THE IMPACT OF PRODUCTION PLANNING AND CONTROL ON OPERATIONAL COST OF MANUFACTURING INDUSTRY IN NIGERIA (A CASE STUDY OF SEVEN-UP BOTTLING COMPANY)


THE IMPACT OF PRODUCTION PLANNING AND CONTROL ON OPERATIONAL COST OF MANUFACTURING INDUSTRY IN NIGERIA (A CASE STUDY OF SEVEN-UP BOTTLING COMPANY)    

Abstract:

Production planning and control is simply the analysis involved in transforming raw material or components into finished products, integrated synergistically to reduce waste in time and finance with maximum obtainable profit. With reference to services (intangible), production is the discharge of a function with some degree of utility, which for goods (tangible) production is viewed as the fabrication, interchange and re-use of physical objects through machines, human resources and any other pertinent applicable tools (Bartak, 1999).

This research project is thus a search for impact of production planning and control on operational cost of manufacturing industry in Nigeria in seven up bottling company.

Chapter one of the study lays a theoretical framework for subsequent chapters.  Following the general introduction, the problem statement and the objective of the study which provided basis for the significance of the study and the hypothesis were stated. The limitation of this study were also highlighted.

In the literature review as contained in chapter two, works of various authors, international and local journals were reviewed to elicit views on the impact of production planning and control on operational cost of manufacturing industry in Nigeria in seven up bottling company.

Chapter three, research methodology, description of population and sampling procedure for data collection were discussed. Methods of questionnaire design, determination of sampling size and questionnaire distribution were also highlighted.

Chapter four was based on analysis of data collected. This chapter was sub-divided into data analysis, hypothesis testing and summary. Percentage table, figure and narration were carefully employed for proper understanding and testing of hypothesis.

Finally, chapter five was divided into summary of findings, recommendation and conclusion.

The outcome of this study will therefore educate the manager of industries and other stakeholders in the manufacturing sector on ways by which production planning and control can drastically reduce the operational cost in an industry.

TABLE OF CONTENTS

Title Page    -    -    -    -    -    -    -    -    -    i

Approval Page    -    -    -    -    -    -    -    -    ii

Declaration    -    -    -    -    -    -    -    -    iii

Dedication    -    -    -    -    -    -    -    -    -    iv

Acknowledgement    -    -    -    -    -    -    -    v

Abstract    -    -    -    -    -    -    -    -    -    vi

Table of Contents    -    -    -    -    -    -    -    vii

CHAPTER ONE – INTRODUCTION

1.1    Background of the Study    -    -    -    -    -   

1.2    Statement of General Problem    -    -    -    -   

1.3    Objective of the Study    -    -    -    -    -    -   

1.4    Research Questions    -    -    -    -    -    -   

1.5    Hypothesis   -      -      -      -      -      -      -        -        -        

1.6    Significance of the Study    -    -    -    -    -   

1.7    Scope of the Study    -    -    -    -    -    -   

1.8    Definition of Terms    -    -    -    -    -    -   

CHAPTER TWO – REVIEW OF RELATED LITERATURE

2.1    Introduction    -    -    -    -    -    -    -    -    -

2.2    Theoretical Framework    -    -    -    -    -    -    -

2.1.1    Inventory theory -    -    -    -    -    -    -    -    --

2.2    Conceptual Framework-    -    -    -    -    -    -    -    -

2.2.1    Concept of production planning-    -    -    -    -    -    -   

2.2.2    Concept of production control-    -    -    -    -    -    -    -   

2.2.3    Impact of production planning and control-    -    -    -    -    -   

2.3    Empirical review of literature-    -    -    -    -    -    -    -   

2.4    Summary-    -    -    -    --    -    -    -    -    -   

CHAPTER THREE – RESEARCH METHODOLOGY

3.1    Introduction    -    -    -    -    -    -    -    -    -

3.2    Research Design    -    -    -    -    -    -    -    -

3.3    Area of the Study    -    -    -    -    -    -    -    -

3.4    Population of Study    -    -    -    -    -    -    -    -

3.5    Sample size and Sampling Techniques    -    -    -    -    -

3.6    Instrument for Data Collection    -    -    -    -    -    -

3.7    Validity of the Instrument    -    -    -    -    -    -    -

3.8    Reliability of the Instrument    -    -    -    -    -    -

3.9    Method of Data Collection    -    -    -    -    -    -    -

3.10    Method of Data Analysis    -    -    -    -    -    -    -

CHAPTER FOUR – DATA PRESENTATION AND ANALYSIS

4.0    Introduction    -    -    -    -    -    -    -    -    -

4.1    Data Presentation and Analysis    -    -    -    -    -    -

4.2    Characteristics of the Respondents    -    -    -    -    -

4.3    Data Analysis    -    -    -    -    -    -    -    -    -

4.4    Testing Hypothesis    -    -    -    -    -    -    -    -

4.5    Summary of Findings    -    -    -    -    -    -    -    -

4.6    Discussion of Findings    -    -    -    -    -    -    -

CHAPTER FIVE – SUMMARY, CONCLUSION AND RECOMMENDATION

5.0    Introduction    -    -    -    -    -    -    -    -    -

5.1    Summary    -    -    -    -    -    -    -    -    -    -

5.2    Conclusion    -    -    -    -    -    -    -    -    -    -

5.3    Recommendations    -    -    -    -    -    -    -    -

    References -    -    -    -    -    -    -    -    -    -

Appendix    -    -    -    -    -    -    -    -    -    -

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

Production planning and control is simply the analysis involved in transforming raw material or components into finished products, integrated synergistically to reduce waste in time and finance with maximum obtainable profit. With reference to services (intangible), production is the discharge of a function with some degree of utility, which for goods (tangible) production is viewed as the fabrication, interchange and re-use of physical objects through machines, human resources and any other pertinent applicable tools (Bartak, 1999).

The objectives of production planning can be summarized and is to provide the capacity and production to meet agreed or projected demand, ensure timely and positional availability of materials and components, provision of a steady flow of work through all departments, provide a balanced work between various departments involved in production operation, make available adequate manufacturing instructions to enable proper management, and supervision and records and Provide adequate information to arrest failure and delay (Pounds, 1999).

Planning is a continuous process which involves decisions or choices, about alternative ways of using available resources with the aim of achieving a particular product at some time in the future (Silver, Pyke& Peterson, 1998). The relatedness of production planning to effective operation in any organization has been indicated and recognized as enhancement to organizational output and reduced operational cost.

For many manufacturers the task of meeting the ever rising demand and customer expectations and lowering operational costs in an environment of more products, more complexity, more choice and competition is placing great stress on the effectiveness of their planning of activities in the production process (Pounds, 1999). Organizations have already adopted solutions with vary degrees of planning and controlling capabilities. Yet, operation executive acknowledge that these same systems are becoming out dated, lacking the speed, flexibility and responsiveness to manage their increasing complex production environment.

Effective production planning and controlling is vital to the success of every manufacturing business. Regardless of the industry, finding the best way to purchase, allocate and utilize the production resources to efficiently satisfy the customers while minimizing operational costs is a constant challenge (Banjoko, 2005). But, without the right production planning and control, it is near impossible.

The process of production planning is central to the success of any manufacturing company. In general terms, the production planning process involves generating a plan to satisfy customers in a manner that results in a reasonable profit. The specifics of the production plan should vary company to company, and industry to industry. Production planning is an important part of the process for manufacturing firms. The organization of production relies in general on the implementation of a certain number of basic functions, among which the control function plays an essential role. Magee (2006) emphasized the interrelationships between these two important production management activities. Irrespective of organizational status, it is generally recognized that production planning and control, are closely interrelated. In theory, problems are frequently classified according to type of problems, example distribution, queuing or sequencing. However, real industrial problems often do not fit into rigid categories. Production control is a unifying problem closely related to other areas within an organization such as sales, cost control, purchasing, capital budgeting and inventory management (Pounds, 1999).

Control is the establishment of starting and finishing dates for productive activities (Rago, Huisman&Wagelmanss, 2003). Under certain conditions, control may also determine the sequence of operations and/ or the assigned workload on certain equipment. For example, as the size of the control matrix increases, (i.e., more orders to be assigned to a larger array of machines) the number of possible combinations of routings increases exponentially.

Control concerns the allocation of limited resources to tasks over time. McKay, Kenneth & Vincent (2006) explained “Production control is concerned with the allocation of resources and the sequencing of tasks to produce goods and services. Although allocation and sequencing decisions are closely related, it is very difficult to model mathematically the interaction between them. However, by using a hierarchical approach, the allocation and the sequencing problems can be solved separately. The allocation problem is solved first and its results are applied as inputs to the sequencing problem. The resource allocation problem can sometimes be solved using aggregate production planning techniques. However, the accomplishment of the control function should not generally imply that rank orders have been set or specific machine loads determined. The term control is often used to describe the sequencing situation. Control should be reserved for procedures which give the time of arrivals units requiring service. Sequencing is defined as determining the order in which items are processed. The control of complex activities, particularly when job process times are short, does not explicitly determine the order of work for manufactured items. Control–sequencing problems are, therefore, concerned with determining both the time that the order processing is completed and the rank order, that is, the sequence of order processing.

Production control has three goals or objectives. The first involves due dates and avoiding late completion of jobs. The second goal involves throughput times; the firm wants to minimize the time a job spends in the system, from the opening of a shop order until it is closed or completed. The third goal concerns the utilization of work centres. Firms usually want to fully utilize costly equipment and personnel. Often, there is conflict among the three objectives. Excess capacity makes for better due – date performance and reduces throughput time but wreaks havoc on utilization. Releasing extra jobs to the shop can increase the utilization rate and perhaps improve due date performance but tends to increase throughput time.

Vollman, William & Clay (1997) noted that the production control is derived from the production plan; it is a plan that authorized the operations function to produce a certain quantity of an item within a specified time frame. In a large firm, the production control is drawn in the production planning department, whereas, within a small firm, a production control could originate with a lone production controller or even a line supervisor.

Operational costs are expenses associated with the maintenance and administration of a business on a day-to-day basis. The operational cost is a component of operating income and is usually reflected on a company’s income statement. While operational costs generally do not include capital outlays, they can include many components of operating a business including accounting and legal fees, bank charges, sales and marketing costs, travel expenses, entertainment costs, non-capitalized research and development expenses, office supply costs, rent, repair and maintenance costs, utility expenses, salary and wage expenses.

The Seven-Up bottling company Plc is one of the largest independent manufacturer and distributor of the well-known and widely consumed brands of soft drinks in Nigeria. The brands are Pepsi, 7UP, Mirinda, Teem and Mountain Dew, which is produced and marketed in all its present 9 manufacturing plants. The company also markets its products through its over 200 distribution centres that is also call depots spread over the nooks and crane of Nigeria. The workforce is currently in the neighbourhood of 3500 employees. A Lebanese Mohammed El-khalil who came to Nigeria for the very first time in 1926 founded the company. Mohammed is the father of the company's current chairman Faysal El-Khalil. The company metamorphosed from a very successful transport business [El-Khalil Transport] in a bid to diversify the then largest transport company in the entire West of Africa. On October 1st 1960, the exact day the great country Nigeria won her independence, Nigerians also experienced the birth of a soft drink giant as the first bottle of 7Up rolled out from the factory located in Ijora. Since then, the company continued to grow in the leap and the bound.

1.2    STATEMENT OF THE PROBLEM

Jain and Aggarwal (2008) state that, every manufacturing activity requires resource input in terms of men, materials, money and machines. They went further to state that in any business that produces a product or service production activity must be related to market demands as indicated by the continuous stream of customers' orders. It follows therefore that for maximum effectiveness, this must be done in such a way that customers’ demands are satisfied, but at the same time production activities are carried on in an economic manner. However, the researcher is of the opinion that the process of developing this kind of relationship between market demands and production capability must be the function of production planningwhich has been described by several researchers as the predetermination of manufacturing requirements of such things as available basic materials, detailed equipments, production runs, order priority, money, man and production process within the scope of the enterprise for efficient production of goods to match its sale requirements. Controlcan be effected principally through the management of workflow, inventories and backlogs, and changing levels of operation (Winston, 2004). It is on this note that the researcher is examining the impact of production planning and control on operational cost of manufacturing industry in Nigeria with specific focus on the Seven up bottling company.

1.3    OBJECTIVES OF THE STUDY

The general objective of this study is to examine the impact of production planning and control on operational cost of Seven up bottling company in Nigeria while the following are the specific objectives:

1.    To examine the effect of production planning and control on operational cost of Seven up bottling company.

2.    To examine the effect of production planning and control on profitability of Seven up bottling company.

3.    To examine the effect of production planning and control on organizational effectiveness and productivity of Seven up bottling company.

1.4    RESEARCH QUESTIONS

1.    What is the effect of production planning and control on operational cost of Seven up bottling company?

2.    What is the effect of production planning and control on profitability of Seven up bottling company?

3.    What is the effect of production planning and control on organizational effectiveness and productivity of Seven up bottling company?

1.5    HYPOTHESES

HO1: There is no significant relationship between production planning/control and operational cost in seven up bottling company.

HO2: There is no significant relationship between production planning/control and profitability in seven up bottling company.

HO3: There is no significant relationship between production planning/control and organizational effectiveness/productivity in seven up bottling company.

1.6    SIGNIFICANCE OF THE STUDY

The outcome of this study will educate the manager of industries and other stakeholders in the manufacturing sector on ways by which production planning and control can drastically reduce the operational cost in an industry. It will also educate on the effect of production planning and control on organizational effectiveness, profitability and productivity. This research work will constitute a body of literature to the existing scholarly materials on the impact of production planning and control on operational cost to help strengthen and promote organizational development.

1.7    SCOPE/LIMITATIONS OF THE STUDY

This study is limited to the staffs of seven up bottling company, Benin factory in Edo State. It will also cover the effect of production planning and control on operating cost of manufacturing, productivity, profitability and organizational effectiveness.

Other limitations includes

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.8    DEFINITION OF TERMS

Planning: the process of making plans for something.

Production: the action of making or manufacturing from components or raw materials, or the process of being so manufactured.

Operation: the fact or condition of functioning or being active.

Control: the power to influence or direct people's behavior or the course of events.

Manufacture: make (something) on a large scale using machinery.

Cost: estimate the price of an operation

REFERENCES

Banjoko S., (2005) Production and Operation Management, 1st, Edition, Wisdom Publishers Limited, Ibadan.

Bartak R, (1999). ‘Model for Parallel Planning and Controlling’. New Trends in Constraint 12, pp 237-255.

Jain K. C.; and L, N. Aggarwal (2008) Production Planning, Control and Industrial Management, Delhi, Nai-Sarak: Khalma Publishers.

Magee, S. K. (2006). “ Handbook of Production Planning and Scheduling “: Algorithms, Models and Permance Analysis, Chapman & Hall/CRC, Boca Raton, pp. 25-32

McKay, Kenneth N., and Vincent C. S. Wiers, ‘The human factor in planning and scheduling,’ in Handbook of Production Scheduling, J. W. Herrmann, ed., Springer, New York, 2006.

Pounds, R. W. (1999).“ Handbook for Planners “. Volume 1, pp. 56-61.

Rago, F., Huisman, D., Wagelmanss, A., (2003).Models and algorithms for integration of vechicle and crew scheduling. Journal of Scheduling, 6(1), pp. 63-85.

Silver E. A., Pyke D. F., Peterson R., (2008). Inventory Management and Production Planning and Scheduling. John Wiley and Sons Inc, New York.

Vollmann Thomas E., William L. Berry, and D. Clay Whybark, Manufacturing Planning and Control Systems, fourth edition, Irwin/McGraw-Hill, New York, 1997.

Winston, W. L. (2004) Operations Research: Applications and Algorithms, California: ITP Wadsworth Inc

THE MEANING OF PRODUCTION

Production is the central point of any manufacturing concern basically it is the stage where real action takes place either the transformation of raw materials (input) into finished products that is (output) concept of production has been subject to various definition Buffa (1980) define production as the process by which goods and services are created, similarly apple by RC (1996) defined it as the activity of transformation of raw materials or components into finished product.  Whatever the definition, it is clear that production essentially entails the production of goods and service.

The idea of production dates back to the ancient time when human beings conceive modes of productive system.  Beginning with the family hand craft system.  Cummulating to mass production line and automation concept.  Thus production are the unique invention of mankind.  They are the means by which we create goods and services needed from sustain modern society.  The determinants of the production process can never be over emphasized.  If the development of production unit were are accompanied by successive change from job production to batch and finally to follow which stress that manufacturing capacity is only one of the factors which determines the type of production employed Mayer R.R. (1984).   There is a logic behind the operation of the production process, it stems from type of technology involved in the complexity and size of the products as well as in type of production in the particular manufacturing process.

PRODUCTION PLANNING

This is a managerial function that tends to design and plan what to produce, when to produce, where to produce and how to produce the quality, the quantity to produce and for whom to produce. These functions attempts to define the key decision model involved in production that is the long term and the short term planning as well as identifying the procedure, politics and their control a cost effective way wild R (1980).  This function requires action.

STEPS OF PRODUCTION PLANNING

1.     Designing or developing a product that is translating conceived production requirement into form that is capable of being produced or used.  This involve in process of studying consumer need, choice of specific product features, evaluation of alternative design and the final design which establishes a fit between the customer products requirements and technological requirements.

In doing this, action should be taken at certain occasion because customers need which form the basis of product design is subject to change hence the need to change product design.  The change may be induced by change in technology.  Generally when designing a product, room must be allowed for modification of units for the products to meet the general market and customer requirement.  This require close co-operation between the production and marketing department for effective product design or development.

PRODUCTION DESIGN

Having designed or determine a product, the next step in production planning and control is the production design.  This involve considering and evaluating the various alternative design and selecting those designs which generates the least cost. 

Now that the product is designed, the next thing is to determine the basic operation required in the production of the designed product.

DESIGNING PRODUCTION PROCESS

This is a stage in the design process which determines the activities required to produce the desired product. The sequence of operation as well as the equipments tools skill required to carryout the operation effectively.  This is done by taking into action demand forecast and the type of production system, which determines the operation sheets and equipment to be used, to determine the routes sheets in other to know the sequence that will be carried out.

In the process of designing production planning and control, decisions have to be made about whether to produce a product that will serve the need to different customers standard product or whether to eliminate certain tasks or merge several jobs into a single operation (production simplification).  All these are attempts to reduce production cost.  The company must face the problem of making a choice-between alternative process.  Based on the above, it may decide whether to buy all the parts externally or source for it though other means the process to embark upon.  The control and effective co-ordination of the above mentioned stage tends to reduce the cost of production and increase productivity.  The last stage in the planning function, this is the total arrangement of machine work place and storage in the capacities required.  (Plant layout) this refers to the decision on the solution of the type of material handling system and auxiliary service for production such as tool and maintenance shop and for personnel such as medical facility and cafeteria.  The main objective of this function is to develop a production system that meets the requirement of capacity and quality on a most flexible and economical way.  On deciding plant layout, a lot of considerations could be made on the capacity requirement of the proposed plants as this is a primary output to determination of plant machine space requirement.

.

THE IMPACT OF PRODUCTION PLANNING AND CONTROL ON OPERATIONAL COST OF MANUFACTURING INDUSTRY IN NIGERIA (A CASE STUDY OF SEVEN-UP BOTTLING COMPANY)



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET
Researchwap.net is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.net guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.net is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.