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AN EVALUATION OF
PRODUCTION PROCESSES AND CAPACITY UTILIZATION
CHAPTER ONE
INTRODUCTION
The result of the tendency of people to consume is to
increase the capacity of production in the various aspects of human need. There
arose the separation of management from ownership in this production function.
A further development is the growth, organizational complexity and size, thus
large organizations, management is divided into production, personnel
management and finance as well as marketing. Other specifications are made as
organizations need for them arises.
Production
management is essential and basic to all organizations whether it is
manufacturing or service. It should be pointed out that the survival of
organization is dependent on how its production processes are managed. Barry
Shord explains operations management in his book thus “any organization which
transforms inputs into output is engaged in production”.
Percentage of
capacity utilization measure relate output measures to inputs.
The brewing industry in Nigeria has passed through a stage of
total importation of a foreign products to stage where some beer manufacturing
companies now source their raw materials locally.
BARRY SHORE: Operations Management MC Graw Hill,
International Company 1985 pg.30
1.1
BACKGROUND OF THE STUDY
Nigerian Breweries Plc was incorporated first as Nigerian
Brewery Limited on the commencement of operations in a second Brewery in Aba in
1957. In accordance with the Companies and Allied Matters Act of 1990, the name
was again changed to Nigerian Breweries Plc. Since the formal incorporation in
1946, 50 momentous years that saw the company grow from its modest beginnings
into the giant company that it is today. The company now does five (5)
breweries from which our highly refreshing quality brands are distributed to
all the nooks and crannies of this great country.
The company
of my case study, Nigerian Breweries Plc has kept pace with the key
international developments, thus ensuring that our systems, processes amd
operational procedures are always in conformity with proven best practices in
the most parts of the world. This has been evident in the vision and
professionalism demonstrates in the way
the business has been managed in the past 50 years.
The company now has a portfolio of five high quality brands:
Star, Gulder, Maltina and Amstel drinks
and Legend Extra stout. Together they have facilitated leadership position in
the total brewed products markets in Nigeria. The outstanding quality and
consumer franchise complement other companies and capabilities to set Nigerian
Breweries apart as the house of quality the house that star built.
Alongside, there developments has been a corresponding growth
in the prosperity of company’s shareholders whose funds have appreciated into
values for excess of their original investment. They have also had the good
fortune of reaping excellent dividends on these blue chips shares year on –
year.
1.2
STATEMENT OF THE PROBLEM.
Productivity in this country Nigeria as a matter of fact is
low and as such it is described as a developing economy, in countries have
developed economies. In view of this, the research is set to examine the
following problems:
1. What
is the extent of the utilization of the installed capacity in Nigerian
Breweries Plc?
2. What
are the resources of raw materials used in the production process in Nigerian
Breweries Plc?
3. What
are the steps in the production process of Nigerian Breweries Plc?
4. How
are the inventories managed in Nigerian Breweries Plc and what are the
inventory management policies of the company?
1.3 PURPOSE
OF THE STUDY.
The purpose of the research work are as follows:
(1) To
ascertain the extent to which the installed capacity of Nigerian Breweries Plc
is utilized.
(2) To
examine how the raw materials used in the production processes are sourced and
sustained.
(3) To
determine the process of production of Nigerian Breweries Plc.
(4) To find
out how the company of study copes wit the management of its inventories.
(5) To make
recommendations.
1.4 SCOPE OF
THE STUDY.
The study is based on the Nigerian Breweries Plc Enugu and
our data will be collected their. Therefore, the survey will specifically
broaden on planning and controlling techniques and it is hoped that results
arrived will be true of the Nigerian Breweries Plc Enugu.
However,
controlling system in profit seeking organizations are highly developed because
of clear organization goals or objectives dominance by professional and
difficult in the measurement of standard. As a result, budgeted expenditure
(standard expenditure) will be used to compare actual performance (actual
expenditure) using the programme planning and budget system.
This study like every other human academic quest is faced
wifth problems of inadequacy of every resource.
Taking into
account the academic standard of the researcher, the scarcity of information
and unavailability of certain sophisticated control system in companies. This
work will discourse only the easier and a standard of a students in the project
writer status.
1.5 RESEARCH
HYPOTHESIS
Null Hypothesis
Ho: The company’s
process planning and design does not take place by the advice of its technical
partners.
Alternatives
Hi: The company’s
process planning and design take place by the advice of its technical partners.
Null
Hypothesis Ho: The level of product /
services quality is not high
Alternative
Ho: The level of
product / services quality is high
Null
Hypothesis
Ho: Capacity
utilization is not slightly above average.
Alternatives
Hi: Capacity
utilization is slightly above average
1.6
SIGNIFICANCE OF THE STUDY
The significance of this study is to analyse and evaluate the
processes of production and capacity utilization in Nigerian Breweries Plc as
it seek to achieve a high degree of efficiency of production. In a world of
dwindling ventures questions revolving on efficiency of production and factors
effecting its growth tends to attract the increasing interest of economists,
industrialists and statisticians and researchers.
Prior to the
attempt to analyse ways and methods by which efficiency or effectiveness of
production are determined by and problems of its evaluations as mathematically
conceived. It is needful to initially give at least a brief but well conceived
concept applicable to the topic under review.
There are needed many concepts of efficiency. The term has
practical significance not only in economics but also in sociology, ecology and
other branches of science. The contents of its study on a particular are of
study.
A
research into production and capacity utilization is necessary because man’s
existence on earth cannot be measured with production. Effective utilization of
resources leads to less wastage of resources and elimination of idle
facilities.
The research
deems it pertinent and important to carryout an investigation of the processes
of production and capacity utilization because of the aforementioned importance
of production.
1.7
LIMITATIONS OF THE STUDY.
A study of this magnitude and scope could not be carried out
without encountering problems that tends to hinder the progress of the study or
the volume that would have been covered by the researcher. These problems range
from personal to environmental constrains. A look at these problems will only
tell so much about our level of under development.
FINACE
As a result of serious constraints of finance, the researcher would have done a
critical comparative study of the firms
narrow the study down to Nigerians Breweries Plc with its factory here too. The
financial constrains in this regard bordered a little far away from the base of
the researcher.
TIME.
Time was another problems encountered by the researcher so as
he had to be doing the balancing act of missing her lectures so many days in
search of data of Enugu and other places. Nigerians Breweries Plc being a
public limited company operated between Mondays and Fridays and these are days
of normal lectures go on in the campus. This created a great deal of problems
for the researcher.
Also, in relationship to the time constrains, the researcher
sometimes made futile moves at getting at the respondents who either
complanined of being too busy to attend to the researcher or weren’t on seat.
RESPONDENTS.
Some of the respondents were not forthcoming with the
information required by the researcher. The interview respondents hoarded
information that they considered sensitive to the researcher for fear that such
could get intof the hands of their competitors. They added that if they
consider the information non-sensitive they might release such to their researcher.
Attempts by
the researcher to convince the respondents that the exercise was purely
academic proved abortive. However, he was able to continue with the much he was
given.
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