CHAPTER I: 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;
- To determine the areas covered by variety
reduction in an organization is, Nigeria Bottling Company Plc Kaduna.
- To determine stages of variety reduction that can facilitate the organization’s operational efficiency.
- To determine if the benefit of variety reduction can minimize cost in the organization.
- To determine if the reasons for variety reduction can improve quality production in the organization.
- 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:
- What are the areas covered by variety reduction?
- To what extent the stages of variety reduction facilitate the organization operational efficiency?
- How the benefit of variety reduction does minimizes cost in the organization?
- How do reasons for variety reduction improve quality production in the organization?
- 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.