CHAPTER ONE

INTRODUCTION

The result of the tendency of people to consume is to increase the capacity of production in the various aspects of human need. There arose the separation of management from ownership in this production function. A further development is the growth, organizational complexity and size, thus large organizations, management is divided into production, personnel management and finance as well as marketing. Other specifications are made as organizations need for them arises.

          Production management is essential and basic to all organizations whether it is manufacturing or service. It should be pointed out that the survival of organization is dependent on how its production processes are managed. Barry Shord explains operations management in his book thus “any organization which transforms inputs into output is engaged in production”.

          Percentage of capacity utilization measure relate output measures to inputs.

The brewing industry in Nigeria has passed through a stage of total importation of a foreign products to stage where some beer manufacturing companies now source their raw materials locally.

BARRY SHORE: Operations Management MC Graw Hill, International Company 1985 pg.30

1.1            BACKGROUND OF THE STUDY

Nigerian Breweries Plc was incorporated first as Nigerian Brewery Limited on the commencement of operations in a second Brewery in Aba in 1957. In accordance with the Companies and Allied Matters Act of 1990, the name was again changed to Nigerian Breweries Plc. Since the formal incorporation in 1946, 50 momentous years that saw the company grow from its modest beginnings into the giant company that it is today. The company now does five (5) breweries from which our highly refreshing quality brands are distributed to all the nooks and crannies of this great country.

          The company of my case study, Nigerian Breweries Plc has kept pace with the key international developments, thus ensuring that our systems, processes amd operational procedures are always in conformity with proven best practices in the most parts of the world. This has been evident in the vision and professionalism  demonstrates in the way the business has been managed in the past 50 years.

The company now has a portfolio of five high quality brands: Star, Gulder,  Maltina and Amstel drinks and Legend Extra stout. Together they have facilitated leadership position in the total brewed products markets in Nigeria. The outstanding quality and consumer franchise complement other companies and capabilities to set Nigerian Breweries apart as the house of quality the house that star built.

Alongside, there developments has been a corresponding growth in the prosperity of company’s shareholders whose funds have appreciated into values for excess of their original investment. They have also had the good fortune of reaping excellent dividends on these blue chips shares year on – year.

1.2            STATEMENT OF THE PROBLEM.

Productivity in this country Nigeria as a matter of fact is low and as such it is described as a developing economy, in countries have developed economies. In view of this, the research is set to examine the following problems:

1.                 What is the extent of the utilization of the installed capacity in Nigerian Breweries Plc?

2.                 What are the resources of raw materials used in the production process in Nigerian Breweries Plc?

3.                 What are the steps in the production process of Nigerian Breweries Plc?

4.                 How are the inventories managed in Nigerian Breweries Plc and what are the inventory management policies of the company?

1.3            PURPOSE OF THE STUDY.

The purpose of the research work are as follows:

(1)             To ascertain the extent to which the installed capacity of Nigerian Breweries Plc is utilized.

(2)             To examine how the raw materials used in the production processes are sourced and sustained.

(3)             To determine the process of production of Nigerian Breweries Plc.

(4)             To find out how the company of study copes wit the management of its inventories.

(5)             To make recommendations.

1.4            SCOPE OF THE STUDY.

The study is based on the Nigerian Breweries Plc Enugu and our data will be collected their. Therefore, the survey will specifically broaden on planning and controlling techniques and it is hoped that results arrived will be true of the Nigerian Breweries Plc Enugu.

          However, controlling system in profit seeking organizations are highly developed because of clear organization goals or objectives dominance by professional and difficult in the measurement of standard. As a result, budgeted expenditure (standard expenditure) will be used to compare actual performance (actual expenditure) using the programme planning and budget system.

This study like every other human academic quest is faced wifth problems of inadequacy of every resource.

          Taking into account the academic standard of the researcher, the scarcity of information and unavailability of certain sophisticated control system in companies. This work will discourse only the easier and a standard of a students in the project writer status.

1.5            RESEARCH HYPOTHESIS

Null Hypothesis

Ho:    The company’s process planning and design does not take place by the advice of its technical partners.

          Alternatives

Hi:     The company’s process planning and design take place by the advice of its technical partners.

          Null Hypothesis Ho:    The level of product / services quality is not high

          Alternative

Ho:    The level of product / services quality is high

          Null Hypothesis

Ho:   Capacity utilization is not slightly above average.

          Alternatives

Hi:     Capacity utilization is slightly above average

1.6            SIGNIFICANCE OF THE STUDY

The significance of this study is to analyse and evaluate the processes of production and capacity utilization in Nigerian Breweries Plc as it seek to achieve a high degree of efficiency of production. In a world of dwindling ventures questions revolving on efficiency of production and factors effecting its growth tends to attract the increasing interest of economists, industrialists and statisticians and researchers.

          Prior to the attempt to analyse ways and methods by which efficiency or effectiveness of production are determined by and problems of its evaluations as mathematically conceived. It is needful to initially give at least a brief but well conceived concept applicable to the topic under review.

There are needed many concepts of efficiency. The term has practical significance not only in economics but also in sociology, ecology and other branches of science. The contents of its study on a particular are of study.

                   A research into production and capacity utilization is necessary because man’s existence on earth cannot be measured with production. Effective utilization of resources leads to less wastage of resources and elimination of idle facilities.

          The research deems it pertinent and important to carryout an investigation of the processes of production and capacity utilization because of the aforementioned importance of production.

1.7            LIMITATIONS OF THE STUDY.

A study of this magnitude and scope could not be carried out without encountering problems that tends to hinder the progress of the study or the volume that would have been covered by the researcher. These problems range from personal to environmental constrains. A look at these problems will only tell so much about our level of under development.

FINACE

As a result of serious constraints of  finance, the researcher would have done a critical comparative  study of the firms narrow the study down to Nigerians Breweries Plc with its factory here too. The financial constrains in this regard bordered a little far away from the base of the researcher.

TIME.

Time was another problems encountered by the researcher so as he had to be doing the balancing act of missing her lectures so many days in search of data of Enugu and other places. Nigerians Breweries Plc being a public limited company operated between Mondays and Fridays and these are days of normal lectures go on in the campus. This created a great deal of problems for the researcher.

Also, in relationship to the time constrains, the researcher sometimes made futile moves at getting at the respondents who either complanined of being too busy to attend to the researcher or weren’t on seat.

RESPONDENTS.

Some of the respondents were not forthcoming with the information required by the researcher. The interview respondents hoarded information that they considered sensitive to the researcher for fear that such could get intof the hands of their competitors. They added that if they consider the information non-sensitive they might release such to their researcher.

          Attempts by the researcher to convince the respondents that the exercise was purely academic proved abortive. However, he was able to continue with the much he was given.

REFERENCES.

1.                 Arrow K.J. (1987) Research in Management Control: A critical  Synthesis, (Dryden Press) p. 140, England, Europe.

2.                 Drucker P.F. 1978) Control and Management (MC Graw Hill) P.78, New York.

3.                 Elion S. (1979) Management Control England Penguin Press Ltd p.16, Britain