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RAW MATERIAL MANAGEMENT IN A BREWERY INDUSTRY (A CASE STUDY OF GUINESS NIGERIA PLC)
The major fact the characterize the parents economic science in Nigeria is the man reduction of workers under utilization of factory capacities profit margin closing down of so many factories lost/ shortage of very essential industrial out put and consumer good etc.
There problems emerged from how the level of productions in industries have be developing difficulties in the requisition and handling of raw material in any production process.
No organization or firm can effectively carry out its duty activities in an organized manner without the interruptions in the flow of raw material.
The position enquired by raw material in the process of production now become reality applicator when the coot of acquiring such amenities is been compared to its total cost of production.
According to the encyclopedia of management by Heyez (1983) raw material handling represent thirty-five to forty percent (35-40%) of all production cost sometimes it is or such or seventy-five percents (75%)
From the above we can now see the importance of raw material management
David farmer defined material management or the concept concerned with the management of flow of material into an organization to the point where there material are converted into the firms prod into the firms products it is only when management become successful to the problems encountered with there raw material management and critically examine the effects on other function of the firm.
Hence this study of given breweries plc material management method so see if there company with the generally accepted practical method and the effect of such on the production process.
1.1 HISTORICAL BACKGROUND OF GUINESS BREWERIES PLC
Guinness Nigeria plc was established in the year 1950 and or at then the duty was to import and distribute Guinness stout from Dubum for sale in Nigeria.
As a result of its great success in the sale of the imported bear (stout) in Nigeria it was decided that the above brewery was built at the cost of N2.4 million in 1961. he brewery started production in 1962 this made Guinness Nigeria plc one of the first companies in the world is produce guineas stout outside Britain.
The factory was located at Ijeja (Ojibe) Lagos state and or at then it was producing only Guinness stout the company then because a public liability company in 1965 and was managed by Nigerians their maker it possible for Nigerians to being. Sharer in the company
Hence the Guinness Nigeria plc became one of the first companies to be quoted on the Nigeria stock exchange (them the Lagos stock exchange)
About one thousand Nigerians acquired some sharer in the company totally twenty percent (20%) of the equity of the company of that time
In 1970 following the increased demand due to high quality of the product the brewery was then expanded and also was it production capacity from thirty thousand tomes (30,000) in 1967 to sixty-four thousand tones (04.000) in 1970 the growth handed by the building of the brewery reached its peak in 1974 1982 and 1989 in 1974 a new brewery for harp larger been was commissioned in Benin city at cost of twelve million Naira (N 12m)
The commissioning of the brewery signaled the entry of the stout giant into the larger market.
In 1978 a new Guinness stout brewery was opened in Benin city at the appreciated at thirty million Naira (N30m) this was in addition to the one built in 1974 which was producing harp larger beer
Ti was the largest brewery build from locally generated funds sources of these fund include:
- The sale of 4,000,000 sharers Nigerians participation increased from 40% -46%
- N 6,000,000 2nd mortgage debenture 1978/91
- N 6,000,000 and 9% first mortgage debenture 1976
- N 8, 8000,000 from internal revenue
In 1982 the fifty two million Naira (N52m) uitra modern Ogba brewery for harp larger beer commended production. The brewery was rated or the most sophisticated in the whole of Africa in 1987 Guinness Nigeria limited a new product to its stout production. This product has the brand name of MERIT and reputed to its 100% locally sources currently Nigerians are holding seventy five (75%) percent of the companies sharer. While Guinness over sees the remaining twenty-five percent (25%) including Atlanta limited.
In 1970 the production of malt drink popularly known or Guinness malt was introduced which similarly is one hundred percent locally sources in the same year Guinness Nigeria limited was remanded to Guinness Nigeria plc in compliance with the provision of the companies and Allied matters decree (1990)
In 1995 another new product called “SATZENBRAU” was introduced and was one hundred percent (100%) locally sourced but will not be discussed due to security reasons
The decree provided or a matter of compulsion that every public company must and its name with the plc meaning public liability company
As at 1962 when the brewery first started it staff strength was only twenty-five (25) persons but at the time of this study it has increased to five thousand, two hundred and twenty (5,220) and above including junior middle and top management staff
Currently the company is into the production of the following products
- Guinness stout (large and small)
- Merit larger beer
- Harp larger beer
- Guinness malt
1.2 STATEMENT OF THE STUDY
A study of the brewery generally is Nigeria and particularly in Enugu state was revealed that little or no attention has been paid to the aspect of raw material management
Progressive partnership: A report of Guinness Nigeria limited 1967. one major concept of raw material management is that there should be regular supply of cheap sources of raw materials and should be the bares for are establishment of production plant.
In 1997 farmer according state that their it has been an area been neglected by he breweries in Nigeria for example the industry which started in Nigeria for so many years has water or its only raw material content. As is it of recent that it started using locally produced Guinness corn in the production process of beer (Diamond 1984)
The consequences of the above factory is an imminent problem facing brewery companies in Nigeria
Other include the federal government directive that or from January 1988 new material contents in the production of been should be one hundred percent (100%) locally sources there problems are bared on the following:
- Malted barely mops yeast and other major raw materials applied in the brewery are difficult to obtain.
- The use of one hundred percent (100%) level raw materials will have a raw material effect in the activities of the brewery new plant and machines will be used too also distention in the production process will size
- Also the use of one hundred percent (100%) local raw material will make for more research and development into the adequacy of the raw materials considered and this will means more money expanded on research and development.
One other area in which brewery has problem of raw material management is that of application of inventing techniques and quality control which minimizes wastages of cost
1.3 OBJECTIVE OF THE STUDY
Through this research work we shall look into the practical of raw material management of Guinness breweries plc. This study shall determine the following:
- The relationship between raw material acquisition sourcing inventing control and production
- The effectiveness and efficiency of the method and techniques adopted by the Guinness breweries plc Benin city in raw material management
- It will also find out if the Guinness brewery violated concepts of raw material management in order to know if there is availability of cheap sources of raw material.
- To find out if the inventory management has a direct effect on production process.
A H0: The organizaiton does not violate the concept of raw material
Management by importing raw materials from foreign countries
H1: They violate the concept of raw material management they do not buy
Raw material from abroad
B H0: Inventory management has a direct effect on production process
H1: Inventory management has a direct effect on production process
1.4 SIGNIFICANCE OF THE STUDY
Presently the situation of the Nigerian economy has made it imperative for breweries to apply cost management techniques for them to survive since the cost of raw material now take a large percentage of the total product cost. As such there materials must be produced and handled effectively from production point to maximum cost
Therefore a researcher should be able to find solution to problems built round the raw material management function after identifying them through the appreciation of raw material management techniques.
As such both the present and future management of the breweries would be left with solutions on how to articulate their activities so as to satisfy their material needs in the face of changing economic conditions.
The study will therefore enable the researcher to know the way of improving the efficiency and effectiveness of raw materials. Management techniques of guinea breweries plc.
2.1 LIMITATION OF THE STUDY
During the information-researched procedure, to me problems were encountered with the staff and there were built around the following factors.
The period within which such research is been carried out war not enough and didn’t go well with the staff of the company since more time war needed for them to provide all the technical information they require.
Most of the information’s needed by the researcher were branded “ classified” information and or a corporate policy were not given out for research proposes.
3). POOR RECORD KEEPING
Those persons where duty to produce most of the information’s needed bar no knowledge of such information’s.
Adewale A: Industrial Administration Medonald and Evans, Ltd. 1989.
Bello, T: The impact of material is steel industry 1997.
Ireson W.C. Factory planning and material handling section 6 it and book of
industrial management and Engineering (prentice hall) (Inc New Jersey 1987 pp. 342.
Johnson .R.A: production and operations management. A system concept
(Augitition Mifflin company USA) 1987 pp. 339-430.
The manager personnel, Department of Guinness Nig plc.