Materials Management as a Panacea for the Performance of Small and Medium-size Enterprises: Evidence from Kogi State

Abstract

This study focused on the effects of materials management on the performance of SMEs in Kogi State. For this study, the method used was research survey design. The population of the study comprised of the SMEs in food processing and manufacturing industries in the Eastern Senatorial District of Kogi State. A multi-stage sampling was used to select 384 SME owners in Kogi State. Descriptive statistics, Multiple Regression and Ordered Probit Regression were used for analysis. Findings show that material planning and over-stocking of materials have significantly positive effects on profitability of SMEs in Kogi State; while under-Stocking of materials have significantly negative effect on profitability of SMEs in Kogi State. Finding further shows that persistent material under-stocking significantly causes customer’s satisfaction of SMEs in Kogi State to decrease. The study concluded that materials management is critical to the achievement of desired performance of SMEs. It was recommended that SME owners should engage in effective material planning and keep over-stocking of materials moderate. The implication of this is that profitability and customer’s satisfaction of SMEs in Kogi State will be enhanced if materials are properly managed.