EFFECTS OF MATERIAL HANDLING ON PROFITABILITY OF WAREHOUSING

IN SIGINON GLOBAL LOGISTICS, MOMBASA COUNTY, KENYA

BETT KIMUTAI COLLINS

A Research Project submitted to the School of Business in Partial Fulfilment of the

Requirements for the Award of a Diploma in international freight management

RAILWAYS TRAINING INSTITUTE

JULY, 2022

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 DECLARATION AND RECOMMENDATIONS

Declaration

This project is my own work and has not been previously presented to any other institution for
examination.

SIGN…………………………. DATE………………………………….

BETT KIMUTAI COLLINS RTI/KSM/19/00029

Recommendation

This work has been submitted for examination with my recommendations as Railways training
institute supervisor.

SIGN…………………………………. DATE……………………………….

ELIJAH RANGILI, RAILWAYS TRAINING INSTITUTE

COPYRIGHT

© 2022
ii
 BETT KIMUTAI COLLINS
All rights are reserved.

No part of this work may be reproduced or utilized in any form by any means, electronic or
mechanical including photocopying, recording or by any information storage or retrieval system
without prior written permission of the author or Railways training institute.

iii
 DEDICATION

I dedicate this work to my beloved parents, brothers and sisters for their moral support and financial
support that they gave me to accomplish this research project.

iv
 ACKNOWLEDGEMENTS

I would like to give all the glory to the Almighty God for granting me life and time to do this
research project. Thanks to Railways training institute for granting me permission to study in their
school. Thanks also to my supervisor Mr Elijah Rangili for his guidance during the report writing.
Also wish to acknowledge my fellow students for being there for me during group discussions that
helped me a lot to finish this work. May GOD our Lord bless you all.

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Table of Contents
EFFECTS OF MATERIAL HANDLING ON PROFITABILITY OF WAREHOUSING IN
SIGINON GLOBAL LOGISTICS, MOMBASA COUNTY, KENYA .......................................... i

DECLARATION AND RECOMMENDATIONS ........................................................................ ii

Declaration...................................................................................................................................... ii

Recommendation ............................................................................................................................ ii

DEDICATION............................................................................................................................... iv

ACKNOWLEDGEMENTS............................................................................................................ v

LIST OF TABLES......................................................................................................................... ix

LIST OF FIGURES ........................................................................................................................ x

CHAPTER ONE ............................................................................................................................. 1

INTRODUCTION .......................................................................................................................... 1

1.1 Background to the study ........................................................................................................... 1

1.2 Statement of the problem .......................................................................................................... 2

1.3 Objective of the study ............................................................................................................... 2

1.3.1 General objective ................................................................................................................... 2

1.3.2 Specific objectives ................................................................................................................. 3

1.4 Research questions ................................................................................................................... 3

1.5 Justification of the study ........................................................................................................... 3

1.6 Scope of the study..................................................................................................................... 4

1.7 Limitations of the study ............................................................................................................ 4

1.8 Theoretical framework ............................................................................................................. 4

1.8.1 System theory ........................................................................................................................ 5

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1.8.2 Inventory control theory ........................................................................................................ 5

1.9 Conceptual framework ............................................................................................................. 5

1.10 Definition of terms.................................................................................................................. 6

CHAPTER TWO ............................................................................................................................ 8

LITERATURE REVIEW ............................................................................................................... 8

2.1 Introduction .............................................................................................................................. 8

2.2 Material handling ...................................................................................................................... 8

2.3 Material handling Equipment ................................................................................................. 10

2.4 Factors to consider when citing a material handling facility .................................................. 11

2.6 Ethical consideration .............................................................................................................. 13

CHAPTER THREE ...................................................................................................................... 14

METHODOLOGY ....................................................................................................................... 14

3.1 Introduction ............................................................................................................................ 14

3.2 Research design ...................................................................................................................... 14

3.3. Target Population .................................................................................................................. 15

3.5 Sampling and Sampling size................................................................................................... 15

3.5 Data collection procedure ....................................................................................................... 16

3.7: Data Analysis......................................................................................................................... 17

CHAPTER 4 ................................................................................................................................. 18

RESULTS AND DISCUSSION ................................................................................................... 18

4.1 Response Rate......................................................................................................................... 18

4.1.1 Level of education ............................................................................................................... 18

Table 4.1 level of education ......................................................................................................... 18

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Figure 4.1: Level of education Source: Field Data (2022) ........................................................... 19

4.1.2 Duration in the organization ................................................................................................ 19

Table 4.2: Duration in the organization ........................................................................................ 19

Source: Field Data (2022)............................................................................................................. 19

4.3.1 Material handling improves profitability of warehousing in Siginon global logistics. ....... 20

Table 4.3: material handling improves profitability of warehousing in Siginon global logistics 20

Source: Field Data (2022)............................................................................................................. 20

Source: Field Data (2022)............................................................................................................. 21

4.3.2 Factors affecting profitability Siginon global warehousing other than material handling
exists in the organisation. ............................................................................................................. 21

Table 4.4: other factors exist in the organisation that affect profitability of warehousing in Siginon
global logistics. ............................................................................................................................. 21

Source: Field Data (2022)............................................................................................................. 22

Figure 4.3: other factors exist other than material handling exist that affects the profitability of
warehousing in Siginon Global logistics ...................................................................................... 22

Source: Field Data (2022)............................................................................................................. 22

4.3.3 There is a positive relationship between material handling and profitability of warehousing.
...................................................................................................................................................... 23

Table 4.5: is there a positive relationship between material handling and profitability in
warehousing? ................................................................................................................................ 23

Source: Field Data (2022)............................................................................................................. 23

4.4.1 Discussion of major findings ............................................................................................... 25

4.4.2 Relationship between material handling and profitability ................................................... 25

4.4.3 Material handling improves profitability ............................................................................. 25

4.4.4 factors affecting the profitability of Siginon global warehousing. ...................................... 26

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4.5 Summary of findings .............................................................................................................. 27

4.6 Conclusions ............................................................................................................................ 27

4.7 Recommendations .................................................................................................................. 28

4.8 Suggestions for Further Studies .............................................................................................. 28

REFERENCES ............................................................................................................................. 29

APPENDICES .............................................................................................................................. 31

Appendix 1; Questionnaire ........................................................................................................... 31

APPENDIX II; Work plan ............................................................................................................ 32

APPENDIX III: BUDGET ........................................................................................................... 33

LIST OF TABLES

Table 3.1: Target population......................................................................................................... 15

Table 3.2 Sample size ................................................................................................................... 16
Table 4.3: Material handling equipment....................................................................................... 20

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 LIST OF FIGURES

Figure 1.1: Conceptual Framework ................................................................................................ 5

Figure 2.2: Equipment of storage and material handling......................................................... ..... 10

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xi
CHAPTER ONE

INTRODUCTION

1.1 Background to the study

The primary objective of the store is to provide storage of materials. It ensures that materials
regularly required are stored accordingly. Adequate care of materials held within the company is
very important and store staffs must be well trained in ensuring that materials held within the stores
are well taken care of. Storage facilities such as racks, bins, shelves, flat pallets, box pallets, tanks
etc. must be used to ensure safety of the materials.

Some methods of storage are associated with particular method of handling materials and therefore
task of handling materials or stock and that of storage must be taken together. Therefore, provision
of material handling is another essential objective of the warehouse function.
Storage procedures and techniques also encompass store design and store location system. Material
handling cannot be effectively done without taking into consideration the design of the warehouse
which involves planning so that stocks are conveniently grouped and placed for efficient operation.

The warehouse should be designed in such a way that easy flow of items or materials held are
ensured without hindrances. Warehouse location system is also important to ensure that
warehouses can be found when needed with minimum waste of time. Material management is
concerned with the flow of materials from the source of supply through the production line to the
final consumer (Lornum, 2007). Material management includes functions like purchasing
materials, inventory control, receiving materials, warehousing as well as production planning and
control.

According to Cater Douglas (1998) material handling is the aggregate of those ordinary courses of
business which are in the process of production of goods and services to be available for sale.
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Today materials are the livelihood of any company; no company can operate without them, they
must be made available at the right time, right quality, right quantity, right place and at the right
price to promote profitability of the company.

1.2 Statement of the problem

There are enormous varieties of materials in warehouses of all kinds, and they are increasing now
and then because of advancement in technology due to innovation and renovations. This has
brought about a careful and important role to be played by the warehouses as appropriate as
expected. So many damages have been caused to materials in warehouse which has led to
significant losses due to improper warehouse designs, location system, storage procedures and
poor material handling techniques hence lowering profitability of a warehouse. Many materials
have lost their durability due to poor storage facilities, other that should be stored or kept in cold
places are exposed to sun thus deteriorating due to this poor storage procedures and lack of
qualified or experienced and adequate staff to manage storage of materials.

These problems do not just arise but as a result of poor material handling techniques due to
financial constraints by management which hinder purchase of adequate material handling

equipment, building of quality and spacious storage facility (warehouse) and hiring of qualified
personnel’s to operate that equipment. Due to these problems there came the need to undertake a
research on effects of material handling on the profitability of warehousing in Siginon global
warehousing in Mombasa County, Kenya.

1.3 Objective of the study

1.3.1 General objective

The general objective of the study was to assess the impact of material handling on profitability of
warehousing in Siginon global warehousing in Mombasa county, Kenya.

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1.3.2 Specific objectives

1. To establish the influence of material handling on profitability of warehousing in Siginon global

logistics, Mombasa county, Kenya.
2. To asses the factors existing affecting the profitability of warehousing in Siginon global logistics
warehousing, other than material handling, Mombasa county, Kenya.
3. To asses the relationship between material handling and profitability of warehousing in Siginon
Global logistics, in Mombasa county, Kenya.

1.4 Research questions

I. What is the influences of effective material handling on profitability of warehousing in

Siginon global logistics in Mombasa County, Kenya?
ii. Which are some of the existing factors influencing the level of profitability of
warehousing other than material handling in Siginon global logistics in Mombasa County,
Kenya?
iii. What is the relationship between material handling and profitability of warehousing in
Siginon global logistics in Mombasa County, Kenya?

1.5 Justification of the study

The research study aim was to gain knowledge in the areas of warehousing and effects of material
handling on profitability of warehousing in Siginon global logistics in Mombasa County, Kenya.
It also contributed to the existing literature in the areas of storage and handling of materials in
warehouses for future uses. It enabled a lay man in the profession to have first-hand information
on how proper storage and material handling is carried out in the warehouses. Further the study
suggested ways in which the company can adopt to handle and store materials effectively.

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1.6 Scope of the study

The scope of the study was to analyse effects of material handling on profitability of warehousing
in Siginon global logistics in Mombasa County, Kenya. It was also to establish equipment with
high rate of return on investment, increases market share and higher performance in handling of
materials within the warehouse and also show the relationship between material handling and
profitability of warehousing in Siginon global logistics in Mombasa County, Kenya. The study
added knew knowledge to the existing one, especially on how to handle materials effectively in
the warehouse.

1.7 Limitations of the study

The participants in the study were limited to a population of 40 staffs (store keepers) and 30
supervisors currently working in Siginon global warehouses. The study only targeted staffs that
are directly linked to warehouse of Siginon global logistics and did not provide the participation
of the community being served. In fact, that is an area for another research.

The study encountered some limitation for instance, being a time of politics some questions were
taken with suspicion and distrust. However, the researcher assured the respondents that the work
was to be taken with a lot of confidentiality to dismiss those claims as being inconsistent.

Some respondents opted to be absent while others seemed not to cooperate. In the case of absence,
the researcher made appointment with the respondent and came later to collect the data. The
researcher assured the non-cooperating respondents that the information gathered was for
academic purposes only and was to be treated with lot of confidentiality.

1.8 Theoretical framework

This study utilized two theories namely; system theory and inventory control theory

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1.8.1 System theory

A system is a collection of part unified to accomplish an overall goal. If one part of the system is
removed, the nature of the system is changed as well. A system has inputs like raw materials,
processes like planning, controlling, organizing, output like product or services and outcome to
enhance productivity. System theory helps material managers to look at the company more broadly
and also enables them to interpret patterns and events in the workplace.

1.8.2 Inventory control theory

Inventory control involves the actual control of inventory; this can mean inventory of raw
materials, work-in-progress or finished goods. Regardless of the type of inventory in question,
they require storage, and there is a cost always associated with that storage. Therefore, inventory
control theory is concerned with all actions related to the storage of items and the consequences,
both positive and negative (Farrell, 2010).

1.9 Conceptual framework

INDEDEPENDENT VARIABLE DEPENDENT VARIABLE

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 Material handling
equipment

Skilled personnel’s
PROFITABILITY

Storage facilities
INTERVENING VARIABLES

Figure 1. 1: Conceptual Framework

This conceptual framework shows that efforts to increase profitability of companies should begin
with identifying the contributing factors. Once the contributing factors are known, appropriate
strategies can be developed to manage and control the challenge.

1.10 Definition of terms

Box pallet:
Is a size box used for storage and shipping of bulky quantities.

Deterioration:
Is the process of gradual decline as in quality, serviceability?

Material handling:
It’s the movement, protection, storage and control of materials and products throughout
manufacturing, warehousing, distribution, consumption and disposal.

Profitability:
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 This is the ability of a company to use its resources to generate revenues in excess of the
expenses

Storage:
Is the action or method of storing something for future use,

Warehouse
Is a large building where raw materials or manufactured goods may be stored before they
are used.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

Mombasa County, Kenya. It also looked at theories informing the study. The literature review was
from a study that has been carried out in kenya and elsewhere in the world, therefore the emerging
subtitles included; influence of material handling on profitability of warehousing, equipment’s
with high rate of return on investment, equipment’s most likely to increase market share and
relationship between material handling and profitability in warehousing of Siginon global logistics
in Mombasa county, Kenya.

2.2 Material handling

According to Lornum (2007) material handling is an aspect of material management which is

concerned with the safety of material in transit with the regularity of delivery as well as flow of
materials.

According to Badi (2004) material handling refers to the movement of materials inside the work
premise from raw materials stage to finished products storage. Maximum movement of activities
takes place when the work is in progress. Material handling is actually the process of moving
through a full cycle of operations from the procurement of raw materials, storage prior to the use,
handling into and between and handling of the finished goods, packaging, storage and distribution.
In other words material handling is the art of moving things economically, safely and used
properly. Material handling result into some linking of all the processes within the functions of
the business into a single efficient machine or system.

However material handling absorbs time, manpower and money. It adds nothing to the value of
items, but only its cost. Material handling must therefore be controlled and carried out properly if
a high standard of efficiency and cost effectiveness is to be achieved. Better material handling
reduces handling cost; space cost; damage due to poor handling and storage; labour cost;
production waiting time on hand and also increases effectiveness and quality controls; safety level;
production capacity level and efficiency in receipts, storage and dispatch. Proper material handling

8
requires a lot of pre planning which should begin with a systematic analysis of the nature of the
handling problems at hand.

Materials today are lifeblood of any industry and no government or company or private
organization can operate without them. Materials must be available at the proper time; proper
quantity; proper place and at the proper price. Failure to any of those responsibilities concerning
materials adds to the organization cost and decreases its profitability. Baggot (2000) informed that
the importance of material handling cost varies widely between different industries. He said in
sugar refining, materials might represent over 90% of the total production cost whereas in the
extractive industries there is really no direct cost of materials all.

Materials are the main input in any production system. It’s the importance attached to them that
call for a proper management of raw materials in an organization. Moreover the benefit occurs as
a result of material management. Material management concept cannot be a responsibility of a
single department (material department). Therefore such responsibility has to be shared to various
departments in the material under one umbrella known as material management for better
accountability; control; handling; maximum efficiency; necessary recording of data required and
reduction to various acquisition cost thus increasing profitability of a company (Westing and Zone,
2003). According to Chandra (2007) material management is concerned with determination of
optimum level of investment for each components of material and the operation of an effective
control and review of mechanism. The main objective of material management is operational.

The operational objective means that the materials should be available in sufficient quantity so that
work is not disrupted for lack of materials. For profitability of an organization to be achieved,
materials have to be accounted for and verified. The concept of FIFO and LIFO system can be
applied. FIFO (first in first out) this concept implies that materials that were bought or
manufactured first should be the first to be utilized. This concept mostly favours materials that
have expiry dates or those that don’t last long. LIFO (last in first out) states that materials that were
lastly entered into a store are utilized being the first.

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2.3 Material handling Equipment

Material handling involves different types of equipment. This equipment ensures safety of the
materials. This equipment are; transportation equipment which include forklifts, cranes, elevators,
trucks and vehicles. They are powered by hand, gasoline or electric power and have capability of
moving materials horizontally Wheelbarrows and trucks are simplest among all but they need a lot
of manpower for relatively small load. Tractors and trailers are other popular modes of
transportation. Great flexibility is provided by these methods. Trailers can be left loaded and can
be picked up later by other different tractors. This is considered as one of the most convenient and
important method of handling materials in a warehouse. For movement of water, natural gas and
oil, pipeline and pumps can be used hence saving time for production. Badi (2004)

Lowering and lifting equipment are meant for vertical movement of materials in a warehouse. They
lift materials by winding a rope or cable on a drum. Cranes and hoists are the common means of
vertical movement of materials. Hydraulic and electric operated elevators also fall under this
category of material handling equipment. Combination of movement, lifting and lowering of
materials equipment include conveyors which move materials in all directions between two fixed
points. These conveyors have advantage that they largely save labour cost thus increasing
profitability of a firm. Pallets, shelves, racks, storage cabinets, bins and warehouses are essentials
for material storage. Use of the above equipment enhances effective material handling hence
reducing cost, damage of materials thus increasing profitability of a firm. CIPS (2011).

According to Ardent P, (2011) store is a function of material management in an organization.

Hence it’s generally found that store functions reports to the materials manager. But in some
situations stores functions reports to the production manager. Centralized stores is to store all items
at a central place and control materials movement from this central place whereas decentralization
concept is moving the materials to the respective consumer function or directly to the point of use.
Centralization or decentralization is a matter of convenience. However one basic organizational
feature must be observed. The entire warehouse setup should be under the unified control of one
department with senior controller of stores in charge in order to efficiently achieve the objectives
of the function of stores thus increasing profitability of the company.

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 MATERIAL HANDLINGEQUIPMENT AND STORAGE FACILITIES

Cranes Warehouse

Trucks, Trailers, Pallets, Racks, Shelves,

Wheelbarrows Cabinets

Figure 2.2: Equipment of material handling

Efficient and safe handling of materials allows workers to focus on their primary business. The
proper handling and storing of materials can prevent severe accidents, process shutdown and even
plant closure.

2.4 Factors to consider when citing a material handling facility

According to Lornum et al, (2007) warehouse is an important building in any company. It helps
industries to store their materials until the market demands them, making it a business necessity.
However when it comes to the construction of warehouse, companies often overlook certain crucial
factors that can make a huge difference to effective storage. Here are some important factors to
consider when citing an effective storage facility;

Warehouse location:

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Is the one of the most essential in storage facility construction? In order to locate a good location,
one has to remember the main source of your business when constructing the warehouse. Factors
like objective of the facility, nature of goods to be stored, easy access and logistics should be
considered.

Rack design:

Different types of goods will need different racking mechanism and design. You will need to
consider how the goods will be handled and plan the rack design. Also consider different types of
materials for your racking system. This reduces the cost during construction.

Material handling equipment:

Availability of staging facilities and handling equipment should be considered .If the primary mode
is truck/trailer, there must be ample outdoor storage facilities and there turning room for this
material handling equipment.

Doorways:

Here several factors such as traffic that will need to pass through, the amount of insulation required
must be considered. If these factors are assumed, firms will end up with inefficient doorways that
can increase their operational cost.

Safety measures:

A safety inspection or survey helps to set up safety standards as per ones industry regulations. This
helps save materials in case of a disaster and also ensures that all operations are handled in proper
manner

Transportation mode:

That suits transportation of your product in and out of the firm should be considered .In this case
the facility should be near roads to ease transportation.

Availability of skilled workforce:

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Purchasing a storage facility in remote areas may cost less but it can come at a cost, with shortage
of skilled or trainable workforce. It’s best to be located in an area that will have ample supply of
the proper mix of skilled sets that will support your operation.

Cost of material handling equipment

You should consider the cost to be incurred in purchasing the material handling equipment to be
used in the warehouse. It should be able to have higher rate of return on investment. It also should
be easy to operate by the available workforce, also it should be able to handle large loads within
short period of time, thus saves time.

Availability of raw materials:

Raw materials to be used should be available within the facility to reduce cost of transportation.
2.6 Ethical consideration

In consultation with my research supervisor to this study, the information gathered from
questionnaires was treated with confidentiality since it entailed private information of the
respondents. Also a permission letter from Siginon global logistics in which the study was
carried in was availed.

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 CHAPTER THREE

METHODOLOGY

3.1 Introduction

This chapter presents the research methodology that the study assumed. This incorporated the
location of the study, study design and target population. Sampling design, data collection
procedures and data analysis techniques.

3.2 Research design

Design involves planning, organizing, collection and analysis of data to provide information and
also give solutions to the existing problems of the study. According to Gerhard (2004), a research
design is a way a study is designed or the method used to carry out the research.

The study utilized descriptive survey which involves asking the same set of questions to a large
number of individuals by telephone, mail or in person. This design provides a precise picture of
events and it also seeks to explain perceptions and behaviour on basis of data gathered at a
particular time. It was appropriate when describing some aspects of a population by selecting
balanced sample of individuals who were asked to complete questionnaires, interviews or tests. In
using descriptive survey, one must be critical about the questions because descriptive survey
results can vary considerably depending on the exact wording of the questions which are normally
asked, seeked to probe into private matters of the respondents and the respondents may not be
completely truthful about the response.

The study mainly used qualitative and quantitative approaches based on the study objectives that
employed a survey design. The use of qualitative and quantitative approaches based on the study
objectives that employed a survey design. The use of quantitative and qualitative approaches in
combination provide a better understanding of research problems that when either approach is used
alone. The use of multiple data sets can inform the research, by yielding insights and
methodological changes that improve the study and strengthen findings as well as collective
diverse data which best provide an understanding of a research problem.

14
Questionnaires require respondents who can articulate their thought well and sometime put such
thoughts in writing. It is again very difficult to get all the questionnaires completed for meaningful
analysis to be made on them. Though these difficulties and disadvantages existed, the targeted
respondents were assumed to have a basic education and therefore the descriptive survey designs
was considered the most appropriate for analysing the effects of material handling on profitability
of warehousing in Siginon global logistics.

3.3. Target Population

Population is a complete set of individuals, cases or objects with observable characteristics and
target population is the population to which the research wants to generalize the results of study.
The researcher chose a target population of 70 warehouse staff, which is 40 storekeepers and 30
supervisors to efficiently accomplish in depth study of effects of material handling on profitability
of warehousing in Siginon global logistics in Mombasa County, Kenya.

Table 3.1: Target population

Workers Target population Target population percentage

Store keepers 40 57%

Supervisors 30 43%
Total 70 100%
Source: (field data 2022)

3.5 Sampling and Sampling size

The research adopted stratified sample selection technique. Stratified random sampling technique
is the probability research that divides population into homogeneous groups with each group
containing subjects with similar characteristics .A sample is part of the population which can
represent the whole population. The sample size determined the research accuracy, expenses
incurred as well as the duration the research took. Therefore the sample size must be considered
in term of costs and its precision. The study used 30% of the targeted population which was 21 as
the sample size. That is 12 store keepers and 9 supervisors of warehouse of Siginon global logistics
in Mombasa County, Kenya.

Table 3.2 Sample size

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Population category Sample size Sample size percentage

Storekeepers 12 57%
Supervisors 9 43%
Totals 21 100%
Source: (Modified from Siginon global logistics HRM, 2022)

3.5 Data collection procedure

The researcher obtained an introductory letter from the learning institution and proceeded to the
field to collect data from the sampled Siginon global warehouse.
Both closed and opened ended questionnaires were used during the research because they create
freedom of expression, not biased due to limited ranges of response and respondents further
explain their answers. Closed ended questionnaires were used where the respondents respond type
is pre- determined and organized. A combination of both open ended and closed ended questions
will be applied in the research. This approach will be helpful in that it minimizes chances of low
responsiveness at low cost.
3.6 Data collection instruments
In this study a structured questionnaire shall be administered to help researcher address the
objective of the study. This is because, unlike interviews, questionnaires are good for sensitive and
ego-related questions. Carrying out research with questions is less time consuming and
respondents can fill in questionnaires at a convenient time as well. Questionnaires provide the
researcher with qualitative data.
The questionnaires will be administered to warehouse manager by drop and pick method. A time
period of 5 working days will be allowed to fill the questionnaires after which they would be
collected.
3.6.1 Piloting
The researcher personally administered questionnaires to the respondents after dividing them into
two groups; storekeepers and supervisors. Through the storekeepers, the researcher intended to get
the benefit/ difficulties encountered while using the material handling equipment. Through the
supervisors, the researcher wanted to get information on the performance of the acquired material
handling equipment and their rate of return on amount invested in them ; i.e. how effective they
are in their operations. Since the importance of piloting is to check out research procedures so that
adjustments can be made before the actual data is collected i.e. it is a preliminary research, prior
to the main.
3.6.2 Validity
Validity is the degree to which the results obtained from the analysis of data actual to the
phenomenon under study, this is according to Mugenda and Mugenda (2004).

16
The researcher will use his observative skills to check validity of answers from the questionnaires
availed to the respondents. He will also use analysed expertise to make his judgements based on
responds to ensure that collected data is valid.
3.6.3 Reliability
Reliability is the degree to which an assessment tool produces stable and consistent results. The
researcher will administer the questionnaires twice over a period of time to the same groups of
individuals. The results from the first and the second response will be correlated to ascertain the
test of stability over time. If results from second response are similar to the first, then the results
will be regarded reliable.
3.7: Data Analysis

The collected questionnaires was edited and any incomplete questionnaire eliminated thus the
exact sample size was accounted for. The valid questionnaires were coded and analysed through
simple statistical methods which included percentage and frequencies. This gave a clear data that
showed profitability of warehousing by use of material handling equipments in Siginon global
logistics in Mombasa County, Kenya.
The analysed data was then presented using tables and pie-charts for easy interpretation and
understanding

17
 CHAPTER 4

RESULTS AND DISCUSSION

This chapter reports the findings of data that was collected from Siginon global warehousing,
Mombasa county. It therefore consists of data analysis and presentation of the findings. The sample
was done using the questionnaire to different respondents to establish the effect of material
handling on profitability of warehousing in Siginon global logistics.
4.1 Response Rate

This section contains the general information pertaining to respondent personal details.
4.1.1 Level of education

Respondents were asked their level of education. 6(7%) of the respondents were primary school
leavers. 12(17%) were secondary school leavers, 25(36%) were diploma holders, while 27(40%)
were university graduates. This was shown on table below (table 4.1);
Table 4.1 level of education

Category Frequency Percentage

Primary 6 7%
Secondary 12 17%
College 25 36%
University 27 40%
TOTAL 70 100%
Source: Field Data (2022)
This study revealed that the majority of the respondents were university graduates who were twenty
seven out of the target population. This was a determined group that was capable of their savings
and development. They were from different backgrounds but lived within the county.The
advantage of this was that they are able to provide insights on areas changes should be made.
This was presented in the figure below;

18
 Figure 4.1: Level of education Source: Field Data (2022)

4.1.2 Duration in the organization

The researcher was interested in knowing the duration of the respondents in organization
administered with the questionnaire.10(15%) of the respondents were less than 1years,
16(23%) were falling between 1-2 years, 15(21%) were falling between 2-3 years, 14(20%)
were falling between 3-4 years, while 15(21%) above 5 years. This was then shown in Table 3

Table 4.2: Duration in the organization

Category Frequency Percentage

Less than 1 yrs 10 15%
1-2 yrs 16 23%
2-3 yrs 15 21%
3-4 yrs 14 20%
Above 5 yrs 15 21%

Total 70 100%
Source: Field Data (2022)

The study revealed that majority of the respondents was falling between age brackets 1-2 years.
This was a determined group that was capable of determining their potentials by applying
different material handling skills to ensure profitability is attained in the organisation. They
were determined to increase the volume of materials handled within the organisation and
minimum time taken in handling them.

19
 4.3.1 Material handling improves profitability of warehousing in Siginon global logistics.

The researcher wanted to find out if material handling improves profitability of warehousing
in Siginon global logistics. Findings showed that 20(29%) of the respondent agreed, 25(36%) of
the respondent strongly agreed, 12(17%) of the respondent disagreed, 8(11%) of the respondents
strongly disagreed while 5(7%) of the respondents were neutral as shown in the table 4.3

Table 4.3: material handling improves profitability of warehousing in Siginon global

logistics

Category Frequency Percentage

Agree 20 29%
Strongly Agree 25 36%
Disagree 12 17%
Strongly Disagree 8 11%
Neutral 5 7%

Total 70 100%
Source: Field Data (2022)
From the findings above, we found that the respondents tended to agree more that
material handling increases or improves profitability of warehousing in siginon global
logistics. It was discovered also that the respondents disagreed because they wanted the
costs incurred in purchasing the material handling equipment considered so as to
determine the profitability of warehousing in Siginon global logistics.
This means that the suppliers are usually selected based on their prices and their quote,
and where the supplier quotes a low price, he/she is likely to win the tender regardless of
the hidden costs. This means that the cost eventually ended up exceeding the budget
allocation. The respondents agreed that prices kept on fluctuating due to inflation, that
there was tendency to purchase material handling equipment from the suppliers who
offered credit terms and that the quality of procured material handling equipments
affected their cost.
This means that a recurrent equipment to be purchased this year at a specific price will
again be procured the following year at a different price, that credit purchases were preferred
since Siginon global warehousing did not have funds at all times of procurement and that when
funding was limited, quality service would always be compromised.

The findings were further represented in the figure 4.2

20
 Figure 4.2:material handling improves profitability of warehousing in Siginon global
logistics
Source: Field Data (2022)
Conclusively, material handling positively affects the profitability of the organisation by
shortening the operating circle, reducing handling costs, eliminating unproductive handling of
materials, reduces idle machine capacity, reduces idle time of labour, eliminates factory hazards,
maintains quality of materials, enables optimum usage of space, facilitates materials issues,
facilitates customer care, facilitates better quality of products and timely production thus increasing
the productivity of the organisation.
4.3.2 Factors affecting profitability Siginon global warehousing other than material
handling exists in the organisation.

The researcher wanted to find out if other factors exist that affects the profitability of
warehousing in Siginon global logistics. Findings showed that 6(9%) of the respondent agreed
other factors existed, 25(36%) of the respondents strongly agreed, 8(12%) of the respondents
disagreed, 7(8%) of the respondents strongly disagreed while 24(35%) of the respondents were
neutral as shown in the table 4.4
Table 4.4: other factors exist in the organisation that affect profitability of warehousing in
Siginon global logistics.

Category Frequency Percentage

Agree 6 9%
Strongly Agree 25 36%
Disagree 8 12%
Strongly Disagree 7 8%
Neutral 24 35%

21
 Total 70 100%
Source: Field Data (2022)
From the findings, most of the respondents agreed that other factors exist in the organisation
which affect the profitability of the organisation. Most of the respondents strongly agreed of the
existence of such factors. Competition was the key factor affecting the profitability of
warehousing in Siginon global logistics.
Also, level of demand for the company’s product was also the key factor, thus demand trends in
the market place affects the company’s profitability. Also general economic conditions like
inflation, interest rates and exchange rates affect the profitability of the company since the
majority agreed to the assertion.
Also, respondents agreed that company’s commitment to advertising will affect its profitability.
They also strongly agreed that the cost of operations will definitely affect the profitability of the
warehouse. Economies of scale was also stated that levels of economies of scale of the company
will also affect the level of profitability.
Somehow, most of the respondents stated that firms objective determines the level of profitability
of the warehouse. Also, the level of price discrimination on products in the warehouse will affect
the company’s level of profitability.

The collected data can further be represented in the figure 4.3

Figure 4.3: other factors exist other than material handling exist that affects the
profitability of warehousing in Siginon Global logistics
Source: Field Data (2022)
It can conclusively be stated that the profitability of an organisation is affected by a
combination of actors ranging from competition, demand, economic situation, level of
advertisement, objectives of the firm and price discrimination.

22
 4.3.3 There is a positive relationship between material handling and profitability of
warehousing.

The researcher wanted to find out if there exists a positive relationship between material and
profitability of warehousing in Siginon Global logistics. Findings showed that 14(20%) of the
respondent agreed, 10(14%) of the respondents disagreed, 28(40%) of the respondents strongly
agreed, 14(20%) of the respondents strongly disagreed while 4 (6% ) were neutral as shown in
the table 4.5
Table 4.5: is there a positive relationship between material handling and profitability in
warehousing?

Category Frequency Percentage

Agree 14 20%
Strongly Agree 10 40%
Disagree 28 20%
Strongly disagree 14 20%
Neutral 4 6%
Total 70 100%
Source: Field Data (2022)

From the responses it was discovered that most of the respondents agreed that there exists a
positive relationship between material handling and profitability of warehousing in Siginon
global logistics. Therefore it was discovered that material handling facilitates a shorter
operating circle because machines handle materials faster than humans. The respondents
strongly agreed to the fact that material handling reduces on the handling costs. Also that
indeed material handling eliminates unproductive handling of materials since the majority
agreed to the assertion.
Furthermore, most of the respondents strongly agreed that indeed material handling reduces
idle machine capacity, idle time for labour. Also material handling eliminates factory hazards,
this itself is a proof that there is a positive relationship between material handling and
profitability.
It was discovered also that material handling enables optimum usage of space in the stores and
the organisation as a whole. Thus maximum utilization of the available space and hence
profitability.
Most of the respondents strongly agreed to the fact that material handling facilitates better
quality products since damages and wastages are minimized. This ensured maximised
profitability.

23
 Also, the respondents agreed to a positive relationship between material handling and
profitability by implying that Material handling facilitates timely productions since materials
are assured to be in the right place at the right time hence facilitating timely productions.

This was further represented in the figure 4.4

45

40

35

30

25

20

15

10

0
agree strongly agree disagree strongly disagree neutral

Series 1 Series 2 Series 3

Figure 4.4 ; there is a positive relationship between material handling and

profitability of warehousing.
Source ; field data (2022)

From the findings it was concluded that effective material handling positively affects the
profitability of the organisation by shortening the operating cycle, reducing handling costs,
eliminating unproductive handling of materials, reduces idle machine capacity, reduces idle
time for labour, eliminates factory hazards, maintains quality of materials, enables optimum
usage of space, facilitates better quality of products and timely productions thus increasing the
productivity of the organisation.

24
 4.4 FINDINGS, SUMMARY, CONCLUSION AND RECCOMENDATIONS
This unit gives a discussion of findings, a summary, conclusion and recommendations which are
in line with the objectives of the study as well as suggestions for future research.
4.4.1 Discussion of major findings

4.4.2 Relationship between material handling and profitability

From table 4.4, it can be observed there are a number of ways that material handling relates with
the profitability of the organisation.
Material handling maintains a shorter operating cycle and reduces the handling costs such that
the stores and material handling department, such that the stores and material handling
equipment, as a cost centre does not inflict a heavy cost burden upon the finances of the
organisation. As confirmed by the 40% correspondents that strongly agreed to this assertion. It
also eliminates unproductive handling of materials which is highly associated with the manual
handling, alongside the details in the operating cycle and therefore this reduces idle time for
labour thus enhancing operational efficiency in the organisation. 38% correspondents that
strongly agreed and agreed that to the effect of material handling in reducing the handling costs
in the long run. As highlighted by 40% and 30% strongly agreeing and agreeing respectively,
material handling eliminates factory hazards like accidents and damages on the product and other
assets of the company thus maintains the quality of materials. For example where the warehouse
is dealing with tea storage, delicate items like electronics, proper material handling helps to
reduce a good deal of accidents and damages. This is consistent with the findings of
Ondiek(2009) who emphasized the role of material handling in reducing handling costs and
unproductive handling of materials. The study has also revealed that material handling enables
optimum usage of space in such a way that materials can be packed from the floor to the ceiling
of the warehouse using material handling machines like cranes and others. 30% and 40% of the
sample agreed and strongly agreed respectively that indeed material handling enables optimum
usage of space. Material handling facilitates better customer care such that customers orders are
quickly handled. Dispatches are promptly organized with minimum damages and delays.
Material handling further facilitates better quality of products and facilitates timely production.
With a reduction in the process of production cycle, the quality of products is enhanced and the
time of production is significantly reduced. This too is consistent with the findings of Zanto
(2008) who noted that materials handling facilitates customer care and better quality products.
Material handling is further significant in facilitating quick and efficient material handling. As
can be observed that 35% and 45% agree and strongly agree respectively that machine automated
system making the issue of materials very quick and safe thus reducing on the order processing
time. This is also very important in situations where materials to be issued are bulky and would
require much labour force to handle. However a crane machine operated by one or two personnel
can quickly and safely issue bulky cargo within a very short time.
4.4.3 Material handling improves profitability

From table 4.3, we found that 29% and 36%, agree and strongly agree respectively that
material handling increases or improves profitability of warehousing in siginon global
logistics. It was discovered also that the respondents disagreed because they wanted the
costs incurred in purchasing the material handling equipment considered so as to
determine the profitability of warehousing in Siginon global logistics.

25
This means that the suppliers are usually selected based on their prices and their quote,
and where the supplier quotes a low price, he/she is likely to win the tender regardless of
the hidden costs. This means that the cost eventually ended up exceeding the budget
allocation. The respondents agreed that prices kept on fluctuating due to inflation, that
there was tendency to purchase material handling equipment from the suppliers who
offered credit terms and that the quality of procured material handling equipments
affected their cost.
This means that a recurrent equipment to be purchased this year at a specific price will
again be procured the following year at a different price, that credit purchases were preferred
since Siginon global warehousing did not have funds at all times of procurement and that when
funding was limited, quality service would always be compromised.

4.4.4 factors affecting the profitability of Siginon global warehousing.

From table 4.4, 9% and 36% of the respondents agree and strongly agree that there are factors
affecting profitability of warehousing in Siginon global logistics. They agreed that company’s
with monopoly power have little competition and therefore the demand to their products will be
more inelastic leading to higher profitability. This is however only true where the entry into the
industry is restricted because in an industry where there is free entry of firms, the firm`s profit
attract other players into the industry as noted by Lee et al (2007)
Others included the demand trends which were identified by the respondents agreeing strongly
that high inelastic demand leads to low profitability while highly inelastic demand guarantees
profitability of the company.
Respondents also identified the general economic conditions like inflation, interest rates and
exchange rates As a significant factor affecting the profitability of companies, this is just as
Marta (2008) stressed that if there is economic growth, then there will be increased demand for
most products especially luxury goods with a high income elasticity of demand.
The level of advertising which brings about the awareness of the company`s products to the
customers and the relative costs of operations incurred by the company in the production was
noted by the respondents who agreed and strongly agreed that a successful advertising campaign
can increase demand and make the product more inelastic in demand. This agrees with Adeloye
(2008) who further noted that the increased revenue will need to cover the costs of the
advertising though.
Selling, administrative and other overhead costs were identified by the respondents to as the
major factor affecting the profitability of Siginon global warehousing. This findings agree with
the findings of Marta (2008) who alighted among others the level of competition, level of
demand, economic conditions, advertising costs and the relative operational overheads as the
main determinants of the profitability of the organisation. The study further revealed that the
profitability of an organisation is highly affected by the level of economies of scale, the level of
production and management efficiency, the firm`s objective and the effectiveness of the
organisation`s price discrimination campaigns. These findings relates to the findings of Okpara,
(2008), and Ademeyi et al (2010) who both emphasized that for a company to ensure its
profitability, it has to be operating the economies of scale, with a highly efficient operational
management departments, its objective must be a profit motive and should have a successful
price discrimination strategy.

26
At least 45% of the respondents identified a number of factors including price discrimination, the
firm`s objectives, management efficiency, level of production, economies of scale, relative costs
of operation, level of advertisement, general economic conditions and levels of competition faced
by the firm.

4.5 Summary of findings

Material handling facilitates a shorter operating cycle and reduces the handling cost. It also
eliminates unproductive handling of materials and reduces time for labour, eliminates factory
hazards and maintains quality of materials. This is consistent with the findings of Ondiek (2009)
who emphasized the role of material handling in reducing handling cost and unproductive handling
of materials. The study also revealed that materials handling enables optimum usage of space, it
facilitates better customer care and facilitates timely production. This too is consistent with the
findings of Zanto (2008) who noted that material handling facilitates customer care and better
quality products.
From the table 4.4 other factors affecting profitability of warehousing in siginon global
warehousing were realised. Level of competition, demand trends, the general economic conditions
like inflation, interest rates and exchange rates and relative cost of operation incurred by the
company in production, selling, administrative and other overhead costs among others. This
findings agree with the findings of Marta (2008) who highlighted among others; the level of
competition, level of demand, economic conditions, advertising costs and relative operation
overheads as the main determinants of profitability in an organisation. The study further revealed
that the profitability of the organisation is highly affected by the level of economies of scale, the
level of production and management efficiency, the firms objectives and the effectiveness of the
organisation`s price discrimination campaigns. This finding relate to the findings of Okpara (2008)
and Ademeyi et al (2010) who both emphasized that for a company to ensure its profitability, it
has to be operating in the economies of scale, with a highly efficient operational management, its
objectives must be a profit motive and should have a successful price discrimination strategy.

4.6 Conclusions

Findings reveal that there is a positive relationship between material handling and the
profitability of warehousing and therefore the researcher concludes that;
Material handling aids the profitability of an organisation in a way that it facilitates a shorter
operating cycle, reduces the handling cost, eliminates unproductive handling of materials,
reduces idle time of labour, eliminates factory hazards, maintains quality of materials, enables
optimum usage of space, facilitates material issues, facilitates better customer care, facilitates
better quality products and timely productions. Therefore, for a company to ensure its
profitability, it has to take deliberate measures to improve and standardize its material handling
systems through mechanisation of this departments.
The researcher further concludes that a warehouse can use a number of materials handling
systems available in the store. These includes; conveyors, cranes, industrial trucks, positioning
equipment, unit load formation equipment and storage equipment among others. These can be
used depending on the capital investment in the organisation in the mechanisation of the
materials handling function.

27
Finally, the researcher concludes that there are a number of factors affecting the profitability of
warehousing in Siginon global logistics. These includes among others; level of competition, the
level of demand for the company`s products, the general economic conditions, level of
advertisement, relative costs of operations, economies of scale, level of production and
management efficiency, the firm’s objective and the level of effectiveness of the company`s price
discrimination strategy.

4.7 Recommendations

The researcher recommends that organisations should invest in material handling equipment
like cranes, conveyors, industrial trucks, and others so as to enhance operational efficiency.
This will lead to profitability.
The researcher also recommends that organisations prioritize the material handling function
since it is a vital cost centre.
The researcher also recommends that organizations should ensure prudent management of
materials to minimize wastage of materials.
Materials supply should be optimum to avoid “stock-outs” while work in process.
Organizations should always take into cognizance the cost of production or price of raw
materials before arriving at selling price.
There should be a good record system of materials for the operations of the organization
particularly as it affects productions.
Rate of spoilage and wastages should be minimized as much as possible and ensure that
products pass quality control.
There is the need to train staff in the area of material management to further enhance the
knowledge of the job.
Organizations should computerize their material management system in line with the global
changes in order to be able to track the movement of materials in the warehouse.

4.8 Suggestions for Further Studies

This study examined the effects of material handling on the profitability of warehousing in Siginon
global logistics, however further research should be conducted in areas which are directly related
to the organisational profitability and Material handling in the organisation;

a Training and development on the efficiency of materials handling.

b Material handling on the customer service delivery of an organisation.

28
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(2011), Management Purchasing and Supply of materials, level 4 Profex.

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Sao Paulo: Atlas, 1996. Kulak, O. A decision support system for fuzzy multi-attribute selection
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Ioannou, G. An intergrated model and a decomposition-based approach for concurrent layout and
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APPENDICES

Appendix 1; Questionnaire

Iam Bett Kimutai Collins, a student at Railways Training Institute, taking a diploma course in
International Freight Management. I would like to investigate the effects of material handling on
profitability of warehousing in Siginon global logistics in Mombasa County, Kenya. Your views
will be treated with confidentiality and will be highly appreciated. Please tick where necessary.
SECTION ONE: background information
1) Gender; male () female ()
2) Age; 18-24yrs ( ) 24-30yrs ( ) 30-35yrs ( )
35 and above years ( )
3) Level of education; primary ( ) secondary ( )
tertiary ( )
4) Duration in the organization
i) Less than one year ( )
ii) 1 to 2 years ( )
iii) 2 to 3 years ( )
iv) 3 to 4 years ( )
v) Above 5 years ( )
SECTION TWO; material handling performance (tick where appropriate)

I) Material handling improves profitability of warehousing in Siginon global logistics

1) Agree ( )
2) Strongly agree ( )
3) Disagree ( )
4) Strongly disagree ( )
5) Neutral ( )

31
 SECTION THREE; factors affecting profitability of warehousing in Siginon global
logistics other than warehousing.

II) There exists other factors affecting profitability of warehousing in Siginon global
logistics other than material handling,? if there exists identify some.
1) Agree ( )
2) Strongly agree ( )
3) Disagree ( )
4) Strongly disagree ( )
5) Neutral ( )

SECTION FOUR; Relationship between material handling and profitability of

warehousing.

III) There is a positive relationship between material handling and profitability of

warehousing in Siginon global logistics?
1) Agree ( )
2) Strongly agree ( )
3) Disagree ( )
4) Strongly disagree( )
5) Neutral ( )

THANK YOU SO MUCH FOR YOUR COOPERATION!!

APPENDIX II; Work plan

MONTH

ACTIVITY JAN FEB MARCH APRIL MAY JUNE

PROPOSAL
WRITING

CORRECTIONS

32
 DATA
COLLECTION

DATA
ANALYSIS

REPORT
WRITING

SUBMISSION
OF REPORT

FINAL
SUBMISSION

Source: author 2022

APPENDIX III: BUDGET

Stationery

4pens @ 20 80

Binding and cover 1200

Library fee in 30 days 1520

TOTAL 2700

Internet

Browsing fee 2000

33
 Typing and printing 3000

TOTAL 5000

Travel and accommodation 4000

Fare 2000

Telephone charges 1000

Lunch 2000

TOTAL 10000

Others 5000

GRAND TOTAL 22,700

Source; author 2022

34