EFFECT OF PRODUCTION PLANNING AND CONTROL IN THE MANAGEMENT OF BUSINESS ORGANIZATION
(A STUDY OF SELECTED MANUFACTURING ORGANIZATIONS IN ENUGU STATE)
ABSTRACT
This research work, examined the effect of production planning and control in the management of business organization, a study of selected manufacturing organizations in Enugu State. The objectives of the study include to: ascertain the effect of forecasting the future demand of the products of the three selected organizations on units of outputs, investigate the relationship between prompt delivery of the input of the three selected organizations and timely production of the finished products, evaluate the relationship between the required composition of the input and cost of production of the three selected organizations and examine determine the effect of scheduling of the workforce, machines and equipment on smooth flow of production in the organization selected. The research method adopted by the researcher was the survey research method. The major instrument of data collection was the questionnaire. The sources of data used were the primary and secondary sources of data. The population of the study was 1095 while the sample size of 293 was determined using the Taro Yamane’s formula. The data collected was presented in tables of frequencies, percentages using the five point likert scale. The hypotheses were tested using the chi-square distribution formula. The findings include that Forecasting the future demand of the products of the three selected organizations positively affects the units of output of the organizations, prompt delivery of the inputs of the three selected organizations has a significant relationship with timely production of the finished products, among others. The researcher therefore concludes that production planning and control have a positive effect in the management of business organizations. It was then recommended that management of organizations should always adopt the principles of forecasting in their day-to-day activities as it has a positive effect on the units of output that organizations should also take into consideration the prompt delivery of their inputs as it has a significant relationship with timely production of their finished products among other recommendations.
TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.1     Background of the Study                        
1.2     Statement of the Problem                        
1.3     Objectives of the Study                         
1.4     Research Questions                            
1.5     Statement of Hypotheses                         
1.6     Significance of the Study                        
1.7    Scope of the Study                             
1.8    Limitations of the Study                        
1.9    Historical background of the Study                
1.10    Operational Definition of Terms                    
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1    Conceptual Framework of the Study                
2.1.1 Concept of Production                        
2.1.2 Concept of Production Planning                
2.1.3 Concept of Production Control                    
2.1.4 Concept of Production Planning and Control        
2.1.5 Objectives of Production Planning and Control        
2.1.6 Factors Affecting Production Planning and Control    
2.1.7 Functions of Production Planning and Control        
2.1.8     Concept of Management                        
2.1.9 Tools of Production Planning and Control            
2.1.10 Concept of Breakeven Analysis                   
2.1.11 Concept of Network Analysis                    
2.2     Theoretical Framework of the Study                
2.2.1 Queuing Theory                            
2.2.2 Theory of Limiting Constraints                    
2.3     Empirical Review                             
2.4 Summary of Review of Related Literature            
2.5 Gap in the Review of Related Literature            
CHAPTER THREE
METHODOLOGY
3.1    Research Design                            
3.2    Sources of Data                            
3.2.1    Primary Sources                            
3.2.2 Secondary Sources                            
3.3    Area of the Study                            
3.4     Population of the Study                        
3.5    Sample Size Determination                     
3.6     Instruments for Data Collection                
3.7    Validity of the Instrument                     
3.8    Reliability of the Instrument                    
3.9     Method of Data Presentation and Analysis        
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS
4.1    Data Presentation and Analysis                 
4.2    Bio-Data                                    
4.3     Data Relating To Research Questions            
4.3.1 Research Question One                        
4.3.2 Research Question Two                        
4.3.3 Research Question Three                        
4.3.4 Research Question Three                        
4.4    Test of Hypotheses                            
4.4.1 Test of Hypothesis One                        
4.4.2 Test of Hypothesis Two                        
4.4.3 Test of Hypothesis Three                        
4.4.4 Test of Hypothesis Three                        
4.5    Discussion of Findings                         
4.5.1 Discussion Based on Hypothesis One            
4.5.2: Discussion Based on Hypothesis Two            
4.5.3: Discussion Based on Hypothesis Three            
4.5.4 Discussion Based on Hypothesis Four            
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1    Summary of Findings                         
5.2     Conclusion                                 
5.3     Recommendations                             
5.4    Contribution to Knowledge                     
5.5     Suggestions for further Research                
List of References                             
Appendix                                    
Questionnaire                                
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
    It is important and essential to integrate the production planning and control system of organizations, for efficient, effective and economical operation of any organization. According to Sharma (2014) production planning and control can be viewed as the various system of production management. It aims at efficient utilization of material resources, people and facilities in any undertaking through planning controlling and coordinating the production activities that transform the raw materials into finished products or components at the most optimal manner. Production planning and control address a fundamental problem of low productivity, inventory management and resource utilization (Nwachukwu, 2015).
    Production planning is one part of production planning and control dealing with basic concepts of what to produce, when to produce, how much to produce etc. it involves taking a long-term view at overall production planning. Therefore, the objectives of production planning include to ensure that capacity utilization is in tune with forecast demand all the time and to ensure that the right quantity and quality of raw materials, equipment, etc are available during times of production (Baryoko, 2014). A well thought production planning ensures that overall production process is streamlined providing the following benefits: organization can deliver a product in a timely and regular manner, suppliers are informed well in advance of the requirement of raw materials, it reduces investment in inventory and it reduces overall production cost leading to efficiency.
    Furthermore, production control, which is the other part of production planning and control, looks to utilize different types of control techniques to achieve optimum performance, out of the production system as to achieve overall production planning targets. Therefore, the objectives of production control are as follows: to regulate inventory management, organizing the production schedules and optimal utilization of resources and production process (Ayo, 2016). The advantages of robust production control are as follows: ensure a smooth flow of all production processes, ensure production cost savings there by improving the bottom line, control wastage of resources and maintain standard quality through the production life cycle.
    However, production planning and control aim at efficient utilization of material resources, people and facilities in any undertaking through planning, controlling and coordinating the production activities that transform the raw material into finished products or components at the most optimal manner. The factors affecting production planning and control include that the demand of certain products is affected by season and production planning and control must take such changes into consideration. Furthermore, Umeadi (2015), stated that other factors affecting production planning and control include after sales services, losses due to predictable and unpredictable factors, design changes and catering for contingent plans to take care of rework, without affecting scheduled quality.
    According to Mullins (2014), production planning and control practices vary from plant to plant and organization to organization. Though, no production control function can be entirely eliminated, the least control that results in effective operation of the factory is the best control. Amele (2015), stated that it must be remembered that production planning and control systems, should be tools of management. The objectives is not an elaborate and detailed system of controls and records, but rather, the optimum operation of the plan for maximum profit.
    However, Tunde (2014), posits that in Nigeria, where many of the manufacturing firms are inexperienced in terms of technical know how, production planning and control and control become imperative in order to avoid waste of resources. This is so because production planning  and control is a blue print for action. Unfortunately, Nigeria manufacturing organizations do not undertake adequate production planning and control. Hence this research examined the effect of production planning and control in the management of business organization with three selected manufacturing organizations in Enugu State as a case study.
1.2    Statement of the Problem
    Production planning and control are an essential ingredient for success of an operation unit, but failure to engage in it has, given rise to inefficiency in many manufacturing organizations in Nigeria. This is because those organizations would not be able to deliver products in a timely and regular manner, Moreover, smooth flow of all production processes is not ensured coupled with inability to maintain standard  quality through the production life cycle.
    Furthermore, the idle time is increased, which is attributed to the fact that the production time is not kept at optimum level and the machine items are not properly scheduled. Moreover, the overall production process is not streamlined, resulting to increase in overall production cost. In addition, improper coordination and interrupted production have given rise to inefficiency in those manufacturing organizations.
1.3    Objectives of the Study
    The general objective of the study was to examine the effect of production planning and control in the management of business organization. However the specific objectives include:
1.    To ascertain the effect of forecasting the future demand of the products of the three selected organizations on units of outputs.
2.    To investigate the relationship between prompt delivery of the input of the three selected organizations and timely production of the finished products.
3.    To evaluate the relationship between the required composition of the input and cost of production of the three selected organizations.
4.    To determine the effect of scheduling of the workforce, machines and equipment on smooth flow of production in the organization selected.
1.4    Research Questions
    Based on the objectives of the study, the following research questions were raised
1.    What is the effect of forecasting the future demand of the products of the three selected organizations on units of outputs?
2.    What is the relationship between prompt delivery of the inputs of the three selected organizations and timely production of the finished products?
3.    What is the relationship between the required composition of the inputs and cost of production of the three selected organizations?
4.    What is the effect of scheduling of the workforce, machines and equipment on smooth flow of production in the three selected organizations?
1.5    Statement of Hypotheses
    Based on the research questions, the following hypotheses were formulated.
Hypothesis One
H0:     Forecasting the future demand of the products of the three selected organizations does not positively affect the units of output of the organizations.
H1:    Forecasting the future demand of the products of the three selected organizations positively affects the units of output of the organizations.
Hypothesis Two
H0:    Prompt delivery of the inputs of the three selected organizations does not have a significant relationship with timely production of the finished products.
H1:    Prompt delivery of the inputs of the three selected organizations has a significant relationship with timely production of the finished products.
Hypothesis Three
H0:    The required composition of the inputs does not have a significant relationship with cost of production of the three selected organizations.
H1:    The required composition of the inputs has a significant relationship with cost of production of the three selected organizations.
Hypothesis Four
H0:    Scheduling of the workforce, machines and equipment do not have a positive effect on smooth flow of production in the three selected organizations
H0:    Scheduling of the workforce, machines and equipment have a positive effect on smooth flow of production in the three selected organizations
1.6    Significance of the Study
    This study will be beneficial to the production managers of various manufacturing organizations because they will be able to coordinate various departments, such as production, marketing, logistics, warehouse and other departments for smooth flow of production. The general public will benefit as it will lead to job creation. The researcher will benefit as the research work is a pre-requisite for graduation. The university will benefit, as the research work increases its data bank. The research will also serve as reference material for further research on this topic.
1.7    Scope of the Study
This research work covered the effect of forecasting the future demand of the products of the three selected organizations on the units of output, the relationship between prompt delivery of the input of the three selected organizations and timely production of the finished products, the relationship between the required composition of the inputs and quality of the products of the three selected organizations and the effect of proper coordination of the workforce, machines and equipment on smooth flow of production in the organization. The organizations that were covered include, Nigeria Breweries Plc, Ama, Innoson Technical and Industrial Company Limited and Nigerian Bottling Company Plc Ngwo, all in Enugu State.
1.8    Limitations of the Study
The researcher encountered some impediments in the course of carrying out this research work, such as:  
Negative attitude of the respondents: The members of staff of the three selected organizations were economical with information. They thought the researcher was sent by their employers to get information which could be used to victimize them.
Time: Given the short time allowed, it was not easy combining the lecture time and the time allocated for this research. I overcame this limitation through the help of their managers who educated and sensitized them by letting them know, that this is just for the academic exercise.
1.9 Historical Background of the Study
1.9.1 Nigeria Breweries Plc Ama, Ninth Mile Corner, Ngwo.  
    Nigeria Breweries Plc, is a subsidiary of the Dutch brewer, Heineken. The company is Nigerian’s pioneer and largest brewer with current annual production capacity estimated at 10mn hectoliters founded in 1946, Nigeria Breweries operates 5 breweries in Nigeria. The first was commissioned in Lagos in 1949 and four others have subsequently been established in Aba (1957), Kaduna (1963), Ibadan (1982), Enugu (1993) and Ninth Mile Ngwo (2003), providing a geographical spread across the country, albeit bias for cities in the southern part of Nigeria.
    Nigeria Brewer with Guinness Nigeria, constitutes a formidable oligopoly in the Nigerian beer market, with an 80% combined market share over the years, Nigerian Breweries has Launched a series of alcoholic and non-alcoholic brands, carefully crafted for the Nigerian consumer, these include Star Lager Beer, the company’s flagship product. Others include Gulder lager beer, Heineken, Maltina (malt drink in four variants-maltina classic, maltina straw berry, maltina exotic and maltina with pineapple) and legend extra stout.
    Listed on the Nigerian stock exchange in 1990 NB is one of the most capitalized and actively traded companies, outside the banking and insurance sectors. As at December 2007, the company had 131,026 shareholders. Heineken N.V of Holland has a majority shareholding of 54.1%.
    In its resolve to maintain leadership of the beer market, NB Launched the Local Production of the Heineken brand, an international high quality premium beer in 2004. This marked the high point of a two-year process to position Heineken, which was previously imported into the country, as a locally produced brand. Currently, the company produces Heincken beer in its new state of the art brewery in Ama (Enugu State, South East Nigeria).
    In addition, NB recently introduced MALTINA SIP-IT, a variant of Maltina in a Handy Pack’. One of the latest additions to NB’s product range is the new Gulder max-a stronger, darker and higher gravity brewed variant of the regular Gulder with a 6.5% alcoholic content. The introduction of Gulder max was designed to strengthen the existing brands and to increase the beer options as obtained elsewhere in the world.
    Despite its rapid growth in recent year, NB is noted for its efficient cost management an effort that contributed to the liquidation of the company’s huge debt profile in 2006 and won the company an award for the best cost saving company within the Heineken group.  
1.9.2 Innoson Technical and Industrial Company Limited
     Innoson Technical and Industrial Company Limited Produces the best plastic products in the country. Products includes chairs, jerry cans, drums, motorcycle parts etc. Innoson Technical and Industrial company limited is a subsidiary of Innoson Group of Companies and was incorporated in 2002 with its Head Office/Factory situated at plot W/l Industrial layout, Emene, Enugu state, Nigeria. Full scale operations and production commenced in October 2002. It is an indigenous blue chip company engaged in the manufacturing of plastic chairs, tables, trays, plates, spoons, cups Jerry cans of different sizes and many other allied products.
Since inception, this company ranks the biggest plastic industry in Nigeria. It produces the highest quality range of plastic products of international standard and has a production over 10,000 pieces of chairs and tables per day. Due to the rapid demand of these products, the company’s twelve production lines of injection moulds have since been increased with tremendous and near perfect production lines of international standard.
It was also established to further consolidate our leading position in the motorcycle industry by producing the motorcycle plastic requirement of Innoson Technical and Industrial company limited which is a sister company. This effort was in direct response to the Federal Government  policy direction towards encouraging private sector as the engine of growth for the economy.
The company has an annual turnover of 3.6 billion naira. The company also has a foreign partner in china named CRETEC Industries Company Limited, whose wealth of experience is unquantifiable.
Innoson Group of Companies was incorporated in 2002 and has many subsidiaries including: Innoson Nigeria Limited, manufacturers of vicarious kinds of motorcycles and tricycles, based in industrial city of Nnewi, Anambra state: Innoson Technical and Industrial company limited.  Manufacturers of all kinds of plastic and allied products, based in Enugu which the researcher used as a case study.
1.9.3 Historical Background of Nigeria Bottling Company (NBC) Plc
In 1953, the production of Coca-Cola, began at a bottling facility in Ebute-Meth Lagos State.  In the same year, the company opened its first bottling plant in Apapa. In 1960, the year of Nigeria’s Independence, NVC exceeded the one million cases a year mark.
    In 1961, NBC commissioned its second bottling facility at Ibadan, Oyo state and rapidly expanded its operation over the next couple of years, which today stands at 13 facilities and 64 depots across the country. In 1972, NBC became a publicly quoted company and listed its shares on the Nigerian Stock Exchange. NBC acquired the Eva Premium Water and Schweppes brands in 1991. In 2000, NBC became a member of the newly formed Coca-Cola Hellenic Bottling Company.  An anchor bottling group with operations in 28 countries worldwide. In 2001, the first ultra-modern fully automated NBC plant was commissioned in Benin.  In 2003, NBC launched the five juice brand. PET packaging for its sparkling soft drinks category in 2004 and 33cl can in 2007. In 2009, NBC introduced the more environmentally friendly ‘ultra’ glass packaging for its Returnable Glass Bottle Product segments.
In October 2011, NBC was awarded the social Enterprise Reporting Awards (SERAs) for the ‘Best Company in Environment for its PED Recycling Property Jointly Implemented with Coca-Cola Nigeria Limited as well as for the most socially responsible company in Nigeria. In November 2011, NBC became the first company in Nigeria to receive the food safety system (FSSC 22000) certification in April 2013. Coca-Cola HBC AG was listed on the premium segment of the London Stock Exchange and Coca-Cola was also voted winner in the Non-alcoholic beverage category at the maiden Nigerian Consumer Awards (NICA). In 2015, NBC was recognized by the Lagos state government as a category “A” sponsor of the support our school’ initiative with the LASGCSR Award.  The company also won the award in 2010 2012, 2013 and 2014.
1.10    Operational Definition of Terms
Production Planning: This is the forecasting of the demand of a company’s product, and translating that demand into the requirements of the inputs.
Production Control: This is the design and implementation schedule, which shows the task to be performed on a certain work within a given time frame.  
Production Planning and Control: This is concerned with implementing the plans, i.e. the detailed scheduling of jobs, assigning of workloads to machines and people, and the actual flow of work through the system.