EFFECT OF PRODUCTION MANAGEMENT TECHNIQUES ON PRODUCT QUALITY IN SELECTED MANUFACTURING FIRMS IN SOUTH EAST NIGERIA

ABSTRACT

The study on the effect of production management techniques on product quality in selected manufacturing in South East Nigeria was motivated by the need to provide solutions  to  the  problem  of  quality  and  production  management  techniques  on product quality in manufacturing firms in South East, Nigeria.  The study set out to accomplish the five specific objectives form which appropriate research questions and hypotheses were formulated. The study adopted survey design. The population of the study was 9,285 staff of the 39 selected manufacturing firms in Abia State, Anambra state, Enugu State and Imo  state in South East Nigeria. A sample size of 564 was determined  form  the  population  using  Godden  formal  sample  size  determination models.  Pearson  product  moment  correlation  coefficient  was  used  in  testing  the validity and the reliability of the research instrument. The result was 0.98 indicating a high  degree  of reliability.  The hypotheses  were tested  non paramentric  statistical technique which included  spearman’s rank order correlation, Analysis of  variance (ANOVA) and Pearson product moment correlation coefficient. The major findings of the  study  were  that  programming  technique  had  a  significant  positive  effect  on production  plan  (r  cal   =  0.99  >  r  critical  =  0.95).  There  was  significant  positive relationship between product ordering technique and needed resource output. (F cal =

170.57 > F critical =10.59). Dispatching technique had a significant positive effect on

production  activities  (Pcal  =  0.05  >  Pcritical   =  0.95).  Follow-up  technique  had  a

significant  positive  effect  on  production  control.  (P cal  = 0.05  > Pcritical  =  0.82).

Quality control techniques had a significant positive effect on process designing (Pcal

= 0.818 > p = 0.96). The study concluded that the application of modern production

management techniques will transform human resources manufacturing  practice  in South  East  Nigeria.  This  will  place  Nigeria’s  firms  as  global  players  in  the manufacturing sector. Based on the findings, these recommendations were made that, the  manufacturing  firms  should  invest  in  human  capital  in  the  area  of  modern production techniques. Product ordering technique should be highly observed for best practice  in global manufacturing  and  business.  Dispatching  technique along  with other  production  activities  should  be   strictly  observed  in  practice.  Follow-up technique has to be maintained to facilitate the utilization of best practices. Because of globalization, quality control techniques have to gain way for best practice I global manufacturing.  The  interference  of manufacturing  Gross Domestic Product should improve   its   contribution   to  manufacturing   by  interfering   on  the  adoption   of international best practices in manufacturing.

CHAPTER ONE INTRODUCTION

1.1       Background of the Study

Production management is concerned with the management of all activities involved in the provision of goods and services, and it is central part to the  manufacturing process. Its responsibility is resource planning as well as  controlling the processes involved  in converting raw materials  and components  into the finished  goods and services  required  to  satisfy  the  needs  and  wants  of  the  existing  and  potential customers (Cole, 2004: 306). In a market oriente  d organization production begins with the customer in the market place. Production management refers to activities that relate to the creation of goods and services through the transformation of inputs into outputs, while product quality is the combination of features and characteristics of product  that  contribute  to  its  ability  to  meet  customer  value.  Production  in  an economic sense involves any value creation ranking all the way from manufacturing, mining, farming, on the one hand, to retailing or the provision of such services as transportation, entertainment or taxi ride an the others.

Every business firm justifies its existence by producing something of value. This may be done by changing the form of things, as in the case of manufacturing.  Matter is created by nature; man changes its form to make it more valuable. Another way of producing is by changing the location of things, such as business enterprises engaged in transportation.  Value is created when the sugar and milk  one needs are brought close  to  one’s  home  where  you  can  gain  access  to  them.  Production  can  be accomplished  by  providing  goods  and  services  at  certain  times  and  convenient amounts as in the wholesaling and retailing, or by delivery of goods to customer. In a similar manner, a service may be provided either by adding value to goods  such as repairing a watch, or serving the  convenience  needs of customers and clients or by providing  personal services  of  one type or another or at one time or another.  For example, a bank produces financial services by accumulating or assembling savings and making them available to those who wish to borrow money.

Production and operations management goes well beyond manufacturing operations – involving the assembly of products,  the operation of banks, transportation companies, hospitals and clinics, school systems, insurance companies, and high-level technology from any system that generates tangible products (for instance a ford automobile) or

intangible  services (for example  a flight on Nigeria  Airlines,  advice on  computer programming) part of the domain of production and operations management (Gibson,

1998:478-479).

Production  and  operations  management   is  a  specific  function  that  affects  the behaviour and performance of other major functions like marketing and  accounting. The interrelationships of these three main functions of any organization can be better understood  by thinking of an organization  as a  system.  The marketing  subsystem deals primarily with the demand side of business, the accounting subsystem addresses the control side of business the  production and operations management  subsystem centers  around  converting  inputs  into  outputs or the supply  side  of business.  No matter  how great the  demand  is for a product or service,  there must be a supply available. Producing enough goods and services to meet demand is the primary task of organizations, according to the production and operations management viewpoint.

Production  management  techniques  are tools  used  in improving  an  organization’s goods or services required by the customer. Production management techniques are the processes of determining what should be produced and how it should be realized. Appleby (1976) notes that defects are too high and companies should put programmes in place that will move them continuously towards the goal of zero defects. Generally, the main idea behind effective quality is that poor quality is erroneous. The costs of poor quality should include all the costs of not doing the job right at the first time, scrap rework, loss of hours/labour, machine, sales, warranty and hidden customer ill will. Waller (1999:90) strongly believes that, the cost of poor quality is to understand that unlimited amount can be profitably spent on improving quality.

Buffa (1980:8-9) notes that the great monuments of the ancient world required both technical know-how and a managerial system that organized resources,  made grand plans and executed  those plans with excellent  results.  Examples  are the Egyptian pyramids and sphinxes at Gizeh in about 2500 BC, the Greek Partenon in about 440

BC, the Great Wall of China in about 214 BC; others are the construction marvels of the Roman world-aqueducts public buildings, roads and temples-which span a periods including at least 400-100 BC and the Ibos who dragged huge logs from far distance to their public square for wooding gung (Ikoro). During and following the period of the building of the ancient monuments,  a wide variety of products were produced

through  the  handicraft  system  production  and  operations  management  began  to develop with the industrial revolution, since it was during that period that the factory system  evolved  out  of  the  handicraft  system.  A  series  of  change  in  industrial technique,  and  in economic  conditions,  made  possible  the  development  of  larger productive units.

Chinese philosopher, Mencius (Cira 372-289) notes only dealt with the concepts of system and models in an almost contemporary fashion, but pointed out the advantage, to the individual and society, of division of labour. The ancient Greeks certainly were aware of the value of uniform work methods, as evident in an  Army manual that detailed  how soldiers should arrange their cloths and  weapons in encampments  to enable dressing and arming at a moment notice. Plato (Circa 427-347) acknowledges the merit of division of labour in his assertion that a man whose work is confined to such a limited task (e.g. shoe stitching) must necessarily excel at it. Clande (1968:10-

13)  supports  this  view  in  his  argument  that  work  specialization  was  in  fact  so extensive in Greece that stone mabons did not even sharpen their own cutting tools, relying instead upon a specialist support staff.

The dominance of feudalism in the period between the fall of the Roman Empire and the   Renaissance   from   14th-15th     century   inhabited   the   development   of   new technological and managerial ideas. Only towards the end of the fourth century did a development of major significance occur: the clock. This device by enabling precise

co-ordination for man’s activities, led the historian Lewis Mumford to state that the clock, not the steam Engine, is the machine of the modern industrial age. For every phase of its development in the clock is both the outstanding fact and typical symbol of the machine: even today no other machine is so ubiquitous (Mumford, 1934:13).

The works of Adam Smith and Eli Whitney dominate the historical development of the  1700s.  In  his  classic,  Wealth  of  Nations,  Smith  noted  with  respect  to  pin manufacture, that division of labour increases output for three reasons.

          Increased dexterity on the part of each worker.

         Avoidance of lost time due to handling.

           The invention  of a great  number of machines  which facilitate  and  abridge labour and enable one man to do the work of many (Smith, 1976:7-8).

These observations were of particular significance since they laid the groundwork for the subsequent  development  of modern work simplification,  process  analysis,  and time study. Eli Whitney’s use of interchangeable parts in the making of guns paved the way for rapid production of other multi component assembled items. Whitney also employed cost accounting concept and quality control procedure at his musket factory (George, 1968: 63).

An interesting  historical  anomaly in the development  of the application  of  highly advanced production techniques can be found in the operations of Shoe Engineering Foundry in England at the beginning of the 1800s. According to Clande George Jr., this  remarkable  firm  left  concrete  evidence  of  market  research  and  forecasting, planned   site  locations,   machine   layout  study,   standard   production,   production planning,   standardized   components,   cost   control   application,   cost   accounting, employee training, work study and investment, and an employee welfare programme. If these practices in fact exist, it would be difficult to dispute George’s claim that the Shoe Foundry was a century ahead of its time (George, 1968: 60).

As  the  father  of  scientific  management  and  contributed  to  personnel  selection, planning, scheduling, motion study, and the now popular field of human factors. His major contribution is his belief that management should be  much more resourceful and aggressive in the improvement of work methods.  Another contribution was the distinction between management (for example those who plan, organize staff, direct and  control)  and  labour.   He  believed   that  management   should   assume   more responsibility for;

         Assisting employees in selection of the right job, given their capabilities.

         Providing the proper training

         Providing proper work methods and tools

         Establishing legitimate incentives for work accomplished

Ford and Sorenson (1913) combined what they knew of standardized parts with the quasi-assembly  lines of the meat packing and mail order industries and  added the concept of the co-ordinate assembly line. Charles Sorenson was the one who towed an automobile chassis and rope over his shoulder thorough the ford plant while others added parts. Sorenson’s development of the model T assembly line demonstrated to

the world the advantage of the assembly line for repetitive manufacturing.  He  also designed  willow fund during World War II, which eventually produced  one B-24 “liberator” bomber each hour.

Another   historically  significant   contribution   is  that  of  quality  control.   Walter Shewhart  (1924)  combined  his  knowledge  of statistics  with  the  need  for  quality control and provided a foundation for statistical sampling and quality control. Deming (1950) believes, as did Taylor (1919), that management must do more to improve the work environment and processes so that quality can be improved.

Quality has been an important part of human activities since the emergence of human history. Before now, manufacturing was essentially conducted by the cottage industry and heavily relied on craftsmen. The manufacturers were merely in seller’s market; however,  the trend  has  changed  from  seller’s  market  to  the buyer’s  market.  The consumers have become more aware of the variety of products in the market. Thus, customers are the focus of  manufacturing such that every organization  has to study what customers needs are and satisfy them in order to remain in business by offering products of desired quality.

Although  several  reasons  have  been  accountable   for  substandard   products   in manufacturing  sector,  Arora  (2009)  notes that  quality of  goods is  determined by customers.  Customers  become  a  key  factor  that  can  create  competition  among organizations and this make firms to focus more on quality. This is due to effective quality which determines  the rate of productivity  and  thus becomes  an important factor in organization and also contributes to the growth of the economy.  The usage of poor basic materials for production process has given way to the existence of sub- standard products in the Nigeria industry, making the product not to measure up to the standard   of   specification   as   expected.   This   has   resulted   in   productivity   of organizations  dropping  because  of customers’  inability to buy such bad  products. Where the company fails to measure up and the products identified, such products are usually  confiscated  or destroyed  and  such  company  may be  closed-down  by the regulatory agencies pending when issues are resolved. So, instead of the companies making profit, huge amount of loss is incurred as a result. Some producers produce sub-standard  varieties  of  products,  different  from  the   ones  they  presented  for certification to regulatory agencies.

Demirbag  (2006)  notes  that  quality  control  and  improvement  is one  of the  most important   factors  in  every  organization.   Successful   enterprises   understand   the dominant  influence  customer-defined  quality  can  have  on  business.  Hence  many competitive companies constantly enhance their quality standard by introducing total quality  control  departments  in  their  organizations  whose  policies  are  aimed  at satisfying customers by giving them standard quality products, excellent services and timely delivery. They go further to explain the need for organizational development by  training   staff   for   such   responsibilities.      Taking   a   historical   perspective, organizations  who  are  highly committed  to  the implementation  of quality control usually maintain quality standard in production which in turn provides a direction to the business.

Operations management will continue to progress based on contributions from several other disciplines. The analytical methodologies applied to total quality management (TQM) were initially established by Frederick Taylor to yield what he called scientific management.   These   have  evolved   into   a  field  of  industrial   engineering   and management  science and these disciplines  have contributed  substantially to greater productivity. They bring together diverse disciplines such as mathematics, statistics, management and economics to make possible systematic analysis and improvement of operating  systems  as  well  as  such  tools  as  linear  programming,  queuing  theory simulation, and statistical analysis.

Applications  from  the  biological  and  physical  sciences  also  have  contributed  to quality control in a variety of ways. Innovation from biology, anatomy,  chemistry, physics  and  the  engineering   sciences   have   brought   about   a   variety  of  new developments. These include new adhesives, chemistcal processes for printed circuit boards  and  gamma  rays  to  sanitize  food  products.  An  important  contribution  to quality  control  has  come  from  the  information  sciences  which  we  define  as  the systematic processing of data to yield information. In a modern business organization, information management implies the use of computers.

1.2       Statment of the Problem

Nigerian manufacturing firms are expected to produce high quality product that can compete globally. Focusing on manufacturing firms in South East Nigeria precisely, in respect of the above, the manufacturing firms are required to pursue maximisation

of opportunity.  There should  also  have a global out look in their  special field  of production to enable the embracing of international best practice and also engage in outsourcing.

Most  Nigerian  manufacturers  are  dependent  entrepreneurs  who  rely  heavily  on government  support.  They are not creative.  They have no global skill in  practice, unfortunately this negative trend has resulted in domestic scale of business and lost of customers arising form global competition.

Most  of  our  manufacturers   are  not  prepared  entrepreneur   as  they  lack   basic managerial skill. They really apply international best practice and lack the  capacity for outsourcing or even follow-up opportunities open to them. They hardly engage in collective risk or pursue maximisation of opportunities.

Harsh  operating  environment  of  business  in  South  East  Nigerian  arising  from perennial electricity shortage, political instability, insecurity, dearth of infrastructure, high foreign exchange rate and increase in the cost of production.

Production    management    techniques    and    effective    product    quality    require manufacturers  to  improve  on  their  performance  in  the  realisaton  of  goals  and objectives. There is no indication that they are sufficiently and  properly applied in manufacturing organizations in South East Nigeria.

1.3       Objectives of the Study

The main purpose of this study is to examine the effect of production management techniques  on  product  quality  in  selected  manufacturing  firms  in  South  East  of Nigeria. The specific objectives of the study are:

i.      To examine the effect of programming technique on production plan.

ii.      To  ascertain  relationship  between  product  ordering  technique  and  needed resource output.

iii.    To determine the effect of dispatching technique on prdouction activities. iv.    To assess the effect of follow-up technique on production control.

v.      To  ascertain  relationship  between  quality  control  technique  and  process designing.

1.8       Research Questions

The stated objectives of the study give rise to a number of questions; the questions are as follows:

i.       What is the extent of the effect of the programming technique on production plan?

ii.      What  is the  extent  of the  product  ordering  technique  on needed  resource output?

iii.    To what extent is dispatching technique relate to production activities?

iv.    Does  the  application  of  follow-up  technique  have  effect  on  production control?

v.      What  is  the  extent  of  the  effect  of  quality  control  technique  on  process designing?

1.5       Research Hypotheses

In an effort to discover the effect of production management techniques for effective product quality, the following hypotheses are formulated or postulated to enable the researcher   have good focus on the study.

i.         Programming technique has a significant positive effect on production plan.

ii.        There is a significant positive relationship between product ordering technique and needed resource output.

iii.       Dispatching technique has a significant positive effect on production activities. iv.       Follow-up technique has a significant positive effect on production control.

v.         There is a significant positive relationship between quality control technique and process designing.

1.6       Significance of the Study

The following are the significance of this study.

i.       This study is important in the sense that the research will help both private and public manufacturing firms and policy makers in Nigeria to have empirically- based information on production management techniques and product quality, and firms’ sustainability in south east states of Nigeria.

ii.      The current and future generations of private and public manufacturing firms will benefit from the knowledge and understanding coming from this research as it provides additional insights that the public shall enjoy quality products

equal  to  the  value  of their  money  as this  will  enable  other  organizations improve on their performance.

iii.    This equally believes that its findings will inspire organizations to improve on their  performance,  thereby  attracting  more  investors  and  more  investment which will increase the rate of economic growth for sustainable development.

iv.    This study will benefit academics in institutions of higher learning, captains of

industries  and  students,  since  it  will  throw  more  light  on  the  theoretical framework and empirical data on production management techniques, product quality and manufacturing firm’s sustainability.

v.      This research work will be a contribution to the existing body of knowledge as it will serve as a reference material.  Generally, on completion of this study, the findings will provide a base and framework for further studies in the field to future researchers.

1.7       Scope of the Study

The study is on the effect of production management techniques and product quality in manufacturing firms in the South-East states of Nigeria, comprising the selected manufacturing  firms in Abia state, Anambra state, Enugu state and  Imo state. The study focused on public and private manufacturing firms for sustainable development. The study covered the period 2010 to 2013. This  study is confines to the product quality activities in the production department of the organizations. In order to reduce the variability that will rise out of different contextual factors. This study only survey participants from public and private manufacturing firms from the South East States of Nigeria.

See Appendix 2, profile of selected organizations.

1.8       Limitations of the Study

Financial Constraint: The researcher spent lots of money to source information from the internet. Furthermore product quality is relatively new in the business organization and as a result, there is lack of readily available data on the subject. This limitation has led the researcher into scanning for primary data through questionnaire and oral interview.

Time Constraint:  The study was limited because of time available to conduct  the study. Also, some personalities booked for interview were not found on seat by the

time the interview was to be conducted leading to a continuous rescheduling of the interview.  However,  through  sheer,  determination  and perseverance  the  researcher was able to surmount these challenges and limit their effect on this study.

Attitude of Respondents:  Access to good or high quality data is fundamental  to research.  However,  the difficulties  in getting  access  to  such data were  many and varied. In collecting data for this study many of such problems were  encountered. Most of these data were regarded as classified or confidential  information by firms staff and were not readily made available.

1.9       Operational Definition of Terms

The following terms are defined in this study.

Automation:  It  is  manufacture  of  products  or  the  distribution  of  services  using computer operated equipment rather than human labour. In the long term, automated production produces more uniform products and unit costs are generally lower Benchmarking: It is rating a firm’s products, processes and policies in comparison with other companies in the same or another business. The objective is to see how the company is performing particularly relating to quality service and unit cost.

Computer Aided Design (CAP): It is the use of computer software to aid engineers to design products or process schemes using graphic and three dimensional displays. Continuous  Flow Manufacturing:  This is the  term  used  to describe  just-in-time production.

Continuous  Improvement:   Continuous  improvement   is  measured  in  terms   of producing things better, faster and cheaper and being more agile. To improve products and services it is necessary to go far beyond  the products and services  them. It is necessary to examine and improve the material and basic process intrinsic to them. Continuous improvement is thus synonymous with continuous process improvement. Continuous Process: It is an operation which have a very long and continuous cycle, where  volume  are  high but,  the product  variety  is  usually  lows  oil refining  is a continuous process operating continuously,eaxampld.  The product range is limited to propane or butane gas, petrol, kerosene, diesel and heavy oils.

Control: It refers to the process of measuring the actual result of the operation of an organization in relation to the result which was planned for the organisation either as a whole of direction and action accordingly.

Customer Service: It is defined as the output of the physical distribution system, the effectiveness  of which  is commonly  measured  by products  availability  and  order cycle time.

Effective Capacity: It is another expression for capacity utilization rule. Efficiency: Efficiency in operations is another way of expressing productivity Improvement  as  Strategy:  Improvement  as  Strategy  is  creating  the  operating capabilities a company will need for the future. Given that improvement, alternatives are the stepping stones to achieving long-term organizational goods.

Inspection: Inspection means where a product is checked for quality standard  and either accepted or rejected.

It  is  a  technique  use  for  planning  and  scheduling  large  project  in  the  fields  of construction, maintenance, fabrication and any other areas.

Just in Time (JIT): This is a management practice where the exact quantities of a product  are  produced,  purchased  or  delivered  only  when  needed.   Delays  and inventory levels are kept to an absolute minimum.

Materials Management: This refers to purchasing of raw materials and components through transformation to the storage of the finished product.

Product  Life  Cycle:  It  is  the  duration  of  the  life  of  products  ranging  from development birth or introduction through growth, maturity and decline to death. Product Quality: It is the combination of features and characteristics  of a  product that contribute to its ability to meet customer value.

Production   and  Operations   Management   P/OM:   Production   and   operations management (P/OM) are activities that relate to the creation of  goods  and services through the transformation of inputs into outputs.

Production    Management    Technique:    Production    management    techniques therefore’, focus on modern production process and modern features characteristics of products.

Production Management: It is the activities that relate to the creation of good and services through the transformation of inputs into outputs.

Production: Production is defined as the organization activity of transforming raw materials into finished product.

Productive  Liability:  It  is  the  risk  a  producer  or  others  take  regarding   the responsibility for the personal injury or harm resulting from the use of a product that they have supplied.

Quality Circle: It is a small group of employees who voluntarily meet regularly to analysis work related project with the objective of improving company operations. Quality Control: Quality control refers to an activity in  manufacturing  industries which aim to establish quality standards check that  they are being adhered to take corrective action where necessary and set improved standard where possible.

Quality Function Development (QFD): Quality function deployment is a method to

ensure that a new product  or service  satisfies  clients.  It is goal  is to develop  an appropriate design and then translate this into target throughout product development and production. QFD is also known as the house of quality because of its shape or the voice of the customer because of its purpose (Waller, 1998:818).

Quality Loop: This is a conceptual model of interacting activities that influence the quality  of  a  product  process  or  service   in  the  various  stages  ranging   from identification of needs to the assessment of whether these needs have been satisfied Quality  Management:  The  responsibility  of top  executives  is that  aspect  of the overall management function that determines and implements the quality policy. Quality Plan: It is a document that set out the specific quality practices relevant to a particular product process service contract or project.

Quality: Quality begins and ends with marketing.   Once customer requirement are defined, a quick reporting process is needed which should be maintained throughout design specification, manufacture and inspection.

Reliability: The probability that a machine part or product will function properly for a reasonable length of time.

Specification:  It  is  the  document  that  describes  in  detail  the  requirement  that  a product process or service has to meet.

Staff  functions:  These  are those  that  have  no  direct  responsibility  in  production output, such as a quality control inspector.

Strategy Plan: Strategy Plan is the deals with how an organization progress to arrive at its desired objective. The plan is often long term though firms may have short term strategies and gives the time frame the mission statement or charters for non-profit organizations.

SWOT Analysis:  It is a management  planning  tool for analyzing company  future strategy strength weaknesses and the external opportunities and threats.

Synchronized Production: It is producing a product at the same rate as demanded.

Time series: These are historical data such as sales revenues GNP or cash flow that have been complied over a regular period of time and may be used to forecast

Total Productive Maintenance: It is defined and organized programme that places a high value on teamwork consensus building and continuous improvement.

Total Quality Management  (TQM): It is management  focus on the knowing  the needs and wants of customers and on being capable of fulfilling those needs, wants. Value added Tax (VAT): It is a surcharge added to the sales price or  the cost of goods or services in theory based on the value added to the product.

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