production it cold emanate from the following.
  5. Power Failure:- In the processing or finishing department, in the event of a power failure during measuring or bleaching, t he material got looked up at the joints and could cause enormous wastage.

Also, if there is a power failure lasting for a very long period when there is no water in the box for washing, all the in puts under process turn a waste.

Solution: Management should endeavour to provide a stand-by plant (generator) and a water tank to avoid ceasure in the continuous flow of water, which weakens materials.

Also in printing, the rotary printing machine prints from inside to outside. The serener are made of nickels and in the event of a power failure when there is no water in reserve, there is always a souengy pipe produced. This causes wastage.

Solution: provision of standby plant, (generator) a water tank and in most cases stitching beackgrey to the material to be used and printing the  till the colour got exhausted.

  1. Mechanical faults: – These are faults arising from major and minor machine demachanization. This should be minimized as much as possible as it causes huge loss it proper care is not taken in dying, the Naphtol (material for printing) either as or ASG got spoilt during the process.
  2. Making full use of the method study so that the best method is selected for manufacturing the saleable products.
  3. Workers should be given adequate and proper training and should be indeed to use the best method. The training of workers actually calls for greater efficiency. Therefore, every opportunity should be harnessed to train a worker for ultimate efficiency.
  4. There should be din extent a sound standard costing:- this encourages a systematic approaches. That should be a method study and time study. The method is a form recommended by the British standard institutes (B S 3138, 1959). F W Taylor created time study for efficiency. F and Lynda Gilbreth created motion study. It entails the selection of the optimal method rather than the fastest or the cheapest method.
  5. Merit Rating: This allows for a difference in performance between employees who are working in similar jobs and therefore earn, the same wages. Emphasis is laid on employees attendance, co-operation, quality of work and initiative.
  6. Store should be in position that is readily accessible from any part of the company and as near to the road railway, siding, and wharf and as much as possible to minimize breakage and cost of unloading. Bulky and heavy stores should be stored as near as possible to the department requiring them. It should be noted that handling cost only adds to the cost of raw material without adding to its value.
  7. Colour tags should he used:- this is much more active in deteriorating material and supplies to indicate which should be used first.
  8. Training and retaining of trainees.
  9. Mixture of material: Shortage of a material component should bot bring a hold- up in production. Efforts should be geared towards utilizing other substitutes e.g. standard mix to produce 100 gallons of z

Material A: 40 gallons at  10       4

Material B: 40 gallons at  15     6

Material C: 20  gallons at 20      4

Cost of standard mixture 100 = 14

Assuming that raw material A is in short supply.

Material A: 10  gallons at  . 10 1

Material B: 60  gallons at   .15  9

Material C: 20  gallons at   .20  4

Cost of mix   100                        14

  • Need for material utilization:

The effective and efficient utilization of materials would among other things give rise to the following

  1. Minimization of production Cost per unit: Cost of the sum of the applicable expenditure and charges directly incurred in bringing an article to its existing is condition and location.

In a production department: the processing department of the textile industry where steam is required for fixation and fastening of colour to avoid bleeding, a service will be needed of such steam. In a business operating standard costing this service will be charged to the production department at the standard cost of the amount of service used. Excess inefficiency in the utilization of such a service could go a long way to reducing the price per unit and this opens the chance of acquiring a fair market share.

  • Maintenance of a standard quality of material.

The importance of efficiency and stability of quality of a product cannot be over- emphasized. To achieve this end required skill and expertise. Therefore it requires the training and retraining of employees e.g. in a manufacturing of textile, a scrap of 10% of production is normally allowed. It the weight of finished component is 21b and the component (material) required for a particular order is 1000, the storekeeper should issue 1,000 x 21b = 2000 1b to cover the basic requirement and 10% of 2000 (2001b) to cover the normal scrap. All efforts should be geared towards returns of materials to store from the issues for any favourable variance.

  • Reduction of waste: As a result of inefficient production method or unskilled employees, every avenue for increased efficiency in production should be harnessed employees should be given adequate training. Also interdepartmental transfer and employees resignation should be controlled.

However, in the case of Bendel Textile Mill Ltd. effort is being made to reduce waste by utilizing waste materials. E.g. In sweeping up or hand dropped cotton. Also the waste coming out from sliver as all sent back to the below room from new laps.

2.4     Organizational Responsibility for Material Utilization

Material, which embraces stock and work –in progress, comprises of a great Varity of items. Raw material, partly finished components, finished product consumables, tools maintenance spares parts etc. is the responsibility of store manager.

However, responsibility can only be given where there is authority over receipt, issue and storage. Manager’s are assigned the responsibility for specific stock maintained e.g. tools or maintenance store is under the supervision of t he chief engineer. Finished goods store comes under the close supervisor of the marketing manager.

Nevertheless, the cost of material is one of the largest elements of cost. Therefore no reliance can be placed on costing records if the condition under which materials are stored for utilization are not under strict control. For greater efficiency in the utilization of materials, it behalves on every manager in their respective concern to see that carelessness, damage, deterioration and pilferage in the use of materials are reduced to the barest minimum.

  • General Stores: This is where all materials except partly finished and finished products are kept, tool and maintenance spares parts, stationers etc. The site of the general store should e in position readily accessible from any part of the factory for issues. Also for the receipt of material, it should be sited closer to the road railways siding or wharf to minimize the cost of unloading. The near site of store for the storage of cotton is as near as possible to the spinning department and the finished goods store is sited near the entrance gate for easy evacuation of goods.
  • Subsidiary Stores: These stores are sited in all the production departments e.g. the spinning, maintenance weaving maintenance and the finished maintenance. They are stored with different materials as required by such departments, suppliers are made from the general stores and each subsidiary manager accounts to general stores officer for proper and efficient utilization of material.
  • Merits of Keeping A General Store:
  1. it saves cost as total order are made for the total requirement of the mill
  2. It aids fewer stock records thereby saves staff and stationary, less        recording error and promotes staff specialization.
  • It aids a better supervision.

 

 

  • The Organization of Stores:

The importance of a well-structured store cannot be over stressed. The layout of store should receive attention for a proper utilization of material and space. In Bendel Textile mill ltd. (BTM) the following steps were considered for efficiency.

  1. The use of racks and shelves: shelves were constructed in coaches. Heavy items of stock are stored in the first coach, items frequently used. E.g. stationers and have difficulty in handling are kept near the entrance as easy as possible. The aids are at every point in time cleared for proper movement of folk –lift trucks in and out of the store.
  2. Receiving materials: When materials are received into the mill e.g. cottons, dyestuff, chemicals and tools they are first of all entered on a goods inward sheet and inspected on the spot for a sound certification. The receipt material is graded and all grades are entered on a bin card. The numbers on the bin cards also appear on the rack fore east allocation and identification.
  3. Coding of materials: Coding is a system of symbol designed to be applied to a classified set of items”. The coding system in the mill is alphanumerical e.g. o3b, o3c for materials with slight difference.

MERITS OF CODING:

  1. Economy of spaces, it saves space in writing out requisitions, reports and    other forms.
  2. It saves time in writing out requisition and report.
  3. It aids confidentiality of material where secrecy is necessary
  4. It is indispensable in areas of computer and punched card accounting.
  5. Issues of material: Material issues to production are purely based on authorized requisition. The head of the department appends to the requisition form or supervisor under them as the case may be.
    • THE PURCHASING POLICY OF THE MILL:

The Bendel Textile mill Ltd, Asaba (BTM) has a system of centralized purchasing policy of raw materials when stock is approaching the minimum stock level, the purchasing officer who on confirmation informs the officers for the placement of an order.

For a new order quotations are required from lead-time and grades: a supplier is chosen. Then the company raises a local purchase order (L.P.O) to be finally signed by the general manager for a supply.

However, this centralized purchasing procedure could be waived in the event of specialized purchases e.g. the purchasing departments are only made aware of the intention to purchases

The chief engineer or any other authorized subordinate after the authorization of the general manager proceeds to purchase the item mostly where bulk purchases are not required to cell for quotation requisition.

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