THE APPLICATION OF PRODUCTION SKILLS IN THE MANAGEMENT OF BUSINESS ORGANIZATION TO GAIN COMPETITIVE ADVANTAGE

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

Production skills (defined)

Industries and business organization be it private or public, have one thing in common, the human workforce, this could confidently be said, that organization, will not exist without its human resources, since a business organization cannot even start without a workforce, and effective and efficient skills, will gear the ability of the organization to stand out among its competitors.

Production control is defined by Burbidge (1992). In his book the principles of production control, “Is the function of management which plans, directs and controls the material supply and processing activities of an enterprise, so that the specified products are produced.By specific methods to meet an approved sales programme. These activities being carried out in such a manner that the labour, plant and capital available are used to the best advantage.

Poter (2006). In his book, effective entrepreneurship, he is of the view that companies can choose between three general strategy to build competitive advantage a differentiation strategy, a low-cost strategy and third approach, frequency used by entrepreneurs in focus, or ninche strategy. A firm that uses a differentiation strategy competes on the basis of its ability to do things differently than its major competitors do.

Beal, Reginald (2000). In his journal competing environmental scanning competitive strategy and organizational performance in small manufacturing firms is of the view that pursuit of an effective entrepreneurial strategy is mainly through advantages, has been mapped through the collection and analysis of information from existing and potential customers.

Boxalla (1996) Boxall 1996 defines strategy as a firm’s frame work of critical ends and means. This definition helps to make the point clear, that means do not flow unproblematically from ends. Rather the historically developed means to shape what ends are conceivable and possible.

Mitchell Porter (1984), Competitive advantage is a very basic word, a position a firm occupies against its competitors. The three methods of creating a sustainable competitive advantage are through: cost leadership, differentiation and focus.

Iornum (2005). In his book introduction to material management defines material management as practical in business today, as “ A confederacy of traditional materials, activities bound by a common idea; the idea of an integrated management approach to planning, conversion flow and distribution of production materials from the raw materials state to the finished product state. Managers or individual should understand that core competencies include the particular set of skills and resources firm posses as well as the way those resources are used to produce outcome.

Usage of these resources depends on the skills and ability of the human work force in the organization. Therefore the need for effective and skilled labour is required to stage ahead in competing with other competitors. The creation of knowledge is a dynamic and continues process.

  STATEMENT OF THE PROBLEM

In the past years, various issues to the effective management of industries and business organizations to gain competitive advantage over others have been noticed and highlighted as follows:

Unskilled Labour:

Unskilled labour has been the major problem facing industries and business organization, this is as a result of personnel managers, not recruiting and selecting employees, base on merit, skill, and expertise, but rather on selection based on man know man, a connection of whom you know to get to were you want. Hence, the effect is having the wrong people at the right place and thereby affecting the quality of service or product to be delivered to the market.

In Nigeria today, you will be surprise, seeing somebody who read a different course entirely been employed in a different field. i.e. a mechanical engineer working in a banking sector, such the expected performance will be upturned and unsatisfactorily.

Technology

Inability of industries and business organization. To use the modern ways to get things done, effectively and efficiently. Is another major problem, A supplier may be expected to produce technical, particularly during the early stages of design and manufacturing.

Late Delivery speed

Inability to make the product or deliver the service quickly “in some markets a firm’s ability to deliver more quickly than its competitors may be critical. A company can offer an on-site repair service in only/or 2 hours, has a significant advantage over a competing firm that guarantee service only within 24 hours.

In-ability to cope with changes in demand

Changes its volume, in many market, a company’s ability to respond to increase and decrease in demand is important to its ability to compete. Its is well known that a company with increasing demand can do little wrong.

Poor product quality and reliability

Customers wants product without defects, thus the goal of process quality is to produce defect-free products and services, product and service specification, give in dimensional tolerance and/or service error rate. Define how the product or services is to be made.

Adherence to the specification is critical to ensure the reliability of the product or service as defined by its intended use.

Cost or price

Is another problem when the price of any product is too high it affects its competitive strength in the market.

Scarcity of fuel/petroleum products

I find out that sometimes when the refineries are working in full capacity, the dealers and distributors of the petroleum products hoard these products and truck drivers are said to be diverting these product elsewhere.

The pipeline and products marketing company, should be also monitoring the activities of the tanker drivers, to ensure effective and efficient distribution of the petroleum products. However, all efforts have been to no avail, because usually during festival periods or towards the end of the year, fuel scarcity is experienced in most towns and cities in the country.

Most of these times there are no official explanation for the scarcity. There are unpleasant long queues of people waiting to buy petrol hours wasted by house wives looking for kerosene to cook for the family, since cooking gas is out of reach to an ordinary Nigerian.

With the suffering of the people in general and increase of transportation fare’s it does not speak well of an oil producing country like Nigeria for this reason, the situation needs to be properly addressed which is what prompted the researcher to undertake this research and also to give a situation analysis and meaningful recommendation.

OBJECTIVE OF THE STUDY

The objective of the study is to analyse the impact of production skills in the management of industries/business organization to portray how far the application of production skills in the management has helped the discipline level.

In this case therefore, it is important to note that management is a very complex situation, because human beings as individuals interact with one another in groups and in large organization. It is also very important to note that every human behaviour has a cause, there is a reason for a person behaving as he does.

It aims to explain that a favourable working environment couple with employees loyalty and commitment and skill to work increase productivity.

Finally, management could also gain from this study in that, it will help management to provide necessary refresher courses all categories of personnel to sharpen their already acquired skills.

It also helps the management in facilitating their objectives and aims which are as follows:

• To profitably export petroleum products to existing and potential market at a minimum cost
• To provide an un-interrupted supply  of crude oil to the refineries
• To stimulate the sale of special products and promote import subscription of petroleum products and special products, i.e. (9waxes, base oil, bitumen, etc).

STATEMENT OF HYPOTHESIS

In order to be able to achieve the objective of our research, the following hypothesis have been developed and presented for testing:

HO:That application of production skills in the management of industries and business organization has no significance impact profitability of an organization

H1: That application of production skills in the management of industries and business organization has a significance impact profitability of an organization

SIGNIFICANCE OF THE STUDY

The research project will be of immense benefit to all management staff and captains of industries on the important of skills. Production skills in organization and industries will help in achieving the desired objectives of providing good quality services profit making, alertness and discipline in every aspect.

The project will highlight the importance of skills in the management of industries/business organization and its importance cannot be over-emphasized, to also state that production skills in organization will contribute a lot to the survival of the organization/industry and it hedge out other competitors.

SCOPE OF THE STUDY

Due to the nature of the topic and the organization under this research, the research work shall be limited to pipe-line product Marketing Company Kaduna and in particular the production department of the organization. However, note could be made where necessary of other petrochemical industries or department within the sector to arrive a conclusion with regards to production skills.

LIMITATION OF THE STUDY

1. The fact that the researcher has to some extent enjoyed the cooperation of some interviewers, does not mean that I was not at least neglected and restricted in some departments
2. The major limitation of the study was the time constraint
3. In carrying out this study, the researcher traced some constraint such as non availability of adequate equipment and modern infrastructure in P.P.M.C
4. Other limitation was the penalty for employing untrained and unskillful personnel
   1. HISTORICAL BACKGROUND OF CASE STUDY

BRIEF HISTORICAL BACKGROUND OF THE COMPANY (PPMC)

The pipelines and products marketing company limited (PPMC) was incorporated in November 1988 as a subsidiary of the Nigeria National Petroleum Corporation (NNPC). The emergence of the company was by no means accidental, but as a result of a painstaking effort at revolutinalizing, mordernizing and commercializing the activities of NNPC and its integral parts. Its evolution commenced some twenty years ago as a result of the economic boom of the early 70s which led to the unprecedented and phenomenal rise in domestic petroleum consumption. The private sectors capacity and capability then proved rather inadequate to service effectively the demand growth. The ensuring production and distribution, constraints precipitated incessant supply demand crisis.

Long queues at the limited retail outlets (filling station) were a common sight. The government responded decisively by planning and executing the construction of two or more refineries one each at Warri and Kaduna respectively and also a country wide 3,000 kilometers petroleum products pipeline network linked to storage depots. By February 1979, following the completion of the Port-Harcourt –Aba-Enugu-Markurdi pipelines systems, the need to have an organization to operate and manage the system became necessary. A pipeline unit was consequently established. An American company, Williams International group Incorporated (WIGI) provided “ technical back up” to the unit. Department of the then commercial Division had for long been responsible for the distribution and marketing of petroleum products both departments to form the Pipeline and Products Marketing Division (PPMD), in 1982 was natural.

In 1985, NNPC was re-organized into sectors for the first time “well defined strategic business units with well defined corporate objectives emerged”. The pipeline and products marketing sector (PPMS) was formed through the merger of the pipelines operation (POD) and the products marketing and marine transportation division (PMMTD) PPMS) later metamorphosed into PPMC limited during the 1988-re-organisation. The business mission of PPMC is to ensure adequate and reliable supply of petroleum products to the domestic market, safely and at low operating cost; market petrochemical and special products competitively in the domestic and international markets provide excellent customer service by effectively and efficiently transporting crude oil to the refineries and moving petroleum products to the market.

The company has its head office located a long Kachia Road behind the Kaduna refinery and Petrochemicalcompany, with five depots and five pump stations namely; Kaduna depot, Kano depot, Jos depot, Gusau depot, Suleja depot and Minna depot. The pump stations include Sarkin Pawa pump station, Izom pump station, Zaria Pump station, Kaduna pump station and Abuja pump station.

DEFINITION OF TERMS

1. According to Rosser (1073) management is the utilization of physical and human resources, through co-operative efforts, resulting in the performance of functions of planning, organizing, staffing, directing and controlling.
2. This is the learned ability to bring about pre-determined results with maximum outlay of time or energy or both. Skills also can be defined as the capacity to bring about and end results with maximum certainty, minimum energy or minimum time.
3. collection of firms, producing similar product to produce a particular product as an end product.
4. This is the action of putting something necessary into operation
5. : The process of planning something or putting a plan, into operation in a skillful way. A plan that is intended to achieve a particular purpose.
6. : A thing that helps you to be better or more successful than other people. A quality of a product that makes it better or successful or to put somebody in a better position than others people or than they were in before.

Market force: A free system of trade in which prices & wages rise and fall, without being controlled by the government.

• : Using the latest technology, design, materials etc a way of behaving, thinking new ways of doing things
• : The relationship betweens production and trade and the supply of money in a particular region. The use of time, money, materials etc available in a way to avoid waste and cost being economical in using resources to produce wealth.
• : Is any thing tangible grown or produce that can satisfy the customers wants and need
• : An organized activity that involves several people doing different things.  A business or company involving many parts. The activity or work done in an area of business or industry.
• : All the people who live in a particular area, or country
• : Used to discuses situation in which people or organization compete against each other. Trying to be more successful or better than somebody else who is trying to do the same as you.
• : According to Oxford advanced learners dictionary New 7th edition; production is the process of growing or making food, gold or materials especially large quantity, the quantity of goods that is produced usually for sales
• : Orderly or controlled behaviour training or control producing this branch of learning train to be orderly.

Production line: production line means a line of workers and machines in a factory, along with a product passes, having parts made, put together or checked at each stage until the final product is finished.