VARIETY REDUCTION AS A TOOL FOR EFFECTIVE MATERIALS CONTROL (A CASE STUDY OF NIGERIA BOTTLING COMPANY PLC)

Variety Reduction as a Tool for Effective Materials Control (A Case Study of Nigeria Bottling Company Plc)

CHAPTER I: Introduction

1.1Background of the Study

Variety reduction can be applied to any production process. The technique certainly has more effect if applied in the right place and at the right time.

Apparently in many organization, it is clearly to see organization be it manufacturing holding different number of types, size or grade of a product that can perform the same function, this means duplication of items, the cost of materials is the last remaining cost that is truly variable, a reduction in the cost of material clearly offers on usual opportunity for profit improvement, therefore the need for purchasing to minimize  waste and enhance maximum services within the organization has resulted in the use of variety reduction. Variety reduction can make a substantial savings in inventory by standardizing and rationalizing the range of materials, parts and component kept in store. Variety reduction can be achieved by using, so far as possible, standardized components and subassemblies to make end products that are dissimilar in appearance and performance so that variety of final products uses only a few basic components, variety reduction can also be applied when considering capital purchases, by ensuring compatibility with existing machinery, the range of spares carried to ensure against breakdowns can be substantially reduced also variety reduction can be undertaken periodically to examine arrange of stock items to determine

the intended use for each item of stock, how many stock item serve the same purpose, the extent to which items having the same purpose can be gives a standard description, what range of sizes is essential and lastly what items can be eliminated all these are done to ensure effective material control. Therefore, variety reduction can be defined as “the process of reducing the number of types, size or grades of a product that are purchase made or stocked (Hassan 2008 p. 445).

1.2             Statement of Problems

Among the objectives of all private sector is to maximize profit and reduce costs. These objectives can be achieved in material control aspect of the organization by imploring a strategy that will help or ensure that the number of types, sizes or grades of a product held in the organization are not duplicated when purchased, this will help in investing minimum cost on materials. But is quite unfortunate that these objectives are rarely achieved as a result of non recognition of the role of variety reduction in an organization as a tool for effective material control.

Variety Reduction as a Tool for Effective Materials Control (A Case Study of Nigeria Bottling Company Plc)