THE IMPACT OF PRODUCTION PLANNING AND CONTROL ON OPERATIONAL COST OF THE MANUFACTURING INDUSTRY (A Case Study of Nigeria Bottling Company Plc,)

CHAPTER ONE

GENERAL INTRODUCTION

1.0   INTRODUCTION                 

Production planning and control are term that though commonly used have witness a lot of changes both in meaning and scope in the past few years.  For example based on the extended view of production to include the provision of all sort of service production both as a discipline of study and as a profession can now be practiced in all king of organization.

As in other fields of management planning and control from the primary function of production management.  It is for this reason that the research has decided to take a critical look at production planning and control as practiced in beverage industrial sector of the Nigeria economy.

This is informed by the variety of major product and beverage produced in the industry as exemplified by the Nigerian Bottling Company (NBC) Kaduna.  Production can be regarded as the centre focus of any manufacturing concern.  It is the stage where the real action takes place that is the transformation of raw materials (inputs) into finished products (outputs).  The planning and control operations are necessary because in every manufacturing unit there are people, machine and material.  There is the need to plan all expensive resources required for production in order to make effective use of them and maximize profit making for the organizations

Modern production is complex hence both technologically related operation and administrative activities must therefore be planned carefully to make account of all the possible restriction constraints and advantages.  In planning to meet orders at less cost is the objects of production planning.

Production planning involves not only types of operation to be used but the order of these operation as well as a time of duration the operation should take and how the plan should be laid out.

This maiden chapter consider the background setting of the study.  It defines the problem and objectives of the study.  The hypothesis are formulated and the scope and limitation of the study defined.  The chapter end with the significance of the study stated and key term defined.

1.1   BACKGROUND SETTING OF THE STUDY

Coca-cola is the world leading manufacturer of soft drinks sold in more than 145 countries.  A total of 250 million bottles are consumed every day in all parts of the globe from Canada in the north to Argentina and new zeal end in the South from Alaska to china from Mexico to Nigeria.  Coca-cola first came to Nigeria in 1953 when Nigeria Bottling Company set up the first plant in Lagos A.J. Leventist brought Coca-cola to Nigeria and he is the owner of Nigerian Bottling Company (NBC).  The first plant was built in Apapa, Lagos while Coco-cola Company was established in Kaduna in the year 1976 when bottling commenced.  It was to the beginning of an exciting story of growth and development particularly during the last 10 years of the 20th century.

Nigerian Bottling of soft drink selling more than 6 million bottles per day this figure which is still growing with the continuing expansion of the existing 12 plants and the opening of brand new plant in various parts of the federation.  Fanta by far the number one best seller in the orange segment and sprite is the most widely sold lemon lime drink in Nigeria other products bottled by NBC include Fanta ginger Ale, Fanta tonic, Fanta soda club soda and crest bitter lemon.

The success of Coca-cola has brought with it the development of a number of sister industries all contributing to the growth of the Nigerian economy the Delta Glass Company Ughelli which supplies million required to keep a large bottling company in operation and the crown product factory in ijebu-ode and Kano which manufacture the metal crown to seal the bottle.

The Benin plastic company which make the plastic crates for carrying the bottles in addition, the trucks which are familiar in many parts of the country delivering soft-drinks to more than sixty thousand dealers are sold assembled in Nigeria.  Nigerian Bottling Company is also the largest manufacturer of Co2 in the country used for carbonating your favourite soft drinks, Nigeria Bottling is all fields of operation.

1.2   STATEMENT OF THE PROBLEMS

The success of our present day industries depend on how to manage our resources and to enhance growth and development for the better industrialization.  Therefore, this research work is concerned with identifying and proffering remedies to the problems of production planning and control in the manufacturing company.  To this end, the following question occupy our mind as problem before the research.  What role does the choice of production planning and control play in the beverage industry.

Also the researchers want to know the reason why planning and control is very important and useful in every manufacturing company.

Lastly, the researchers want to analyze the level of development through the impact of production planning and control by means of planning and control.  Based on the above, there are need to rectify the problem of lack of planning and control and the general weak attitude towards planning and control (organization especially the beverage activities.

RESEARCH QUESTIONS

1. What is the impact of production and control to operational cost in manufacturing sector?
2. What are the problems that are likely to occur if production planning and control is not taken into consideration at the nearly stage of production process.

1.3   OBJECTIVES OF THE STUDY

The main purpose of this study is to full of the basic requirement for the award of a Higher Diploma certificate in production and operations management studies Kaduna Polytechnic Kaduna.

Secondly, the study aims to examine the theory and practice of production planning and control in manufacturing company that deals with the production beverage.

Furthermore, the study is aimed at examining the effectiveness of the application of production planning and control techniques and its impact or otherwise for growth of the company, more specially the research shell dwell on the relevance of production planning and control to the operational cost and expenses in organization.  Conclusively, efforts shall be made to give recommendation necessary.

1.4   HYPOTHESIS

This research work is specially designed to test the following hypothesis.

Ho – effective production planning and control does not significantly reduce operational cost in manufacturing company.

Hi – effective production planning and control significantly reduces operational cost in manufacturing company (NBC) Kaduna.

1.5   SCOPE AND LIMITATION OF THE STUDY

This research covers the historical life cycle of coca-cola from the year 1953 to 2003 specially the study concentrates on the Kaduna plant.  Its area of interest is the manufacturing or industrial sector of Nigeria economy in the field of management studies the research examines the concept of production planning and control as it affects operation cost.  The research used NBC coca-cola as its case study.  The main problem of any kind of research work is the financial constraint that is one of the major thing that affect the quality of the research work, this is due to the escalating price of stationeries and transportation cost of data acquisition.

Limitation is likely difficulties that may impair the quality of research work.  One limitation to good quality of the research work is uncooperative attitude to some management personnel in granting access to relevant information and documents that is vital to the research.

Time factor: – this is essential for the success of any research work.  The need for thoroughness and accuracy demands a considerable length of time.  But the available time is short and the researcher has to attend lectures as well as other assignments.  Despite this, the research will meet the demand of users.

1. 1. SIGNIFICANCE OF THE STUDY

This is trying to highlights more on the aims and objectives why the study is being carried out.  First to know the basis of the study and to look at the issue of production planning and control that has being taking place at (NBC) to know each individual process that make it possible.  One bottle of soft drink what it takes from the beginning to the end to step and details of the whole process.

Hence, the research is relevant to the workers of NBC student of the production management and transformation in its fields of production and operations management.

1.7   DEFINATION OF KEY TERMS

        NBC -       Nigeria Bottling Company

CBM -       Condition Base Maintenance

EXIM       -       Excellence in Maintenance

QAD -       Quality Assurance Department

SLP  -       Safety and Loss Prevention

PRODUCTION SCHEDULE

This master production comes next in the sequence of sevents to produce products and services.  It is proceeded by demand forecast and a production plant.

        BATCH PRODUCTION

The batch production which is much like continuous manufacture of the processing kind you find it in making or preparation of foods, paper, glass, rubber and even steel.

PROCESS LAYOUT

Characterized by situation in which similar machines and services are located together.

LINE LAYOUT

Are production in which the product moves down in a line  pass successive work station where one operation after another is done.

INTERMITTENT PRODUCTION

This where physical facilities must be flexible enough to handle a wide variety of product and size.  The basic nature of activities imposes change of the design.

INVENTORY

This is keeping track of stock of materials needed for work at any given point in time i.e. use of operation of the business.