ABSTRACT
Logistic problems constrain the optimal utilization of human and capital resources of manufacturing industry for the maximization of profit. This study was undertaken to isolate the logistic problems that confronts manufacturing firms. It was an empirical study of Champion Breweries Plc. Uyo. The study made use of primary data obtained, from administration of questionnaires. The data was analysed using frequency distribution/simple percentage and ordinary least square (OLS) multiple regression method. The empirical results should that: (1) Optimal stock quantity was positively and significantly affected by stock control personnel and adequate stock warehouse, and positively but insignificantly by inventory management system (2) quality of product was influence positively but insignificantly by quality of raw material and production technology, and positively but significantly by quality control personnel, and (3) transport system was negatively and significantly affected by poor road conditions, and positively but insignificantly by vehicle management and condition of vehicles. It was recommended that the company either overhaul or replace the inventory management system, production technology and vehicle management system.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Table of Contents vi
List of Tables x
Abstract xi
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of Problem 4
1.3 Objective of the Study 5
1.4 Research Questions 5
1.5 Research Hypothesis 6
1.6 Significance of the Study 6
1.7 Scope and Limitation of the Study 7
CHAPTER TWO
LITERATURE REVIEW
2.1 The concept of Logistics in Manufacturing Industry 8
2.2 Logistic Operation Functions 10
2.2.1 Order taking and Forecasting Demand 10
2.2.2 Provision 11
2.2.3 Inventory 14
2.2.4 Transportation 14
2.2.5 Warehousing 16
2.3 Component of Logistics 17
2.3.1 Logistic Services 17
2.3.2 Information System 17
2.3.3 Infrastructure System 18
2.4 Logistic Problem Facing Manufacturing Firms 18
2.5 Logistics Field 19
2.5.1 Procurement Logistics 19
2.5.2 Production Logistics 20
2.5.3 Distribution Logistics 20
2.5.4 Disposal Logistics 20
2.5.5 Reverse Logistics 21
2.5.6 Green Logistics 21
2.6 Logistics Outsourcing 21
2.6.1 Third Party Logistics 22
2.6.2 Fourth Party Logistics 22
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Design of the Study 23
3.2 Area of Study 23
3.3 Population of the Study 23
3.4 Sampling Technique and Method 23
3.5 Determination of Sample Size 24
3.6 Measurement of Instrumentation 25
3.7 Sources of Data 25
3.8 Validity and Reliability of Instrument 25
3.9 Data Presentation and Analysis 26
CHAPTER FOUR
PRESENTATION AND DISCUSSION OF RESULT
4.1 Rate of Return of Completed Questionnaires 28
4.2 Socio-demographic Characteristics of the Respondents 29
4.2.1 Age 30
4.2.2 Gender 31
4.2.3 Marital Status 31
4.2.4 Educational Qualification 31
4.2.5 Departments of Respondents 32
4.2.6 Rank of Respondents 33
4.3 Responses to items in the questionnaires 34
4.3.1 Logistic Problem of Product Stocking 34
4.3.2 Efficiency of Inventory Management System 35
4.3.3 Effectiveness of Personnel Handling the Stock in the Company 36
4.3.4 Adequacy of Stockholding Capacity of Company Warehouse 37
4.3.5 Quality of Products of Champion Breweries 37
4.3.6 Availability of Raw Materials 38
4.3.7 Quality of Raw Materials 39
4.3.8 State of Machines/Technology used in Production 40
4.3.9 Effectiveness and Experience of Staff of Quality Control
Department 41
4.3.10 Challenges of Transportation as a Logistic Problem 42
4.3.11 Effect of Bad Roads on Movement of Raw Materials and
Finished Goods 43
4.3.12 Effect of Condition of Vehicles on the Transportation of Goods 44
4.3.13 Effectiveness in Management of Vehicles 44
4.4 Presentation and Interpretation of Regression Results 45
4.4.1 Relationship between Inventory Management System,
Stock Control Personnel Adequacy of Stock Warehouse and
Optimal Stock Quantity 46
4.4.2 Relationship between Quality of Raw materials,
Production Technology/machine, Quality Control Personnel
and Quality of product 49
4.4.3 Relationship between state of Road Conditions, Effectiveness
of Vehicle Management, Condition of Vehicles and
Transportation System 51
4.5 Discussion of Result viz-a-viz the logistic problems of
Champion Breweries Plc 53
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary 56
5.2 Highlights of Major Findings 58
5.3 Conclusion 59
5.4 Recommendation 60
References
LIST OF TABLES
4.1 Responses on the age distribution of the respondents 29
4.2 Responses on the gender distribution of the respondents 30
4.3 Responses on the marital status of the respondents 31
4.4 Responses on the educational qualification of the respondents 31
4.5 Responses on the Departments of the respondents 32
4.6 Responses on the Rank of the respondents 33
4.7 Responses on the logistic problem of product stocking 34
4.8 Responses on the efficiency of the Inventory Management
System of Champion Brewery 35
4.9 Responses on the Effectiveness of Stock Control Personnel 36
4.10 Responses on the adequacy of Stock Holding Capacity of
Champion Brewery Plc. Warehouse 37
4.11 Responses on the Quality of Champion Breweries Products 38
4.12 Responses on the Availability of Raw Materials 39
4.13 Responses on the Quality of Raw Materials used for Production 39
4.14 Responses on the state of Machine/Technology used in
Production 40
4.15 Responses on the Effectiveness and experience of staff of
Quality Control Department 41
4.16 Responses on the challenges of Transportation as a logistic
Problem 42
4.17 Responses on the effects of Bad Roads on Movement of
Raw Materials and finished goods 43
4.18 Responses on the effect of condition of vehicles on
Transportation of Goods 44
4.19 Responses on the effectiveness in Management of Vehicles 45
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Over the years, many companies have created logistic functions to look after an increasing proportion of manufacturing, storage function and movement of raw materials and finished production.
Logistic in manufacturing involve strategically managing the procurement, movement and storage of material, production of parts and despatch of finished products and the related information flow into and through the organization and its marketing channels to meet customer needs for goods and services and to achieve sustained profitability by cost effective order.
Logistics was originally used in a military context, meaning all the support actions necessary to keep an army in the field, fighting a war-fifty years ago manufacturing and service companies did not have logistic function. Generally, customer service was handled by the sales department. Inventory was managed by manufacturing or sale according to location. Suppliers arranged in bound transport and outbound transport was booked by someone in the sale department (Christopher, 2005).
In the intervening period, many companies have created a logistic function to look after an increasing proportion of movement and storage functions.
Typically, logistics involves:
i. Purchases
ii. Inbound transport
iii. Production plans and schedules
iv. Inventory management
v. Warehouse management
vi. Several information system such as customer response management, materials requirement planning and distribution requirement planning (Christopher, 2005).
Logistic problem greatly affecting manufacturing operation, logistic operation problem comes in several ways. Some companies’ faces logistic problem in transportation (Hong, 2010) found that logistic functionality in China is the key for maintaining low price. He described a logistic transportation of a label company where by product needed to be transported to Japan from China their distribution centres are built in China. The link chain is that, product are first sent to one of the distribution centres, then to the nearest labours and finally exported to China.
Some companies face logistic challenges in procurement, quality, cost and delay delivery.
Logistic problem associated with outsourcing include, maintaining quality levels, price increase and unstable delivery.
Logistic problems associated with suppliers’ selection include maintaining quality level cost performance. (Jouffrey and Tarondeau, 1992) stated that in the manufacturing process, logistic encountered quality inspection system, poor equipment, maintenance, defective condition of manufacturing facilities.
Logistic problems can also arise from lack of container trucks, product damage caused by poor condition of container, rough treatment of product, instability of ocean freight, rising labour cost, different standard and industrial practices delayed delivery due to shortage of labour. Under regulation and distribution logistic, (Yu, 2006) opined that transhipment caused by restriction, under custom tariff, traffic regulation especially in major cities contribute a lot to logistic problems in manufacturing companies.
1.2 Statement of Problem
The increase price of products is becoming a problem which is due to logistic problems encountered by manufacturing companies. Logistic problems greatly affect manufacturing operation thereby causing poor quality product, defective condition of manufacturing facilities (Jouffrey and Tarondeau, 1992). The also stated that logistic problems can arise from lack of container trucks, product damage caused by poor condition of container, rough treatment of product, instability of ocean freight, rising labour cost price (Hong, 2010). Yu (2006) opined that transhipment caused by restriction, unclear custom tariff, traffic regulation especially in major cities contribute a lot to logistic problems in manufacturing companies. Effective logistics might be a potent panacea to the problems faced by manufacturing companies. The trust of this research study is to analyse the logistic problems of manufacturing companies in Champion Brewery, Uyo.
1.3 Objective of the Study
Main Objective
To determine the analysis of logistic problems in the manufacturing Industries with specific attention to Champion brewery in Uyo, AkwaIbom State.
Specific Objective
a. To determine the logistic problem facing quantity of product in stock in the Company.
b. To examine the logistic problem involve in maintaining good quality of product.
c. To examine the logistic problem involved due to deficiency in road conditions.
1.4 Research Question
This research is intended to answer the following questions:
i. What are the most critical logistic problem facing manufacturing companies?
ii. Is logistic problem greatly affecting business performance of manufacturing companies?
iii. How are quality costs, delay delivery seriously affected by logistic problems?
1.5 Research Hypothesis
Ho: Logistic problems does not affect quality of goods produced.
H1: Logistic problems affect quality of goods produced.
H0: Logistic problems does not affect manufacturing operation of companies.
H1: Logistic problem affects manufacturing operation of companies.
1.6 Significance of the Study
Manufacturing companies have been faced with many challenges especially with logistic problems. Knowledge is added up in every successful study. This study will help to know the major logistic problems faced by manufacturing Companies and ways to solve the problems. It will greatly help manufacturing Companies in maintaining good quality of goods and business performance.
Hopefully, the finds of this study will be of benefit to policy makers on logistic issues.
1.7 Scope and Limitation of the Study
This research work has been designed to study the logistic problems encountered by manufacturing Companies. The study focuses on Champion Brewery, Uyo as a case study, this organization is considered as a result of its contribution in the manufacturing Company.
Limitation: Problems encountered in the course of carrying out this research include:
i. Inadequacy of fund to carry-out a more elaborate research.
ii. Attitude of respondent; some respondents were not interested to entertain some of the questions directed to them for fear of exposing the company’s weakness to the public.
iii. Time factor: the duration of academic session was too short to work out great details.
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