The Role of Materials Management in the Financial Performance of a Manufacturing Organization Case Study: East African Breweries Limited

Topics: Supply chain management, Manufacturing, Supply chain Pages: 6 (1503 words) Published: August 14, 2013
The role of materials management in the financial performance of a manufacturing organization Case study: East African Breweries Limited

A research Proposal submitted to the Faculty of Business Administration and Management

April 2013
Supervisor: Mrs. Lillian Walusimbi

In this chapter, the researcher will talk about the background to the study, statement of the problem that reflects the case study, hypothesis clearly stating in summary what the research hopes to achieve, scope and justification of the study, conceptual framework and definition of terms and concepts. 1.2 BACKGROUND OF THE STUDY

Arnold, Chapman and Clive (2008) define materials Management as planning and controlling the flow of materials through the manufacturing process. They add that this is mainly done through production planning, implementation and control, as well as Inventory Management where raw materials are kept for production and finished goods are kept for dispatch to selling centers. In simple terms, materials management refers to all efforts to get the right quality and quantity of materials supply at the right time and place for the right cost. This applies to materials supplies into, within and out of the organisation.

Availability of materials is a key component for manufacturing firms because they need a constant flow of raw materials to produce finished goods and also need to have a steady flow of the finished goods available to their consumers. Materials management activities in an organization are aimed at providing a buffer against the differences in demand rates and production rates at all times.

The manufacturing industry in Uganda is still small and most consumer products are just imported as finished goods. However, this sector is growing at a very fast rate and has seen several manufacturers setting up shop in recent years. Even those firms that have been in production activity for several years have seen their production levels grow tremendously. They use a combination of locally sourced inputs and imported materials to produce for the growing market.

At such levels of production, materials management has to be properly implemented to achieve efficiency and constant production of adequate volumes for consumption. The failure of most local manufacturing firms in the country to embrace modern material s management practices has led to noticeable issues like constant stock outs of their products in retail outlets, reduced quality of production, failure to produce to capacity and increased wastage of excess materials that are not used in time.

East African Breweries Limited is the region’s largest alcohol beverage company and has subsidiaries all over the East African region. In Uganda, they acquired Uganda Breweries Limited and manufacture a variety of beer and spirit brands that include: Bell Lager, Pilsner, Tusker Malt, Uganda Waragi, etc. Uganda Breweries Limited has been a leading brewer in Uganda since 1946 and their major operations are located in Port Bell, Luzira on the outskirts of Kampala although they have a distribution network that covers the entire country and neighboring countries. Over the years, the brewery has seen constant modernization and expansion.

Modern Materials Management is not yet widely adopted by all manufacturing firms in Uganda because most businesses view it as an extra cost that will add to their already high costs of production. Of course adopting modern materials management activities would not come cheap since it involves among others hiring skilled professional staff, purchase of modern technology, construction of modern stores and other relevant infrastructure. In recent times, due to the global financial crisis, every firm around the world is aiming at cutting on their operation...
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