Project Materials

VARIETY REDUCTION AS A TOOL FOR EFFECTIVE MATERIALS CONTROL (A CASE STUDY OF NIGERIA BOTTLING COMPANY PLC)

Chapter one

INTRODUCTION

1.1 Background of the Study

Variety reduction can be used in any industrial process. The approach is obviously more effective when used in the correct place and at the proper time. Apparently in many organisations, it is clearly to see organisations, 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 minimise waste and enhance maximum services Variety reduction can result in significant inventory reductions by standardising and rationalising the range of materials, parts, and components held in stock.

Variety reduction can be achieved by using, as far as possible, standardised components and subassemblies to make end products that are dissimilar in appearance and performance, so that the 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 significantly reduced.

Thus, variety reduction can be defined as “the process of reducing the number of types, sizes, or grades of a product that are purchased or stocked” (Hassan 2008, p. 445).

1.2 Statement of the Problem

One of the primary goals of the private sector is to maximise profit while reducing costs. These goals can be met in the material control element of the organisation by implementing a plan that will help or assure that the number of types, sizes, or grades of a product held in the organisation are not duplicated when purchased, resulting in a minimum cost investment in materials.

Unfortunately, these objectives are rarely met as a result of a failure to recognise the significance of variety reduction in an organisation as a tool for successful material control.

Variety reduction is the process used to describe standardisation and simplification where different items that are capable of performing the same function are carried in large quantities.

Variety reduction is required, but hardly any organisation took cognisance of this vital function as a tool for effective material control. As a result, many organisations continue to hold materials, parts, and items that are similar and capable of performing the same function.

Variety reduction helps to reduce the number of types in the shop; it also helps to specify suitability of purpose, lower the stock held and its associated costs.

Another benefit of variety reduction is that it serves as a foundation for development. However, despite these benefits, the researcher discovered that most organisations have lost sight of this critical function, which necessitates a proactive approach to better control of materials held in an organisation.

Also, variety reduction assists the organisation in avoiding buying different types of items that can serve the purpose, quicker and effective stock taking, reduce obsolete, overhead costs

it also facilitates easier inspection due to product uniformity, easier stock control, and less storage space required, in view of all these benefits of variety reduction to an organisation, the researcher observed that hardly any organisation can show a unit or professionals bestowed with

1.3 Objectives of the Study

The researcher’s goal in doing this research is to investigate the impact of variety reduction on material control. Specifically, the research work is laid out.

– Determine the regions covered by variety reduction in an organisation, such as Nigeria Bottling Company Plc Kaduna.

– Identify stages of variety reduction that will improve the organization’s operational efficiency.

– Determine whether the benefits of variety reduction can reduce costs in the organisation.

– Determine whether the reasons for variety reduction can help the organisation improve its quality of output.

– Determine why variety decrease should be controlled based on its importance.

1.4 Significance of the Study

This study will investigate the impact of variety reduction on material control at Nigeria Bottling Company Plc’s Kaduna plant. Potential investors, academics, other company management researchers, and the general public will all profit greatly from the study.

The research work is significant to the organisation because it provides them with relevant information on how important variety reduction is in facilitating organisational efficiency, productivity, and material control, as well as changing their orientation in terms of how best to manage, maintain, and handle their material or inventory level, which will also be applicable to other industries that engage in production activities.

The study will also be extremely beneficial to future investors because it will offer them with firsthand information on the importance of variety reduction in improving material flow.

Academics can use the research work as study material and a reference book to enhance their understanding of what it means to reduce variety.

The research work will also be used as a reference book for other researchers working on similar project topics. Come across this research study, and it will give them with understanding on how vital variety reduction is to an organisation, as well as add value to their existing expertise.

The researcher is conducting research to widen and add value to his understanding of variety reduction in material control. Finally, the research work is required for the award of a Higher National Diploma in Purchasing and Supply from Kaduna Polytechnic.

1.5 Scope of Study

This research focusses on variety reduction as a strategy for successful material control. A case study of the Nigeria Bottling Company Plc Kaduna facility, which is located in Kaduna South Industrial Layout, Kaduna, Kaduna State.

The researcher seeks to investigate the extent to which variety reduction strategies, if available, may result in efficient material controls in the organisation.

The outcomes of this research will be based mostly on data obtained from the plant’s workers, including storage, design, production, suppliers, and purchasing and supply professionals at the Nigeria Bottling Company Plc Kaduna Plant.

1.6 Research Questions.

This project will seek to answer the following research questions:

– Which areas are covered by variety reduction?

– To what extent do the stages of variety reduction improve the organization’s operational efficiency?

– How can variety reduction serve the organisation by lowering costs?

– How do the reasons for less variety benefit the organization’s quality production?

– What priority does the organisation place on variety reduction?

1.7 Definition of Terms.

Material Control is a critical activity that encompasses a wide range of tasks from the time the product is designed to and including its ultimate delivery.

Standardisation is the process of decreasing the number of variations stocked to a controlled, workable minimum.

Simplification is the elimination of all work and resources that are absolutely necessary in order to achieve more efficient manufacturing.

Redundancy refers to an excess of stock above the typical storage capacity.

Surplus Materials: Having more than what is required or needed.

Variety reduction is the process of lowering the number of different varieties, sizes, or grades of a product that are purchased, manufactured, or stockpiled.

A store is a location where products are stored for future delivery.

Suppliers are those who provide or make stuff available to an organisation when it is necessary.

Value is the cost of obtaining or performing the function of a product or service in a form or location that meets the required quality.

Value Engineering is essentially the application of value techniques to a ‘new’ product, process, component, or system, beginning with the conceptual design or prototype stage of the product.

Value analysis is a strategy or approach used to discover superfluous cost elements and eliminate or reduce them.

Cost: The amount required to manufacture or purchase a specific material or product.

Organisation is the process of breaking work into manageable tasks or duties by forming and sustaining like-minded groups to achieve certain goals.

Personnel: The human resources and labour relations department.

Purchase: The acquisition of necessary equipment, materials, and services.