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AN EVALUATION OF
PRODUCTION PROCESS AND CAPACITY UTILIZATION
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.
CHAPTER ONE
1.0
INTORDUCTION
1.1 BACKGROUND OF
THE STUDY
Production management refers to those activities involving
planning, organizing, directing, integrating, controlling and evaluating the
entire process of manufacturing goods or providing services at the right cost
and in its right time, quantity, quality the place. Production management is
about the way organizations produces goods and services. For instance,
everything you wear, eat, sit on, use, read of knock about on the sports field
comes to you courtesy of the production managers who organized its production.
Every book you borrow from the library, every treatment you receive at the hospital,
ever service you expect in the shops and every lecture you attend at school all
have been produced. While the people who supervised their production may not
always be called production managers that is what they really are. And that is
what this research is concerned with the tasks, issue and decisions of those
production managers who have made he services and products on which we all
depend. Production management is concerned with the organization of the use of
the equipment and other resources. Production management is the utilization of
the highest productive resources at the least cost. Dr. E.U.L. Imaga said that
the performance of the managerial activities entailed in selecting, designing,
operating, controlling, and updating productive system”. Having defined
production management it should be pointed out that production first like any
other field of study has or many definitions as there are participants in the
field.
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.
FUNCTIONS OF PRODUCTION MANAGEMENT
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
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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