AN EVALUATION OF PRODUCTION PROCESS AND CAPACITY UTILIZATION A CASE STUDY OF NIGERIAN BREWERIES ENUGU
ABSTRACT
This research work aims at critically evaluating the process of production and the extent to which the installed capacity of Nigerian breweries is utilized. The study traced the historical development of the company its range of product and the extent which its capacity is utilized.
In collecting data for the research, two sources of data collection were used. They are primary and secondary data sources. The primary data were got through personal outer view and observations. While secondary data were collected from Nigerian breweries Plc Enugu and other relevant materials and information centers.
From the analysis of the data collected, the following findings were made:
1. There is problem with the acquisition of spare parts because of the ` prohibitive price of foreign exchange.
2. Poor maintenance of frequent machine breakdown. Statistics are not kept on the performance of machine.
3. Inadequate of raw materials which is one of the factors to the full utilization of the installed capacity.
4. Power failure breakdown on the production process. Despite the installation of 15 – mega watts electric generating plant as a safeguard against intermittent power supply from national electric power authority (NEPA) the company still suffer from power supply problem.
Based on the above findings, the following recommendations were offered after analyzing.
1. The rate of breakdown of machineries will prevent the [purchase of out model. Recommendation of periodic maintenance of machine should be adopted to reduce incidence of breakdown.
2. There is high cost of certain items, like beer which makes the consumption low. It was recommended that the company should be dong an objective pricing if its goods so that it does not price itself out of the market.
3. There is not enough training and development of staffs for the proper handing of the facilities of production industries it was recommended that enough training and development of staff should be provided the company. It will enable them to shift emphasis on keeping track of manufacturing line cost to facilities of production.
Title page
Dedication
Approval and certification
Acknowledgment
Abstract
Table of content
1.0 Introduction
1.1 Background of the study
1.2 Statement of problems
1.3 Objective of study
1.4 Statement of hypothesis
1.5 Significations of study
1.6 Limitation of study
1.7 Scope of the study
CHAPTER TWO
LITERATURE REVIEW
2.1 Definition of concepts
2.2 Productions planning and control
2.3 Activities involved in production planning and control
2.4 Production process and design
2.5 Capacity utilization
2.6 Material handling
2.7 Peak versus normal lead capacity
2.8 Productions planning and activities in Nigerian breweries
2.9 Inventory control
CHAPTR THREE
RESEARCH DWESIGN AND METHODOLOGY
3.1 Research methods used
3.2 Sources of data
3.3 Investigation procedure
3.4 Population and sample size determination
3.5 Treatments of data.
CHAPTER FOUR
PRESENTATION ANALYSIS AND INTERPRETATION OF DATA.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS.
5.1 Summary of finds
5.2 Recommendation
5.3 Conclusion
BIBLIOGRAPHY
APPENDIX A: QUESTIONNAIRE FOR MANAGEMENT
APPENDIX B: QUESTION FOR WORKERS.
CHAPTER ONE
1.0 INTORDUCTION
1.1 BACKGROUND OF THE STUDY
Mayer (1982 pg2) defined production with reference to goods as the fabrication of a physical object through the use of labour, material and equipment, whereas, with reference to service, production is the discharge of a function, which has utility. In either case something is being produced which did not exist earlier. From the above explanation production is the transformation of resources into finished goods and services. He also pointed out that any organization, which transforms inputs to output, is engaged in production.
Buffa E.S (1973) Said that production is the process by which goods and services are created. He also stated further that production process are found in factories, offices and hospital. The primary aim of production management is to optimize the production system, the consequent result of optimization is production efficiency.
The dictionary of business management defined production as any form of activity that adds value to goods and service including transportation and warehousing until used. Utility is the ultimate satisfaction derived from the consumption of a particular goods and services.
Devek Lobley (1974) said that the process of converting raw or base material originally extracted from the earth, sea or atmosphere into from which yield utility or satisfaction to consumers at a time and place convenient to the consumer the emphasis is still on the ultimate satisfaction of the consumer which is what production to bring about this transportation. In some circumstance, it is appropriate to produce goods by employed a high proportion of labour to the other factors of production.
Production capacity Jerry Rosenberg said that it is with available equipment, the maximum quantity of units that can be made on a stated period the fall capacity production is predetermined and installed before the commencement of production process adequate planning and forecast is made so to that effect.
The Dryden Press (1990) said that capacity is widely understood by many people can be as the ability of a unit to produce that which consumers require and clearly there must be some match between needs characterized by market forecast and abilities characterized by capacity. In this regard capacity can be differentiated into three levels and they are as follows:
i. Potential capacity
ii. Immediate capacity
iii. Effective capacity
Potential capacity is that capacity which can be made available with the current budget period.
Immediate capacity is that which is used within the current budget period.
Effective capacity is that capacity which is used with the current budget period.
Therefore, production management modifies production policies and some times aids the production engineer to modify his design as well since production engineering is more concerned with the design of physical equipments.
The functions of production have existed since people began employing organized effort to improve their life. Many early civilizations enjoyed a high degree of managerial skills. The Egyptian pyramids, the great wall of China are some of the many examples that illuminate organized production in ancient times. In general, production management is responsible for the performance of the following tasks:
1. Production planning
2. Product design
3. Methods of production
4. Materials handling
5. Production control
6. Quality control.
PRODUCTION PLANNING: This is the process of having the necessary resources for production whether you are producing physical objects or rendering services. Example raw materials, manpower, money, machines etc. in other words production planning begins with a forecast of the future demand for an organization goods and services. It continues with the translation of this future demand into demands it creates for such factor of production as labour, material, supplies, equipment and buildings. Production planning ends with the procurement of these required factors of production.
Production design: This involves converting productions or services ideas into a physical form. It is a strategy in which a firm develops new or modifies products or services to appeal to present markets or customers. For example, designing products to meet the needs of the modern user or rendering services in such a way that will appeal to customers.
Method of production: It is the duty of the production manager to determine what method of production to be used. Many methods are available and the choice of methods depends on the financial standing of the organization and the availability of human and materials resources. We have the manual methods, man-machines methods and automatic machine method. A good example is in agriculture where we have manual methods of farming where hoes and machine are used in cultivation and harvesting the crops and the mechanized method where harrowing ridging planting and harvesting are performance by machines.
Material handling: Much time and effort is spent in moving materials from one place to another. This handling is costly and it adds nothing to value of the product but only to the cost. Ideally, there should be no handling but it is not possible in practice, so materials by the most appropriate methods and equipment at the lowest possible cost having due regards to safety.
Production control: Hicks and gullets (1982) define control as a process by which management sees if what happens is what is supposed to happen. The responsibility of those individuals engage in production control activities is to develop and implement procedure which will enable the organization produce the goods or services which an actual demand has occurred. These goods or services must be produced not only in the required quantities but also in accordance with specifications and in time to satisfy customer’s delivering requirements.
Quantity control:
Quality control does not only involves the finished product but starts from the raw materials because if the raw materials is of low quality the end product is likely to be of low quality too. Likewise, the manpower needed in production must be skilled in order to produce the right quality product required. For example, if the organization employs unskilled manpower as the production manager, there is the likelihood that the manager may not produce the right quality product as required by the customers.
Production management components are grouped into the five following sub-headings.
1. THE PRODUCT: The product represent the most obvious embodiment of the interface between marketing and production not only that the consumer should want the product, but also the organization must be capable of producing the product precisely. Therefore, agreement has to be reached between all the business functions on the following issues:
i. Performance
ii. Quality
iii. Quantity
iv. Selling price and production costs
v. Delivery dates
In reaching agreement on the above cognisce must be taken of external factors, such as the market and demand existing culture, the legal constraints and the environmental demand.
2. THE PLANT: Before any product can be made, some plant of a sort must be required both in terms of buildings and equipment. The plant which accounts for the bulk of the fixed assets of the organization must match the needs of the product, the market, the operation and the organization. The production manager, therefore is concerned with questions such as.
i. Future possible demands
ii. Design and layout of buildings
iii. Performance and reliability of equipment
iv. Maintenance of performance
v. Safety of installations and operation
vi. Social responsibility.
3. THE PROCESS:Every decision reached in product manufacture is normally made by bringing together the technical and organizational needs of the product and the organization together with the people with the organization. In deciding upon a process, it is necessary to examine such factors as:
i. Available capacity
ii. Available skills
iii. Types of production
iv. Layout of plant and equipment
v. Safety
vi Maintenance requirements
vii. Cost to be achieved.
4. THE PROGRAMMES: Another conspicuous interface between production and marketing are the usual time tables setting down the delivery but it also effectively determines cash flow which is the prime controller of organizational viability.
Therefore, a good delivery time table should produce the time table for the following:
i. Purchasing
ii. Manufacturing
iii. Maintenance
iv. Cash
v. storage
vi. transportation
5. PEOPLE: In the final analysis, production from start to end depends on people, like all the other elect, skill, expectations and output. The production manager should therefore be involved in the following:
i. Wages
ii. Safety
iii. Conditions of work
iv. Motivation and incentives
v. Trade unions
vi. Education and training.
1.2 STATEMENT OF PROBLEM
Productivity in this country Nigeria as a matter of fact is low and as such is described as a developing economy. In countries where productivity is high we say such countries have developed economy. In view of this, this research is set to examine the following problems:
i. What are problem encounter when getting the raw materials used in the production process in Nigerian breweries Plc?
ii. What are the problems of inventory management in Nigerian breweries and what are the problems of inventory management policies of the company?
iii. What are the problems encountered in the utilization of the installed capacity in Nigerian breweries PLC?
iv. What are the problems in production process of Nigerian breweries PLC?
1.3 OBJECTIVES OF THE STUDY
The objectives of the research works are as follows:
i. To ascertain to what extent the installed capacity of Nigerian breweries PLC is utilized.
ii. To examine how the raw materials used in the production processes are sourced and substituted.
iii. To determine the processes of production of Nigerian breweries.
iv. To find out how the Nigerian breweries cope with the management of its inventories.
v. To maker recommendations.
1.4 RESEARCH QUESTIONS
i. To what extent is the installed capacity Nigerian breweries utilized?
ii. How are raw materials used in the production processes sourced and substituted?
iii. How does the Nigerian breweries cope with the management of its inventories?
1.5 HYPOTHESIS FORMULATION
HYPOTHESIS ONE
i. H0: The company’s process planning and design does not take place by the advice of the technical partners alternatives.
H1: The company’s process planning and design does not take place by the advice of the technical partners alternatives.
ii. H0: The installed capacity is not highly alternative.
H1: The installed capacity is not highly alternative.
1.6 SIGNIFICANCE OF STUDY
The significance of this study this to analyze and evaluate the process of production and capacity utilization in Nigerian breweries as its seeks to achieve a high degree of efficiency of product. This study also analysis various resources needed in production process and factors affecting its growth tends to attract the increasing interest of economist, industrialist and statisticians in research. Prior to the attempt to analyze was and methods by which efficiency or effectiveness of production are determined by and problems of its evaluation as mathematically concerned. It is important to give at least brief but well concerned concept applicable to the topic under review. There are many concept of efficiency. The term has practical significance not only in economics but also in sociology, ecology and other branches of science. The content of its study in a particular area of study.
A research into production and capacity utilization is necessary because man’s existence on earth cannot be assured with production. Effective utilization of resources leads to less wastage of resources and elimination of the facilities. The research consider it important to carry out an investigation on the processes of production and capacity utilization because of its importance in an organization.
1.7 SCOPE OF THE STUDY
The researcher intends to under study the production process and capacity utilization of the Nigerian breweries PLC Enugu. The Nigerian breweries is a very big company with network of branches in some part of the federation carrying out a study. In all the Nigerian breweries as a whole will be very time consuming and cumbersome that is it will entail traveling some parts to obtain facts about the Nigerian breweries. Hence the research tried to cover production processes and capacity utilization in the Nigerian breweries PLC Enugu.
1.8 LIMITATION OF THE STUDY
A study of this magnitude and scope could not be carried out without encountering problems that tend to hinder the progress of the volume that would have been covered by the researcher. They are FINANCE and TIME. These problem ranges from personal to environmental constrains.
A look at these problems will only tell so much about our levels of under development.
1.9 DEFINITION OF TERMS
Optimization- Process of achieving the best thinking and doing.
Capacity- This is the ability of an organization to contain or hold the needs and wants of its prospective customers.
Utilization-This is ability of a firm to make use of its available resources to produce goods and services for the satisfaction of human needs and wants.
Productivity- Is the rate of efficiency of work done that is the output per unit of a factor of production.
Installation- This is the processes of position new product in an organization with the aim of making profit.
Integrate- This is the act of combine difference factors or parts to make a whole.
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