Variety Reduction As A Tool For Effective Materials Control (A Case Study Of Nigeria Bottling Company Plc)

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Variety Reduction As A Tool For Effective Materials Control (A Case Study Of Nigeria Bottling Company Plc)


Abstract


This research study is based on variety reduction as a tool for effective material control, a case study of Nigeria Bottling Company Plc. To understand the research work better, efforts was made at the introductory stage to explain the general importance of variety reduction with special consideration being placed on company especially Nigeria Bottling Company Plc, Kaduna. Also the general problem was also emphasized on such non recognition of the role of variety reduction on storage of different articles that can serve the same purpose.

Effort was also made to identify the purpose of the study such as the degree of importance attached to variety reduction, areas covered by variety reduction and its operational activities. It also focused on its significance to the organization, the academics, the populace and the researcher. Research question were also generated to determine the importance the organization placed on variety reduction and how variety reduction facilitate the organization operational efficiency. The survey research design is employed; also simple random sampling procedure was employed. The researcher used questionnaire and documentary sources.

The likert four rating scale technique is used to analyze the data, findings made among which are, that the organization considered variety reduction to facilitate the organizational efficiency and that the variety reduction minimizes cost and avoid storing the same item that can serve the same purpose in making material available in the store. However, the researcher summarized and concluded the research study and made recommendations to the company, amongst which are formulation of variety reduction policy to align with the vision and mission of the organization, always employed a competent hand to handle variety reduction activities, to strive as much as possible to create a variety reduction unit to be controlled by a qualified store manager, purchasing and supply officer and engineer.


Table of Contents


  • Title
  • Approval
  • Declaration
  • Dedication
  • Acknowledgement
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objectives of the Study
  • 1.4 Significance of the Study
  • 1.5 Scope of the Study
  • 1.6 Research Question
  • 1.7 Definition of Terms

Chapter Two:

Literature Review

  • 2.1 Conceptual Framework of Variety Reduction
  • 2.2 Stages of Variety Reduction
  • 2.3 Areas covered in Variety Reduction
  • 2.4 Reasons for Variety Reduction
  • 2.5 Benefits/Advantages and Disadvantages of Variety Reduction
  • 2.6 Why should the variety be controlled
  • 2.7 How does Variety Reduction tend to Increase
  • 2.8 How to Control Variety Reduction
  • 2.9 Materials Control

Chapter Three:

Research Methodology

  • 3.1 Area of Study
  • 3.2 Research Design
  • 3.3 Population of the Study
  • 3.4 Sample for Data Collection
  • 3.5 Instruments for Data Collection
  • 3.6 Administration of the Instrument
  • 3.7 Techniques for Analyzing Data

Chapter Four:

Presentation and Analysis of Data

  • 4.1 Presentation of Results

Chapter Five:

Summary, Discussion, Conclusion and Recommendation

  • 5.1 Summary of Procedure
  • 5.2 Discussion of Finding
  • 5.3 Implication of Finding
  • 5.4 Conclusions
  • 5.5 Recommendations
  • 5.6 Suggestion for Further Study
  • Bibliography
  • Appendix

Chapter One


Introduction

1.1 Background of the Study

Variety reduction can be applied to any production process. The technique certainly has more effect if applied in the right place and at the right time.

Apparently in many organization, it is clearly to see organization be it manufacturing holding different number of types, size or grade of a product that can perform the same function, this means duplication of items, the cost of materials is the last remaining cost that is truly variable, a reduction in the cost of material clearly offers on usual opportunity for profit improvement, therefore the need for purchasing to minimize waste and enhance maximum services within the organization has resulted in the use of variety reduction.

Variety reduction can make a substantial savings in inventory by standardizing and rationalizing the range of materials, parts and component kept in store. Variety reduction can be achieved by using, so far as possible, standardized components and subassemblies to make end products that are dissimilar in appearance and performance so that variety of final products uses only a few basic components, variety reduction can also be applied when considering capital purchases, by ensuring compatibility with existing machinery, the range of spares carried to ensure against breakdowns can be substantially reduced also variety reduction can be undertaken periodically to examine arrange of stock items to determine

the intended use for each item of stock, how many stock item serve the same purpose, the extent to which items having the same purpose can be gives a standard description, what range of sizes is essential and lastly what items can be eliminated all these are done to ensure effective material control. Therefore, variety reduction can be defined as “the process of reducing the number of types, size or grades of a product that are purchase made or stocked (Hassan 2008 p. 445).


1.2 Statement of Problems

Among the objectives of all private sector is to maximize profit and reduce costs. These objectives can be achieved in material control aspect of the organization by imploring a strategy that will help or ensure that the number of types, sizes or grades of a product held in the organization are not duplicated when purchased, this will help in investing minimum cost on materials. But is quite unfortunate that these objectives are rarely achieved as a result of non recognition of the role of variety reduction in an organization as a tool for effective material control.

Variety reduction is the process used to describe standardization and simplification where different items that are capable of performing the same function are carried in large quantities, variety reduction is required but hardly did any organization take cognizance of this vital function as a tool for effective material control, as a result many organizations continue to hold materials, parts, items that are similar and capable of performing the same function this affect the material control unit of the organization efficiency be holding excess stock.

Variety reduction helps to reduce the number of varieties in the store, it also help to stipulate suitability of purpose, reduce the stock held and its associated cost another importance of variety reduction is to establish datum as a basis for development, but despite all these importance of variety reduction to an organization the researcher observed that most organization lost foresight of this important function that required a proactive approach for better control of materials held in an organization.

Also variety reduction assist the organization in avoiding buying different types of item that can serve the purpose, quicker and effective stock taking, reduce obsolete, overhead cost, it also facilitate easier inspection due to product uniformity and easier stock control and less storage space required, in view of all these benefits of variety reduction to an organization, the researcher observed that hardly can any organization show a unit or professionals bestowed with the responsibility of performing this vital function as a result many of these benefits are not derived by organizations.


1.3 Objectives of the Study

The purpose of embarking on this research work by the researcher is to determine the effect of variety reduction on materials control.

Specifically, the research work is set out;

  1. To determine the areas covered by variety reduction in an organization is, Nigeria Bottling Company Plc Kaduna.
  2. To determine stages of variety reduction that can facilitate the organization’s operational efficiency.
  3. To determine if the benefit of variety reduction can minimize cost in the organization.
  4. To determine if the reasons for variety reduction can improve quality production in the organization.
  5. To determine why variety reduction should be control through the importance attached to variety reduction.

1.4 Significance of the Study

This study will bring to light the effect of variety reduction on materials control in Nigeria Bottling Company Plc Kaduna plant.

The study will also be of great benefit to potential investors, those in academics, other researcher in business management fields and the entire populace.

The significance of the research work to the organization is to provide them with relevant information on how important variety reduction is in facilitating organizational efficiency, productivity and materials control and also to change their orientation in terms of how best to manage, maintain and handle their material or inventory level and this will also be applicable to other industries that is into production activities.

The study will also be of immense benefit to the potential investors, in the sense that it will provide them with freehand information on how important variety reduction is in promoting material flow. In the academics, the research work can stand as a study material and reference book they can consult to broaden their knowledge on what it meant by variety reduction.

The research work will also serve as a reference book to the other researcher on this type of project topic. To the entire populace, come across this research work, the research work will provide them with the knowledge on how important variety reduction is to an organization and it will also add value to their knowledge.

The research work is embarked on by the researcher to broaden and ad value to his knowledge on variety reduction on materials control.

Lastly, the research work is also a requirement in fulfillment for the award of Higher National Diploma in Purchasing and Supply Department of Kaduna Polytechnic.


1.5 Scope of the Study

This research work is based on variety reduction as a tool for effective material control. A case study of Nigeria Bottling Company Plc Kaduna plant which is situated at Kaduna South industrial layout Kaduna, Kaduna State.

The researcher intends to examine the extent to which variety reduction techniques if applicable may lead to effective material controls in the organization.

The findings of this research work will primarily base on the data collected from the staff of the plant draw from the stores, design, production, suppliers and purchasing and supply personnel of Nigeria Bottling Company Plc Kaduna Plant.


1.6 Research Questions

This study will attempt to provide answers to the following research questions:

  1. What are the areas covered by variety reduction?
  2. To what extent the stages of variety reduction facilitate the organization operational efficiency?
  3. How the benefit of variety reduction does minimizes cost in the organization?
  4. How do reasons for variety reduction improve quality production in the organization?
  5. What importance does the organization attach to variety reduction?

1.7 Definition of Terms

Material Control:

Is a key activity which covers a wide range of different tasks from the moment the product is designed up to and including its final delivery.

Standardization:

Is a process of reducing the number of varieties stocked to a controlled workable minimum.

Simplification:

Is the elimination of all labour and materials that are absolutely essentials so that more effective production can be carried out.

Redundancy:

Is the excess over the normal holding of stock.

Surplus Materials:

Having more than what is required or necessary.

Variety Reduction:

Is the process of reducing the number of types, size or grades of a product that are purchased, made or stocked.

Store:

Is a place where goods are kept upon onward delivery.

Suppliers:

Those that supply or makes material available to an organization when needed and when required.

Value:

Is the cost from which the function of a product or service may be obtained or accomplished at a form or place with the require quality.

Value Engineering:

This is simply the application of value technique to a ‘new’ product, process, components and system, commencing with the conceptual design or prototype stage of the product.

Value Analysis:

Is a tool or technique for identifying unnecessary cost factors with a view to eliminating or reducing them.

Cost:

What it takes to make or buy a certain material or product.

Organization:

Is the process of dividing work into convenient tasks or duties, by creating and maintaining like-groups to achieve specific objectives.

Personnel:

The human resources and labour relations function.

Purchasing:

The buying of required equipments, materials and services.


Chapter Five:


Summary, Discussion, Conclusion and Recommendation

This chapter summaries the entire work to bring out the findings arrive at a conclusions and make feasible recommendations to the management.

It is culmination of the research work and revolved round the following issues, summary, discussion, conclusion and recommendation.


5.1 Summary of Procedure

This study was basically carried out to examine variety reduction as a tool for effective materials control in an organization, a case study of Nigeria bottling company plc, Kaduna plant, located at Kaduna south industrial estate, Kaduna state.

The first chapter of the study include brief introduction of the subject matter variety reduction as a tool for effective material control under study problems related to the study were also identified, specific objectives were also identified, questions are developed to assist the researcher study the situation and come up with possible suggestion for the study and definitions of terms used in the study were given.

The second chapter revolved round the review of views and scholars of previous work of authors and scholars on the topic under consideration, the conceptual framework of variety reduction is considered, stages of variety reduction was also given consideration, the areas covered in variety reduction was identified, reasons for variety reduction was also considered, benefits, advantages and disadvantages of variety reduction was also considered and identified in this chapter.

The third chapter research methodology centered on the area of study, research, design, sample and sampling procedure, instrument used for the purpose of elicit administration of the instrument and techniques for analyzing data was identified.

Chapter four, the researcher issued out 20 questionnaire out of which sixteen were filled and returned and this formed the basis for the presentation and analyze has administered personally by the researcher to the respondents and this was done randomly among the sample size drawn from the organization of Nigeria bottling company plc Kaduna plant at Kaduna south industrial estate Kaduna state.


5.2 Discussion of Findings

In this section, the researcher elaborately highlights major findings in accordance to research objective and advancing possible interpretations and explanation of her findings, according to research question, this finding will be related to existing knowledge.

As earlier stated that variety reduction is perform in order to effectively control material in an organization and to achieve standard, therefore, in these organization the basic requirement of variety reduction will help materials and other goods to be of substantial standards, will effectively and efficiently facilitate productivity and that materials, product and components can be stock will minimum cost. Without variety reduction task will be tedious, inspections will be very difficult and there will be too much duplication of material held in stock which can lead to obsolete, surplus, redundant and scrap materials. Therefore, research question one was designed to know the areas covered by variety reduction, is also employed to cover design of the organization products through value engineering in value analysis, thus, the response of the respondents shown that variety reduction covers a lots of areas of material made or purchased in the organization.

Research question two identified the stages of variety reduction that facilitate the organizations operational efficiency, identification and classification of materials that facilitate stocktaking, variety reduction has assisted in product redress and the finding revealed that variety reduction has enhanced easier material control and less storage required.

Variety reduction in relation to reduction of stock taking cost saving associated with storage of items that can serve the same purpose and ease inspection prompted the research question three which state that, did variety reduction minimizes cost in the organization and the finding revealed that efficiency on the part of the industry activities is related to effective application of variety reduction.

The research question four revealed round such issues as quality production, supply of quality materials, acquisition of quality material by the purchaser, cost reduction in order to increase profit and the response from the respondents attested to the fact that variety reduction enhance quality production.

Research question five address such issue as the importance the organization attach to variety reduction by controlling variety, the policy put in place, separate budget to carryout variety reduction activities and the response of the respondent revealed that the organization considered variety reduction as an integral part of their activities.


5.3 Implications of the Findings

In reference to the findings of these studies, the following implication can be deduced if action is taken or not.
The findings revealed that variety reduction activities in the organization is performing perfectly but the issue of professional that is there is no unit set up to hardly variety reduction activities. Also variety reduction function is still subjected to certain policies.

The issues of professionals in this field have to be enhanced or employ so that variety reduction can be well applied. Costs related to duplication of article, material and storage will be reduced thus, enhancing the profit of the industry. Also, variety reduction should be given a separate unit with qualify manager, who is capable of formulating policies that are necessary to upgrade the activities of variety reduction thereby facilitating the efficiency and productivity of the organization. Also variety reduction can reduce overstocking of material that can serve the same purpose and be given proactive approach.

The non implementation of these findings can disrupt the present advantages and benefits deriving from the variety reduction and in the future, thus, this can hinder the efficiency and productivity of the organization.


5.4 Conclusions

In the view of the above findings the following conclusion is arrived.

First, that the organization has area covered by variety reduction, that the organization attached considerable importance to variety reduction, that variety reduction facilitates the organization operational efficiency, variety reduction really minimizes cost and improve quality production.

Moreover, variety reduction really eases inspection, stocktaking and avoidance of storing duplication of article.
And lastly that variety reduction enhance the production and delivery of right quality of materials as such the organization is able to increase efficiency, productivity and also enhance the profitability of the organization.

  1. That the organization is encountered with the problem of none recognition of variety reduction activities which affect the level of efficiency, productivity of the organization.
  2. The variety reduction is not given a proactive approach and over storing of material which can lead to increase in cost of storage.
  3. Lack of professionals and a unit separated to handle variety reduction activity that is responsible for formulating policy and control of materials effectively.

5.5 Recommendations

In view of the above findings, conclusion and implementation of the findings. It is recommended that management of Nigeria Bottling Company Plc should:

  1. Formulate variety reduction policy to align with the objective of the organization.
  2. Always employed a competent hand to handle variety reduction so as to effectively control material.
  3. Gives variety reduction adequate priority so as to avoid storing the same article that can serve the same purpose.
  4. Critically address the issue of non recognition of the role of variety reduction activities.
  5. To set up a unit that can handle the issue of variety reduction perfectly.
  6. Strive as much as possible to create or set up professionals.
  7. Variety reduction should be given a proactive approach.

5.6 Suggestion for Further Studies

On the course of the research study the researcher discover some related areas of study which is not discuss in the research work. Such areas as selling, marketing aspect, store building and the number of stock in relation to variety reduction.

Another important area the researcher could suggest, for further study is organization and management of variety reduction in organization. Therefore those are identified above, are good area which subsequent researcher can take opportunity of its market exploitation and bring about an important finding and recommendation that can enhance the organization activities when formulating variety reduction policies.


Variety Reduction As A Tool For Effective Materials Control (A Case Study Of Nigeria Bottling Company Plc)


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