Impact of Production Planning and Control on Operational Cost in Manufacturing Industry
CHAPTER ONE
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:
- To examine the effect of production planning and control on operational cost of Seven up bottling company.
- To examine the effect of production planning and control on profitability of Seven up bottling company.
- To examine the effect of production planning and control on organizational effectiveness and productivity of Seven up bottling company.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Introduction
The In the wake of 2008, the world experienced a depression which led to the global economic meltdown. As stated by Eleanya (2009), the European, American and Asian States did not just relax and watch the meltdown wreck the economy. He explained further that even in West Africa, a country like Ghana with her very limited resources did not relax in the face of the meltdown. Every little effort put forward by these countries to revamp their manufacturing sectors yielded fantastic result, either by the public, private or both sectors. The reverse is the case in Nigeria, where huge amount of the peoples’ resources have been pumped into the manufacturing sector and no visible result is recorded. Instead the sector is seriously declining. 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. The process of developing this kind of relationship between market demands and production capability is the function of production planning (PP) which has been described 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. PP can be effected principally through the management of workflow, inventories and backlogs, and changing levels of operation (Winston, 2004; Hillier and Lieberman, 2005; Jain and Aggarwal, 2008). Buffa (1975) had maintained that this tool is indispensable in any firm irrespective of size and complexity. Perhaps it is with the understanding and application of this basic tool that advanced countries had contained the global economic crisis that would have ravaged their economies. Production is a process or procedure developed to transform a set of inputs like men, materials, capital, information and energy into a specified set of output like finished products and services in proper quantity and quality, thus achieving the objectives of an enterprise’ (Vollman et al, 2007; and Jain and Aggarwal, 2008). The production system likewise is the design process by which elements are transformed into useful products. A process then is an organized procedure for accomplishing the conversion of inputs into output. Production is effective if an appropriate and efficient PP technique is in place. It is the understanding, design and application of this technique that form the focus of this research in the Nigerian manufacturing industry. If the manufacturing sector of the Nigerian economy is seriously declining in its contribution to GDP, then there is probably the problem of understanding, design and application of PP in the Nigerian economy-especially in the real sector where manufacturing is predominant. This research looks at existing models and techniques such as linear programming and other mathematical programming models, to find out if they are applied anywhere in the industries under study. The study also sought to establish how suitable such models must have been in the context of the Nigerian economy.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to investigate the impact of production planning and control on operational cost in manufacturing industry.
Sources of data collection
Data were collected from two main sources namely:
Primary source and
Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the impact of production planning and control on operational cost in manufacturing industry
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of production, planning and control of operational cost in manufacturing sector.
Summary
Production scheduling serves to boost production planning and control. It brings about smooth flow of work throughout the production cycle, prevents conflicts and delays in the use of productive resources and determines the expected time for the arrival of supplies and the shipping of finished products at minimum costs. In this research work, it was gathered that production scheduling has a low influence on equity capital of Nigerian manufacturing firms. Increasing the scheduling of production activity results in increases in equity capital. The absence of a significant influence of production scheduling, could be attributed to lack of adequate attention given to production scheduling by production managers. Scheduling is not an end in itself but a means to an end. It boosts production planning and control for improved performance. Our findings in this study offer support to Olarenwaju (2010) and Poterba (2006). Olarenwaju (2010) affirms that in order to enhance productivity in Nigerian public service, adequate attention must be given to proper work scheduling by public administrators. This is equally applicable to private sector organizations. More so, Poterba (2006), had asserted that the end result of undermining work schedule in business organization is inefficient operations, low sales revenue and lack of business growth.
Conclusion
With production planning, a firm can meet customer requests for delivery times when feasible, meet the present goals for inventory levels, and minimize per unit cost of production. We observed in this study that production planning is a veritable weapon for improved productivity performance in Nigerian manufacturing firms. It was gathered that 56.5% variation in growth is accounted for by variations in production planning. Our findings do not differ significantly from prior studies such as Olusegun and Adegbuyi (2010); Everette (2006), Higgins (2001) and Weimer (1999). Olusegun and Adegbuyi in their study revealed that a significant relationship exist between production planning operations and organizational output, though not in the Nigerian manufacturing sector. Everette (2006) reported that forecasting future demand of a firm’s product helps to eliminate any form of disruption to meet expected demand, which consequently enhances profitability and shareholders worth of the business. Higgins (2001) observed that firms with effective production planning system outperform those with an adhoc approach to production operations in around performance measures. Weimer (1999) revealed that productivity is significantly low when there is lack of production planning operations which may result from wastages, error in product design and rework. Consequently, it is safe to say that productivity can be significantly enhanced with adequate production planning operations in Nigerian manufacturing companies just as is the case with companies in developed societies, as reported by the studies cited above.
Recommendations
Haven completed the study, the following recommendations were proposed by the researcher;
Since production planning enhances corporate productivity performance, Nigerian manufacturing firms must with seriousness be involved in effective and formal planning of production activity and its implementation, irrespective of the size and age of the firm. Nigerian manufacturing firms should embrace the application of advanced manufacturing technology, such as automated production technology, computer assisted design and manufacturing (CAD/CAM), robotics and flexible, manufacturing systems. To ensure effective application of advanced manufacturing technology in the Nigerian manufacturing industry, professionals with high technical knowhow should be hired by the organization and effective training programmes should be organized for the organizational members who are to be affected by the technological advancement.
Reference
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- Agbadudu A.B. (1996) Elementary Operations Research 2, Benin: Mudiaga Press
- Anwuluorah, M. C. (1987): “Surveys and when is a survey best in Social Research and Information Gathering” in Ugwuegbu, D.C.E. and Onwumere, S. O. (ed) Social Research and Information Gathering, (Lagos, F. G. Printers) p.17 – 27.
- Bestwick, P. P. and Lockyer, K. (2008) Quantitative Production Management, London: Pitman
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