A Survey of the Organization for Materials Management in the Kenyan Manufacturing Firms

Abstract

Materials plays a big part in the manufacturing firms as it account for about 56% of the annual turnover. This research intend to analyse the attention and recognition the Kenyan manufacturing firms are giving to the materials management and whether Kenyan firms are practising the current materials management philosophies. The motivation of the study was the fact that long-term success and survival of any organisation especially in a turbulent environment, like the one that is currently is experienced in Kenya, depends entirely on how well organisation are managing their costs .Secondly, the fact that currently companies are competing though cost reduction. The study was a survey of medium and large manufacturing firms based in Nairobi. The data was collected using a structured questionnaire consisting mainly of close-ended questions and some few open-ended questions. The data was collected between 22nd May 2000 and 31st July 2000. From a list of manufacturing firm's obtained from Kenya Industrial Research and Development Institute (KIRDI) directory of 1997, the researcher developed a sampling frame (See Appendix C). Out of the list, which is containing firms of all sizes, only medium and large firms were selected for the study. The main objective of this study was to determine the kind of attention and recognition the Kenyan manufacturing firms are giving to material management. Besides, the following secondary objectives were investigated: i) To find out the proportion of annual turnover organizations spend on materials and materials related costs. ii) To establish the kind of organization structures existing for materials management. iii) To establish the usage of material management (MM) concept in the Kenyan manufacturing firms. iv) To establish benefits realised and problems encoutered by the manufacturing organisation which have implemented materials management concept. (v)A sample size of 55 respondents was used in the study. The data collected was presented using tables. Data collected was analysed using descriptive statistics. Proportions, percentages, median and mean were used for analysing the data. The major findings were: The Kenyan manufacturing firms are spending an average of 56% of their annual turnover on materials and materials related cost. Regarding attention and recognition given to materials management, the Kenyan firms have not given a lot of attention to materials functions. The number of firms (23%) showed this where the incharge of materials was reporting directly to the chief executive officer. Concerning the existence of a specific department for material functions, it was found that more large firms had departments dealing with materials as compared to medium firms. The indication was that large firms had more materials to manage and hence saw the need for a department. It was found that several Kenyan firms were applying materials management concept although only very few applied it knowingly. Majority of the firms had their material functions performed by purchasing managers, general manager and production managers . For the firms that had implemented the material management concept the benefits they expected and actually realised were: improvement in quality of inputs, reduction in conflict regarding material functions, quick response, better co-ordination, optimal stock level, stable manufacturing schedules and effective and efficient information flow. It was also realised from the research that many organizations did not want to accept the inefficiencies in their system and therefore did not see any need for improvement. The problems encountered by the material management approach were lack of flexibility, entrusting a lot of sensitive activities to one department and lack of well-integrated database to support information flow. The conclusion drawn from the research was that Kenyan firms were not practising professionalism in materials management and that materials management was more suited for large firms. Recommendations made were that, owing to the large sum of money companies were spending on materials and material related activities, a lot of emphasis and attention needed to be given to materials management. Materials management needs to be recognised as a top management function.