THE EFFECT OF WAREHOUSE MANAGEMENT ON THE PERFORMANCE OF SELECTED BREWERY COMPANIES

ABSTRACT

The study examined the effect of warehouse management on the performance of selected brewery companies, a case study of Nigerian Breweries Plc, Surulere, Lagos state, Sona Breweries, Lekki, Lagos and Guinness Nigeria plc, Ikeja, Lagos. The study employed the survey design and the purposive sampling technique to select 450 staff across management, senior and junior level. A well-constructed questionnaire, which was adjudged valid and reliable, was used for collection of data from the respondents. The data obtained through the administration of the questionnaires was analyzed using the Pearson correlation analysis.

The results of the correlation analysis showed that there is positive and significant relationship between warehouse costs has significant effect on organizational productivity (r=0.772; p<0.05)., Also, a positive and significant relationship exists between stock control and organizational effectiveness(r=.896; p<0.05)., Furthermore, a positive and significant relationship exists between distribution planning and logistics performance (r=.896; p<0.05). The results were found to be consistent with empirical findings of past studies in literature.

The study concluded that warehouse management has significant effect on the performance of selected brewery companies in Nigeria. The study hereby suggest; Computerizing warehouse management should be employed by the management of every brewery companies; Brewery companies should ensure there warehouse are properly checked daily by the store keeper or store manager to safe the inventory from cracking, falling on each other or spoiling; Warehouse managers should be adequately remunerated through attractive compensation packages after employed in order to avoid temptation by the employees to stealing from the firm; Standard personnel and recruitment policies should be formulated and maintained for smooth warehouse management.

CHAPTER ONE

INTRODUCTION

1.1  Background to the Study

All over the world, there is a growing appreciation of the importance of warehousing to the profitability and sustainability of any organization. This is so because the effective and efficient management of any organization requires that all its constituent elements operate effectively and efficiently as a unit with warehousing been a critical element that constitutes the make-up of any organization (Alan, Phil & Peter, 2010).  More so in Nigeria where there are various companies offering the same or similar products which creates a lag between production and consumption, warehousing is key to the profitability and the sustenance of an organization (Ogbo, Onekanma, & Wilfred, 2014). This is true especially in the manufacturing industry in Nigeria with various companies producing homogenous goods that compete in the same market coupled with the fact that the entry barrier in the manufacturing industry is low this has made warehousing critical to the survival and the continued existence of any manufacturing organization in Nigeria (Anichebe & Agu, 2013).

According to Alan, Phil and Peter (2010), globally manufacturing companies both large and small enterprises face severe challenges when it comes to warehouses due to the skyrocketing costs associated with it. This has led to manufacturing organizations scrambling to find cost-cutting measures and higher operating efficiencies (Teece, 2010). Furthermore, large enterprises continue to seek to reduce the number of stocking locations and drive more productivity from the remaining distribution centers. Furthermore, in Nigeria, the cost of real estate has increased this has also affected the cost associated with warehouse management in Lagos. As a result many manufacturing organizations have incurred severe losses when they fail to clear out their stock on time. This has negatively affected their organizational productivity going forward (Anichebe & Agu, 2013).

Furthermore, manufacturing organizations around the world have struggled when it comes to controlling their stock. Stock control has to do with checking the stock available at any given time, and the methodology of tracking the available stock (Hershey & Blanchard, 2018). It also has to do with ensuring that appropriate amounts of stock are maintained by a business, so as to be able to meet customer demand without delay. In majority of large manufacturing companies in the world, digital inventory systems make up the bulk of the stock control devices (Chand, 2013). However, according to Anichebe and Agu (2014) most manufacturing companies in Nigeria still engage in crude methods of stock control which include using pen and paper to track their stock availability. This has led to many errors in stock control and which negatively impacted on the ability for brewery companies to carry out key operations like production on schedule and effectively. This has negatively affected the organizational effectiveness of brewery companies.

In addition, manufacturing companies globally face issues when it comes to distribution planning. The unpredictable nature of transportation all around the globe has made it difficult for companies to envisage the appropriate methods and means of delivering goods to customers. More so in Nigeria, due to the poor infrastructural nature of our transport systems manufacturing companies often have had challenges planning their distribution (Anichebe & Agu, 2013). According to Odepidan (2015) many manufacturing companies have as a result of these distribution challenges left their distribution planning and execution to third party logistics companies, some of whom consistently fail to deliver the products to customers on time. As such, the poor distribution planning of brewery companies has led to poor logistic performances.