An Appraisal Of Distribution System In Brewery Industry (A Case Study Of Nigeria Bottling Company Plc Onitsaha Anambra State)

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An Appraisal Of Distribution System In Brewery Industry (A Case Study Of Nigeria Bottling Company Plc Onitsaha Anambra State)


This research project is intends to explore the appraisal of distribution system in the manufacture industry in Nigeria. I deemed it necessary sine the research topic is unique to industries in Nigeria, an environmental practical research was carried out on Nigeria brewery industry, which was used to generalizing the project objectives. This research work cannot be said to b exhaustive due to changing nature of our industries and it s not design to replace other views or subsequent research on this study objective, but has gone a long way in highlighting the ways to the much advocated efficient in distribution system.

The research project is systematically arranged in 5 chapters, chapter one, deals with the general view, objective of the study and the limitation of the study etc. chapter two deals with the literature review, chapter three is the research methodology. Chapter four deals with the data presentation and analysis of findings. Chapter five is the summary recommendation and conclusion parts.

Table of Content

  • Title Page
  • Approval Page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table Of Contents

Chapter One

1.0 Introduction

  • 1.1 General overview
  • 1.2 Statement of the problem
  • 1.3 Objective of the study
  • 1.4 Significance of the study
  • 1.5 Research question
  • 1.6 Hypothesis
  • 1.7 Scope of the study
  • 1.8 Limitation of the study
  • 1.9 Operation limitation of the study

Chapter Two

Literature Review

  • 2.0 Introduction
  • 2.1 Historical background
  • 2.2 Physical distribution and warehousing
  • 2.3 Inventory location and warehousing
  • 2.3.1 Materials handling
  • 2.3.2 Inventory control
  • 2.3.3 Transportation
  • 2.4 Objective of physical distribution system
  • 2.4.1 Output and input relationship
  • 2.5 Channels of distribution
  • 2.5.1 Direct sales to ultimate consumers
  • 2.5.2 Direct sales to retailer outlets
  • 2.5.3 Selling through wholesaler/agents
  • 2.6 Importance of physical distribution management
  • 2.7 The scope of physical distribution

Chapter Three

Research Methodology

  • 3.0 Introduction
  • 3.1 Research design
  • 3.2 Questionnaire design
  • 3.3 Population/sample selection
  • 3.4 Sources of data
  • 3.4.1 Primary sources
  • 3.4.2 Secondary sources
  • 3.5 Data collection techniques
  • 3.5.1 The survey
  • 3.5.2 Observation
  • 3.6 Method of data analysis

Chapter Four

4.0 Data Presentation and Analysis Of Finding

  • 4.1 Data presentations
  • 4.2 Testing of hypothesis
  • Decision rule
  • Testing of hypothesis two

Chapter Five

5.0 Summary, Recommendation and Conclusion

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Reference
  • Appendix
  • Questionnaires

Chapter One

1.0 Introduction

1.1 General Overview

Production deem not complete until the product gets to the consumers in the high quality, in the right time, at the right place, at the right price at the right quality and in good condition.

Owing to the life rang of industries in Nigeria, it becomes very essential to have efficient distribution system so summer, basically the aim of any industry is to minimize cost and maximize profit in order to achieve this, a firm will have to identify the high cost generating centers and hence try to reduce them. Distribution activities generate cost, the aim of a physical distribution management in industries is to brig to absolute minimal the total cost distribution and the same time ensure effective distribution to achieve high customer services and satisfaction.

The distribution reference to the retailing or selling function means, a vast industry which is composed of many thousands of outlet ranging in size from shop to large departments, departmental stores and cash and carry warehouses, all of which attempt to supply the needs of our customers or consumers.

Physical distribution management is concerned with the movement of raw materials and finished products from the supplier to the manufacture and customer. It is the links between manufacturing and production on one hand and the retailer and customer on the other hand.

According to Drucker a well know management expert, physical distribution management is the last great frontier of cost reduction.

Element of physical distribution management. Physical distribution management is grouped into the following elements:

  1. Transport
  2. Warehousing
  3. Order processing
  4. Administration and inventory control
  5. Receipts and dispatch
  6. Stockholding of inventory
  7. Packaging

The concept of physical distribution is concerned with the relation between all the above elements; since change to any one function will affect those element to a greater or lesser extent. The center for physical distribution management in 1984 analyzed the cost of distribution as an average percentage of sales turnover for all commodities. It is observed that transport cost which include both the truckey movement between a manufacturer and distribution depots and warehouse, and the cost of distribution to retailer are the highest single costs, they nevertheless represent les than half the total distribution cost.

Warehousing the product at various stages in the distribution process in the next most vital cost, but administration and inventory control are also heavy distribution overhead packaging is another very significant element of the total cost.

Companies can loss customers when they fail to make their good available time. The industries, going by all these can be effective in physical distribution of their product, such effectiveness can range from ensuring that profit is earned in the process and achieve their private goal of the business, will standing the competition minimize the cost and profit maximize in physical distribution activities.

The researcher will examine in his study the physical distribution system in industries will particular reference to the Nigeria bottling company Ontisha Anambra state. All with a view to eliminate the ineffectiveness of physical distribution of coke products in Onitsha areas and suggest areas of improvement.

1.2 Statement of the Problem

In most business operation today, especially those that have one thing or the other to do with distribution, the task of carrying out their function so as to the effective is not an easy one.

Emphasis is laid on the problems associated with the ineffective distribution of coke product by NBC Plc Ontisha.
Inflation is fundamental caused by insufficient supply of essential commodities in relation to demand, and this is worsened by the ineffective distribution of whatever stock of product produced.

There are basic facilities required in product distribution activities such as mechanized equipment for easy loading and off-loading, storage facilities etc but is unfortunate that these are lacking in our industries. As a result it has caused some problems in distributing system affecting the effectiveness of physical distribution. Some of the problems encountered by the company in physical distribution areas follows:


Some of the roads are mortorable while some are not. The rural areas are the worst delivery to such areas are very difficult. The company also encounter the problem of increased competition from companies like 7up bottling Plc.


These are few and far apart, as a result of the reasonable distance between depots and the customers price of product tends to be higher in remote area of onitsha and surrounding environment.

1.3 Objective of the Study

For any profit making organization like Nigeria Bottling company, the main aim is high productivity and maximum satisfaction of customer need unfortunately despite all the air craft machines available, customer are most at time disappointed. This is because the management fail to use adequate of effective physical distribution system.

The purpose of the study is

  1. Therefore to find how Nigerian bottling company can solve the problem of ineffective distribution of coke product by NBC Plc Onitsha
  2. How NBC can maximize customer satisfaction through the use of appropriate distribution system
  3. How to solve the problem associated with the transportation and warehouse in either to improve the profitability of the establishment
  4. How to solve the problem associated with increase competition through the user of effective distribution systems

1.4 Significance of the Study

The study is to appraise the effect of physical distribution system on the productivity and profitability of Nigerian Bottling Company management with particular reference to Nigerian Bottling company coca cola onitsha.

It is therefore, expected that it will help NBC and other company in the same industrial in providing possible solution to it physical distribution problems.

It will help the future researcher who will like to do a research on appraisal of physical distribution for further consultation.

The study gives this researcher the opportunity to know more about the Nigerian bottling coca cola onitsha.

1.5 Research Question

Based on the project topic and the objective of the research question have seen formulated.

  1. How is distribution decision/policy made?
  2. How does this policy
  3. Depot location their operation and documents in use
  4. Means of distributing the goods to the depots?
  5. Customers problems encountered
  6. What distribution arrangement in onitsha and it environment
  7. How does the distribution efficiency contribute to the profit of the company?
  8. What distribution problem do you encountered in attempt to get the product to the customers.

1.6 Hypothesis

It is very vital for the researcher to bring out some provisional or tentative assertion on the basis of their presumed correction.

  1. HA2: An effective application of physical distribution is a means by which an organization objective can be achieved
  2. HA2: An effective application of physical distribution is not means by which an organization objective can be achieved
  3. HA2: There is a significant relationship between effective distribution system and increased sales of the firms products
  4. HA2: There is no significant relationship between effective distribution system and increased sales of the firms products

1.7 Scope of the Study

The study covers the distribution in the Nigerian bottling company (NBC) Plc, Ontisha. The producer of

  1. Coca cola
  2. Sprite
  3. Fanter (quinine and orange, lemon and chapman)
  4. Frest bitter lemon
  5. Club soda

The researcher will focus the study and the effectiveness of physical distribution activities in NBC Plc, Onitsha Anambra state

1.8 Limitation of the Study

In actual sense, study should involved the study of some of the manufacturing industries of these because of the geographical distribution of these industries. It will not be possible for the researcher to carry out research work on these industries owing to this the researcher is concentrating on the Nigeria bottling company Onitsha Anambra state.

In carrying out this project work, the research faced some problems which ranged from financial constraints, time constraint to the problems of data collection

Time factor, which arise when this researcher was exposed to opportunity cost, that is whether to have 100% attendance lecture for use some days for lecture and attitude of Nigerian to project problem caused by the attitude of Nigerians of project and power holding plc intermittent power failures. However bearing these constraints in mind the researcher has made effect to ensure that he left no stone unturned in the research for materials and evidence necessary for the purpose of carrying out this research successfully.

1.9 Operation Definition of Terms

a. Distribution:

Mean the vast industry which is composed of many thousand of outlets ranging in size from small shop to large supermarket, department store, cash and carry and warehouse, all of which attempt to supply the need of the consumer.

b. Frontieer:

The sudden increase in the number or amount cost in physical distribution system.

c. Proliferation:

The sudden increase in the number or amount cost in physical distribution system

d. Inflation:

General rise in the prices of service and goods in a particular country, resulting in a fail in the value of money.

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Summary

Physical distribution has been analyzed as the management of activities which facilitate the movement and co-ordination of supply and demand in creation of time and place utility.

The Nigerian bottling company overriding objective in achieving effective distribution of their products to the right time as efficiency of profitable as possible place, at the right possible. There is also the growing awareness of the importance of distribution has realized job, getting the product to the customer at the right time in the right quality and with the right logistical support is the other half, therefore providing effective customers services not possible without effective physical distribution.

Also in Nigeria bottling company various departments are involved in activities leading to effective physical distribution managerial responsibility for physical distribution activities has been fragmented and delegated to various departments or units that often have conflicting or opposite goals in Nigerian bottling company, the production department sets the production runs in order to minimize unit manufacturing cost, and avoid or eliminated high inventory cost, the transport/traffic department looks at the freight rates and total cost of distribution, the finance department wants, a minimum of be tried up in inventories, while the sales department ensure that the products or drinks get the consumer as a when needed.

These fragment series of operation in Nigeria Bottling company can be efficiently and effectively co-ordinates through the application of systems approach to integrated distribution system and this involves physically moving raw materials in process inventory and finished goods ie drinks from the plant to the point of use.

Therefore for effective distribution of the NBC product they should minimize the total cost of providing a desired level of customer services and appreciate the fact that there are competitors ie ensure of that they take care of such thing such as

  1. Improvement in customer services
  2. Competition among other firms
  3. Sales volume increase/expansion
  4. Creation of time and place utilities.
  5. Cost reduction

5.2 Conclusion

For goods produced by companied to reach the consumers as at when required companies must maintain an effective distribution system. Sales and revenue expectation of a manufacturing company are to a large extent dependent in distribution, that a firm sales or does not, depends on if the consumers get the product. Very often cost of distribution has tended to be greatest than cost of distribution. The literature review section of this work was selected to give background view of what specialists in the field of physical distribution has regarded on the subject matter earlier.

Analysis on the topic, dealt in great details with the method of physical distribution operation the Nigeria bottling plc Onitsha. This analysis was facilitated by the questionnaires distributed and interview conducted as fact finding devices. Discussions were carried out on finding and they were physical distributions. The researcher rounded up the work by recommending ways that will help the Nigerian bottling company in the effective distribution of their product, and accomplish their objectives.

5.3 Recommendations

In chapter four, the researcher analyzed and presented information collection for this study. The presentation and analysis pin-point areas that affect or lead to ineffectiveness of physical distribution in the company.
Base on this research work, the following recommendation are made.

  1. Since the Nigeria bottling company does the distribution itself and there is a need to intensity its distribution arrangement and better customer service coverage, the fleet size of the company distribution vehicles should be increased from its presents number and ageing one’s replaced.
  2. To cope with this challenges as may be created if (a) above comes. True the maintenance workshop should be more equipped with more machine and equipment that can handle more sophisticated mechanical faults in vehicles and more mechanical technician employed to strength the present workforce of the department to that vehicle for repairs are not unduly delayed because of lack of personnel.
  3. The depot location are found mostly in big cities, but efforts should be made to extend the depot to the other growing towns because of the following reasons.
    • The category “A” deals in rural areas charges high prices arbitrarily in the name of high transport costs, with the effect that in rural areas the products are usually depots are relatively located to those rural areas the company salesmen can conveniently reach them for direct supply.
    • The need for tracking problems of trade off between physical distribution sub-function already mentioned in my literature review arise.
    • Inadequate supply and shortage of raw materials.

The solution to inadequate supply and shortage of raw materials had to be a long term one and this lies in increasing the production of local raw material as such as possible.

The company should therefore intensify its effort on the supply of the raw materials use in production so as to avoid stock-out situation which will effect production thereby effecting the distribution.

Materials Handling the Distribution

Materials handling equipment line forklifts hand trolleys should be increased both at plant and depot level to facilities

  • The loading and off loading
  • Saving time of dealer on self collection services basis and
  • Driver or salesmen who need to see loaded before they can make their direct delivers to customers
Order Processing

The system of making the customers rout card ie, indicating the day to expect suppliers (order) from salesman on direct supply delivery is high recommended and should be continued and positively computerized so that

  • Little time is spent in filling customers weekly orders and
  • In the case of compliance from customers the card can be retrieved with little or no time cost.

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