Importance Of Effective Distribution In A Manufacturing Company
(A Case Study Of Nigeria Brewery Plc, Aba Plant)
Effective distribution plays a crucial role in the success and competitiveness of a manufacturing company. Distribution encompasses the intricate network of activities involved in getting products from the production line to the end consumer. It involves strategic planning, coordination, and optimization of various channels, such as wholesalers, retailers, and e-commerce platforms, to ensure that products reach the right market segments efficiently. A well-organized distribution system enhances customer satisfaction by minimizing delays and ensuring product availability where and when needed. Additionally, it contributes to cost-effectiveness by streamlining supply chain processes, reducing excess inventory, and optimizing transportation logistics. In the dynamic landscape of the manufacturing industry, an adept distribution strategy is imperative for adapting to market fluctuations and meeting evolving customer demands, thus fostering sustained growth and competitiveness for the company.
This project emphasize on the importance of effective distribution in a manufacturing company. A case study of Nigeria Brewery Plc, Aba plant.
The distribution of goods is very important for continuous survival of any company. Nevertheless only few firms attach considerable importance on how best their product should be made available to the market. This study examines the various ways distribution will make a company’s product to get to the final consumers.
Chapter one of this project reviewed the barground of the study, problems encountered by manufacturing company on distribution, objectives and scope of the study, research hypothesis, the significance and limitations of the study and definition of terms.
Chapter two contains the literature Review by defining distribution and its objectives, role of distribution, transportation, distribution channels and factors that effluences the choice of channels, the role of routing and scheduling in physical distribution, the importance of effective distribution, problems of distribution in Nigeria and ethical issues involving distribution.
The chapter three is all about the emphasis on research methods, research design, questionnaire design, sampling and selection of respondents. It also emphasized the method of data collection, source of data and method of analyzing these data for easy understanding.
Chapter four focus on the presentation of data collected and its analysis as well as the testing of the hypothesis and interpretation of the result.
Finally chapter five contains the summary of findings conclusion and recommendations.
Title page
Certification/ Approval page
Dedication
Acknowledgement
Abstract
Table of content
CHAPTER ONE
11 Background of the study
1.2 Statement of the problems
1.3 Objectives of the study
1.4 Scope of the study
1.5 Research question
1.6 Research hypothesis
1.7 Significance of the study
1.8 Limitation of the study
1.9 Definition of terms
CHAPTER TWO
Literature review
2.0 Introduction
2.1 Definition of distribution
2.2 Objectives of distribution
2.3 Role of distribution in marketing
2.4 Transportation
2.4.1 Choice of transportation mode in physical distribution
2.5 Definition and types of distribution channels
2.51 Factors that effluences the choice of channel
2.5.2 Functions of distribution channels
2.6 The role of routing and scheduling in physical distribution
2.7 Importance of effective distribution in a manufacturing company
2.8 Problems of distribution in Nigeria
CHAPTER THREE
Research methodology
3.0 Introduction
3.1 Research design
3.2 Questionnaire design
3.3 Sources of data
3.4 Population and sampling method
3.5 Sample size
3.6 Instruments for data collection
3.7 Method of data analysis
CHAPTER FOUR
Presentation and analysis of data
4.0 Introduction
4.1 Data analysis
4.2 Discussion of major findings
4.3 Test of hypothesis
4.4 Decision rule
CHAPTER FIVE
5.0 Summary, conclusion and recommendation
5.1 Summary
5.2 Conclusion
5.3 Recommendation
Questionnaire
References
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
This project tends to explore the importance of effective distribution in manufacturing company with reference to Nigeria Brewery Plc Aba.
The distribution system of any company is made up of department executing one of the main marketing functions. The performance of this function creates satisfactions in goods by making them available to the customers. This has to do with the process of warehousing, transportation, storage depots and other organization such as wholesalers and other retailers.
Distribution in its broader interpretation means the transfer of goods from the producer to the consumers. It is the process of satisfying customers and at the same time generating profitable system that allows the products to flow through distribution channel as quick as possible.
Historically speaking, distribution system has been the foundation in which the economic growth of the company depends. The channels of distribution is also selected base on the type of its consumers. This ultimately affects all other aspects of the company’s activities. The right distribution system takes proper planning to build since it involves constant changes.
This project provides a detailed insight into the planning and operation of effective distribution in a manufacturing company activities centre of Nigeria Brewery Plc. It concentrates more on the movement, storage, handling of raw materials and finish products. It examined how distribution functions can be integrated and how they can be optimized to minimize cost and how the corporation actually organized them in practice.
1.2 STATEMENT OF PROBLEMS
The issue of effective distribution of company’s products to ensure that the products get to the final consumers has been a problem. These problems includes the followings:
(1) POOR MANAGEMENT OF DISTRIBUTION SYSTEM: Most times a company’s products do not get to the final consumers, it stops half way as a result of poor management of distribution system. It is either that distribution department is not using the right channel for distributing their products or that the number and type of outlets through which the products are sold to the consumers are not adequate.
(2) OPERATING COST OF TRANSPORT VEHICLES: Which ever method that is employed by any company to distribute goods to their customers there will be a cost changing the number of warehouse and locations in a company causes change in the transportation cost and as price of energy continues to increase, then the cost of transport will also increase accordingly thereby limiting effective distribution.
(3) CUSTOMER SERVICE COST: This involves stock out, excess delivery time or excess variability of delivery time, all results in lost sales. Any change in the distribution system will influence these elements of customer service and therefore must either gain or loss sales for the company.
(4) COST OF DAMAGES IN TRANSPORTATION: A lot of materials are damaged in transit. In some cases this can be a major cost especially if the goods are fragile perishable and of high value.
(5) BAD ROAD: The road are not adequately constructed and as such access roads to remote location such as industrial producing areas are typically bush path thereby restricting effective and efficient distribution of goods.
1.3 OBJECTIVES OF THE STUDY
The research work is to consider the requirement for effective distribution of product recommending alternative channels of distribution and also resolving the common conflicts that are common in the distribution section of any company. The following objectives will be achieved. For this study.
(1) The present distribution channel will be examined in details and its effectiveness assessed
(2) Emphasize the importance of distribution
(3) Suggesting alternative channels for effective distribution
(4) Studying other channels for effective distribution
1.4 SCOPE OF THE STUDY
This study was executed in Nigeria brewery Plc. Aba plant. Data and information were obtained from the supervisors and workers.
The company Nigeria brewery Plc has five (5) plants nationwide with its headquarters at Lagos. We will however focus only on one plant located in Aba, which also serves their customers within the region.
In this study we will concentrate on the effectiveness of distribution in Nigeria brewery Plc identifying alternative channels of distribution and emphasizing its importance in a manufacturing company and finding the location that will generate higher profits.
1.5 RESEARCH QUESTIONS
(1) To what extent will efficient management of
distribution system lead to effective and profitable result?
(2) Will setting up of a separate section for distribution activities lead to more efficient management of the distribution system?
(3) What will be the effect alternative channels of distribution on the profit of Nigeria Brewery Plc?
(4) Will the use of alternative channels of distribution improve services to customers?
(5) What is the likely cost that will be incurred as a result of running a separate department for distribution?
1.6 RESEARCH HYPOTHESIS
The hypothesis is tested so as to enable the formation of adequate opinion and also to draw conclusion whether the data is accepted or rejected.
HYPOTHESIS I
Ho:- Effective management of the distribution system will
not lead to more effective and profitable result
Hi:- Effective management of the distribution system will lead to more effective and profitable results.
HYPOTHESIS II
Ho:- Setting up a separate section or department for
distribution system will not lead to more efficient management of the distribution system
Hi:- Setting up a separate section or department for
distribution system will lead to more efficient management of the distribution system.
HPOTHESIS II
Ho:- Provision of basic infrastructure like good road network by the government will not affect the efficiency and effectiveness of distribution system
Hi:- Provision of basic infrastructure like good road network
by the government will affect the efficiency and effectiveness of distribution system
1.7 SIGNIFICANCE OF THE STUDY
The findings of this research work on the importance of effective distribution in a manufacturing company is principally structured to encourage proper distribution of company’s product. The findings also provides the ways by which problems of distribution encountered in our companies are wisely treated.
The study will help Nigeria Brewery Plc and other stakeholders in identifying problem areas mitigating the realization of finish goods and will guide them in assessing her operation especially in the area of product distribution.
Another area of significance of the study is that the work attempts to identify and project what could be obtainable in the nearest future. Hence it is of vital need to understand the trade- offs that would be achieved through integrated planning of distribution activity centre. For this reason it is necessary for physical distribution department of an organization like Nigeria brewery Plc to offer dedicated distribution services and equate enough for her customer satisfaction.
Moreover, this project work will be beneficial to the researcher because it will fulfill in the part necessary conditions for obtaining the award of higher national diploma.
The consumers having known the importance of effective distribution in a manufacturing company from this research work can advice or make necessary suggestions to the company of effective distribution means or strategy to adopt towards satisfying them so as to obtain their (customers) good will and at the same time enhance growth in distribution system.
It is believed that this study will equally be of greater benefit to other companies to aid them to effectively distribute their product and to also provide other researchers with ready made information for more research.
1.8 LIMITATIONS OF THE STUDY
The foremost limitation that was encountered in the course of the study was the difficulty of meeting the managers, supervisors and work force because of their tight schedules and method of operation. Even when audience was granted. Information was not released easily by the managers for fear of information getting to their competitors and the workforce also had the fear of loosing their job or be penalized for realizing information.
Another limiting factor is “TIME” Although a reasonable amount of time was permitted for this work our programmed activities made it difficult to complete specific arrangements meant for a good research.
Finally, as a result of increased financial responsibility resulting from frequent travel in compliance with the requirement necessary for the research work is the problem encountered in the research work.
1.9 DEFINITION OF TERMS
Some of the major terms used in the write- up include the following:
(1) Physical distribution:- The managerial function
which involves the efficiency movement of raw materials in process inventory and finished products from source to the point of end use.
(2) Pallets: Wooden or steel platform designed for staking unitized loads for easy material handing and movement of the had by forklift truck.
(3) Outlets:- These are shops that sell the company
products. They are mostly registered and given supply card (Route card) for recording and monitoring the customers performances or purchase.
(4) Plants:- This is the actual place of production. It is
from this point that the products are been shifted to the warehouse or depot
(5) Consumers:- The people in which the products are meant for ie the people, that actually consume that company’s products.
(6) Product:- Anything that can be offered to the market for attention, acquisition or use which might satisfy a need
(7) Depot:- A place where products are kept for further distribution
(8) Routes:- Designated or area of coverage by specified salesmen
(9) Distribution cycle:- The time it takes the products to reach to the final consumers
(10) Territories:- Defined the area of coverage assigned to distributors or salesmen for easy monitoring and follow- up
Importance Of Effective Distribution In A Manufacturing Company:
Effective distribution is crucial for the success of a manufacturing company for several reasons:
Customer Satisfaction: Timely and accurate distribution ensures that customers receive their orders when and where they expect them. This leads to higher customer satisfaction and loyalty, which can result in repeat business and positive word-of-mouth referrals.
Cost Efficiency: Efficient distribution helps in minimizing transportation, storage, and handling costs. By optimizing routes and delivery schedules, a manufacturing company can reduce fuel consumption, labor costs, and other operational expenses.
Competitive Advantage: Companies that can deliver products faster and more reliably than their competitors gain a significant competitive advantage. In some industries, rapid delivery can even become a unique selling proposition.
Inventory Management: Effective distribution allows for better control of inventory levels. This prevents overstocking or understocking issues, reducing carrying costs and the risk of product obsolescence.
Market Expansion: A well-planned distribution strategy can help a manufacturing company expand into new markets or reach underserved areas. This can lead to increased sales and revenue.
Supply Chain Integration: Distribution is a key component of the broader supply chain. Effective distribution facilitates better coordination between suppliers, manufacturers, and distributors, leading to smoother operations and reduced lead times.
Risk Management: Diversifying distribution channels and locations can help mitigate risks associated with disruptions in the supply chain. If one distribution channel is affected by a disaster or other unforeseen event, alternative channels can still serve customers.
Data and Analytics: Modern distribution systems generate a wealth of data that can be analyzed to gain insights into customer behavior, demand patterns, and operational efficiencies. This data-driven approach can inform better decision-making and strategic planning.
Regulatory Compliance: Different regions and countries may have specific regulations and requirements related to the distribution of goods. An effective distribution system ensures that these regulations are met, reducing the risk of legal issues and penalties.
Environmental Impact: Efficient distribution can contribute to sustainability efforts by reducing carbon emissions through optimized routing and transportation methods. This can enhance a company’s reputation and appeal to environmentally conscious customers.
Customer Communication: Distribution channels provide opportunities for direct customer communication, allowing companies to gather feedback, address concerns, and build stronger relationships.
Brand Image: Reliable and efficient distribution contributes to a positive brand image. Customers are more likely to trust and recommend companies that consistently deliver their products on time and in good condition.
In summary, effective distribution is a critical component of a manufacturing company’s overall success. It impacts customer satisfaction, cost management, competitiveness, and strategic growth. Companies that invest in optimizing their distribution processes are better positioned to thrive in the global marketplace.