The Effect of Production Planning and Control on Organisational Performance in the Nigerian Cement Manufacturing Industry
Keywords:
Industry,, Organisation, Performance, Production planning, Production Control
Abstract
The study examined the effect of production planning and control on organisational performance in the Nigerian cement manufacturing industry. Production planning and control were proxied by material requirement planning, quality control, just-in-time production, and inventory management; while organisational performance was measured by productivity, quality delivery, profitability, and cost minimisation. The study’s population includes 768 employees in the production, quality, procurement, and sales/marketing departments of Dangote Cement Plc and Lafarge Cement Nigeria Plc, in which two hundred and sixty-three (263) employees were selected as sample using judgmental sampling technique. A structured questionnaire was administered on the respondents. A pool confirmatory factor analysis was employed to assess the validity and reliability of the research instrument. The study employed descriptive (mean, frequency distribution, and percentage) and inferential statistical techniques to analyse and test the data collected. On the other hand, structural equation modeling technique was used to test the hypotheses formulated for the study. The outcome of the path analysis revealed a positive coefficient value of the causal effect of production planning and control constructs (material requirement planning, quality control, just-in-time production, and inventory management) on organisational performance. The study recommends that manufacturing firms should embrace effective material requirement planning to ensure manufacturing effectiveness in their operations.
References
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Cardoso, O. O. (2021). The effect of production planning and control on organisational performance in the Nigerian cement
manufacturing industry. M.Sc Thesis, Department of Business Administration, University of Lagos, Akoka-Yaba, Nigeria.
Dahmash, F. N. (2015). Size effect of company profitability: International Journal of business management, 10(2)58-72.
Ekpudu, J. E. (2016). Quality Management Practices and Performance of Selected Firms in the Nigerian Downstream Oil Sector. Ph.D. Thesis, Department of Management and Accounting, Obafemi Awolowo University, Ile-Ife, Nigeria.
Etale, L. M., and Bingilar, P. F. (2016). The effect of inventory cost management on profitability: a study of listed Brewery companies in Nigeria. International Journal of Economics, Commerce and Management, 4(6) 446-455.
Faraz, K., and Danish, A. S. (2019). Impact of inventory management on firm’s efficiency – a quantitative research study on departmental stores operating in Karachi. Social Science and Humanities Journal, 964-980.
Folinas, D. K., Fotiadis, T. A., and Coudounaris, D. N. (2017). Just-in-time theory: the panacea to business success? International Journal of Value Chain Management, 8(2), 171-190.
Ghasemi, E., Lehoux, N. and Ronnqvist, M. (2022). Coordination, cooperation and collaboration in the production-inventory systems: a systematic literature review.
https//doi.org/10.1080/00207543.2022.2093681
Guo, H., Zhang, R., and Chen, X. (2019). Quality control in the production process of the product-service system: A method based on turtle diagram and evaluation model. 11th CIRP Conference on Industrial Product-Service Systems. doi: 10.1016/j.procir.2019.04.090.
Habib, E. E. (2016). MRP Framework to increase production operations performance. an applied study on the Egyptian manufacturing pharmaceutical companies. Journal of Commerce and Environmental Studies, 7(2), 632-678.
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Heizer, J., and Render, B. (2011). Principles of Operations Management. 8th Edition, Prentice Hall, Upper Saddle River.
Ikon, M. A., and Nwankwo, C. N. (2016). Production planning and profitability of selected manufacturing firms in Nigeria. International Journal of Business and Management Review, 4(1), 11-32.
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Lee, E, Whitehead, A. L, Jacques, R. M., and Jolious, S. A. (2014). The statistical interpretation of pilot trials: Should significance thresholds be reconsidered? BMC Medical Research Methodology 2014; 14: 41–41.
Lin, M. J. J., and Chen, C. J. (2008). Integration and knowledge sharing: transforming to long-term competitive advantage. International Journal of Organisational Analysis, 16(1/2), 83-108.
Mazanai M (2012). Impact of just-in-time (JIT) inventory system on efficiency, quality and flexibility among manufacturing sector, small and medium enterprise (SMEs) in South Africa. African Journal of Business Management, 6(17), 5786-5791.
Millicent, I. A. D. (2017). Impact of manufacturing planning and control on operational performance of pharmaceutical firms in Nairobi. A Research Master Project Submitted to the School of Business, University of Nairobi
Monday, J. U., Olusegun, T. L., and Bajomo, O. R. (2015). Are TQM principles supporting organisational performance in Nigeria? Evidence from Nigerian banking industry. Paper Presented at the 2nd International Conference on “Issues and Challenges in Africa’s Quest for Development”. O.A.U., Ile-Ife.
Mulandi, C. M., and Ismail, N. (2019). Effect of inventory management practices on performance of commercial state corporations in Kenya. International Academic Journal of Procurement and Supply Chain Management, 3(1), 180-197.
Nunnally, J. C., and Bernstein, I. H. (1994). Psychometric theory (3rd ed.). New York: McGraw-Hill.
Ngugi, E. N., Kimutai, G., and Kibet, Y. (2019). Effects of inventory management systems on performance of manufacturing companies in Eldoret Town, Kenya. The Strategic Journal of Business & Change Management, 6 (2), 1431 –1345.
Nyori, G. M., & Ogola, J. M. (2015). Advanced manufacturing technology adoption in manufacturing companies in Kenya. International Journal of Research in Engineering and Technology, 4(10).
Ofila, I., & Rahmat, N. (2018). Quality control circle and performance on construction industry. Industrial Engineering and Operations Management (IEOM, 2487-2496
Ogbo, A. I Onekanma, I. V. and Wilfred, I.U. (2014). The impact of effective inventory control management on organisational performance. Mediterranean Journal of social science, 5(10), 109.
Okah, V., Nduka, O. I., and Ugwuegbu, C. O. (2018). Production planning and organisational effectiveness. Strategic Journal of Business and Social Science (SJBSS), 1, 1-28
Oladokun, V. O., and Olaitan, O.A. (2012). Development of materials requirements planning (MRP) software. The Pacific Journal of Science and Technology, 13, 351-357.
Oleghe, O., & Salonitis, K. (2014). Schedule performance measurement based on statistical process control charts, International Journal of Engineering Management and Economics, 4(3/4), 194-212.
Opoku, R. K., Fiati, H. M., Kaku, G., Ankomah, J., and Agyemang, F. O.-. (2020). Inventory management practices and operational performance of manufacturing firms in Ghana. Advances in Research, 21(10), 1-18. https://doi.org/10.9734/air/2020/v21i1030246
Ovunda, M. N., Isaac, O. E., and Ndor, M. V. (2019). Assessment of the impact of production planning and operational cost control in the beverage industries. American Journal of Engineering Research (AJER), 8(1), 63-81
Osuolale O. M., Tijani; S. A., and Bakare, L. A. (2018). Quality control and the performance of small and medium scale enterprises in southwestern Nigeria. Continental Journal of Sustainable Development, 9 (2), 16-34.
Prempeh, K. B. (2016). The impact of efficient inventory management on profitability: evidence from selected manufacturing firms in Ghana. International Journal of Finance and Accounting. 5 (1), 22-26.
Ringen, G., Aschehoug, S., Holtskog, H., and Ingvaldsen, J. (2014). Integrating quality and lean into a holistic production system. Procedia CIRP, 17, 242-247.
Roumiantsev, T. and Netessine, Y. (2017). Relationship between inventory management systems and the financial performance of textile companies in Germany. International Journal of Finance and Accounting, 7(4), 126321.
Sambil, C. M., Matimba, D. M., Sihle, M., Xolani, M., and Sine, A. B. (2019). The Impact of Just-in-Time (JIT) in Inventory Management –Perspectives from Two Case Studies in a South African Environment. Proceedings of the International Conference on Industrial Engineering and Operations Management, 1271-1278.
Sangwan, K. S., Bhamu, J., and Mehta, D. (2014). Development of lean manufacturing implementation drivers for the Indian ceramic industry. International Journal of Productivity and Performance Management, 63(5), 569-587.
Silver, E. A., Pyke, D. F., and Peterson, R. (2008). Inventory management and production planning and scheduling. Managerial and Decision Economics, 11.
Stevenson, W. (2007). Operations Management. Theory and Practice. Mac Graw –hill companies. United States of America.
Taro, Y. (1967). Statistics: An Introductory Analysis, New York: Hamper.
Tekalign, N. (2020). Assessing the Inventory Management Practices, A Case of Manufacturing Firms in Hawassa City, Ethiopia. International Journal of Current Research 12(2):10388-10395DOI: 10.24941/ijcr.38085.02.2020
Tewari, D., Singh, A., and Tewari, P. C. (2016). Ranking of performance indicators in JIT-based production system for manufacturing industries. IUP Journal of Operations Management, 15(1), 25.
Torky, A. (2020). Effect of inventory management on financial performance: evidence from the Saudi manufacturing company. European Journal of Accounting, Auditing and Finance Research, 8(10), 13-26.
Wen-Hsien, T., and Yin-Hwa, L. (2018). A Framework of Production Planning and Control with Carbon Tax under Industry 4.0. Department of Business Administration, National Central University, Taiwan.
Wickramasinghe, V. (2016). Performance Management in Medium-Sized Enterprises, Perform. Improv. Q., DOI: 10.1002/pi.21227
Xian, W., Mengwei, Z., Lu, S., and Ziyang, L. (2020). JIT adoption and corporate innovation. International Conference on Management of e-Commerce and e-Government, 20–25 https://doi.org/10.1145/3409891.3409900
Yazan, E. A. (2017). Just-in-time system and its impact on operational excellence: an empirical study on Jordanian industrial companies. International Journal of Business and Management, 12(12), 158.
Adeniran B. G., Agbaje, W. H., and Adeosun, M. A. (2019). An assessment of just in time system on the financial performance of manufacturing firms in Nigeria. Journal of Accounting and Taxation, 11(7), 111-119.
Adoke, R. H. and Abdulaziz, M. A. (2021). An empirical investigation of decisions and financial performance: A study of consumer goods listed in Nigeria stock exchange. UNILAG Journal of Business, 7(2), 29-42. Published by Department of Business Administration, Faculty of Management Sciences, University of Lagos, Nigeria.
Agorzie, C. J., Ekpudu, J. E., and Adewumi, T. O. (2020). Materials management practices and operational performance of selected quoted food, beverages and breweries firms in South Western Nigeria. UNILAG Journal of Business, 6(2), 159-174. Published by Department of Business Administration, Faculty of Management Sciences, University of Lagos, Nigeria.
Alfred, M. K., Reuben, N., and James K. (2018). Total quality management practices and operational performance of Kenya revenue authority. International Journal of Contemporary Aspects in Strategic Management (IJCASM), 2, 91-105.
Al-Mubarak, M. M. (2016). Challenges of going global for SMES. International Journal of Innovation and Knowledge Management in the Middle East and North Africa, 5(1), 213232
Bashir, M. I. (2020). Control of Management in an Organisation. Palarch’S J. Archaeol. EGYPT/EGYPTOLOGY, [Online]. Available: https://archives.palarch.nl/index.php/jae/article/view /3133.
Cardoso, O. O. (2021). The effect of production planning and control on organisational performance in the Nigerian cement
manufacturing industry. M.Sc Thesis, Department of Business Administration, University of Lagos, Akoka-Yaba, Nigeria.
Dahmash, F. N. (2015). Size effect of company profitability: International Journal of business management, 10(2)58-72.
Ekpudu, J. E. (2016). Quality Management Practices and Performance of Selected Firms in the Nigerian Downstream Oil Sector. Ph.D. Thesis, Department of Management and Accounting, Obafemi Awolowo University, Ile-Ife, Nigeria.
Etale, L. M., and Bingilar, P. F. (2016). The effect of inventory cost management on profitability: a study of listed Brewery companies in Nigeria. International Journal of Economics, Commerce and Management, 4(6) 446-455.
Faraz, K., and Danish, A. S. (2019). Impact of inventory management on firm’s efficiency – a quantitative research study on departmental stores operating in Karachi. Social Science and Humanities Journal, 964-980.
Folinas, D. K., Fotiadis, T. A., and Coudounaris, D. N. (2017). Just-in-time theory: the panacea to business success? International Journal of Value Chain Management, 8(2), 171-190.
Ghasemi, E., Lehoux, N. and Ronnqvist, M. (2022). Coordination, cooperation and collaboration in the production-inventory systems: a systematic literature review.
https//doi.org/10.1080/00207543.2022.2093681
Guo, H., Zhang, R., and Chen, X. (2019). Quality control in the production process of the product-service system: A method based on turtle diagram and evaluation model. 11th CIRP Conference on Industrial Product-Service Systems. doi: 10.1016/j.procir.2019.04.090.
Habib, E. E. (2016). MRP Framework to increase production operations performance. an applied study on the Egyptian manufacturing pharmaceutical companies. Journal of Commerce and Environmental Studies, 7(2), 632-678.
Hair, J. F, Tatham, R. L., Anderson, R. E., and Black, W. (1998). Multivariate data analysis. (Fifth Ed.) Prentice-Hall: London
Heizer, J., and Render, B. (2011). Principles of Operations Management. 8th Edition, Prentice Hall, Upper Saddle River.
Ikon, M. A., and Nwankwo, C. N. (2016). Production planning and profitability of selected manufacturing firms in Nigeria. International Journal of Business and Management Review, 4(1), 11-32.
Jacob, F. R., Berry, W. L., Whybark, D. C. and Vollmann, T. E. (2011). Manufacturing Planning and control for supply chain management (6thEd) McGraw-Hill/Irwin Series Operations and Decision Sciences. NY
Jain K. C., and L, N. Aggarwal (2008). Production Planning, Control and Industrial Management, Delhi, Nai-Sarak: Khalma Publishers.
John, N. E., Etim, J. J., and Ime, T. U. (2015). Inventory management practices and operational performance of flour milling firms in Lagos, Nigeria. International Journal of Supply and Operations Management, 1(4), 392.
Lee, E, Whitehead, A. L, Jacques, R. M., and Jolious, S. A. (2014). The statistical interpretation of pilot trials: Should significance thresholds be reconsidered? BMC Medical Research Methodology 2014; 14: 41–41.
Lin, M. J. J., and Chen, C. J. (2008). Integration and knowledge sharing: transforming to long-term competitive advantage. International Journal of Organisational Analysis, 16(1/2), 83-108.
Mazanai M (2012). Impact of just-in-time (JIT) inventory system on efficiency, quality and flexibility among manufacturing sector, small and medium enterprise (SMEs) in South Africa. African Journal of Business Management, 6(17), 5786-5791.
Millicent, I. A. D. (2017). Impact of manufacturing planning and control on operational performance of pharmaceutical firms in Nairobi. A Research Master Project Submitted to the School of Business, University of Nairobi
Monday, J. U., Olusegun, T. L., and Bajomo, O. R. (2015). Are TQM principles supporting organisational performance in Nigeria? Evidence from Nigerian banking industry. Paper Presented at the 2nd International Conference on “Issues and Challenges in Africa’s Quest for Development”. O.A.U., Ile-Ife.
Mulandi, C. M., and Ismail, N. (2019). Effect of inventory management practices on performance of commercial state corporations in Kenya. International Academic Journal of Procurement and Supply Chain Management, 3(1), 180-197.
Nunnally, J. C., and Bernstein, I. H. (1994). Psychometric theory (3rd ed.). New York: McGraw-Hill.
Ngugi, E. N., Kimutai, G., and Kibet, Y. (2019). Effects of inventory management systems on performance of manufacturing companies in Eldoret Town, Kenya. The Strategic Journal of Business & Change Management, 6 (2), 1431 –1345.
Nyori, G. M., & Ogola, J. M. (2015). Advanced manufacturing technology adoption in manufacturing companies in Kenya. International Journal of Research in Engineering and Technology, 4(10).
Ofila, I., & Rahmat, N. (2018). Quality control circle and performance on construction industry. Industrial Engineering and Operations Management (IEOM, 2487-2496
Ogbo, A. I Onekanma, I. V. and Wilfred, I.U. (2014). The impact of effective inventory control management on organisational performance. Mediterranean Journal of social science, 5(10), 109.
Okah, V., Nduka, O. I., and Ugwuegbu, C. O. (2018). Production planning and organisational effectiveness. Strategic Journal of Business and Social Science (SJBSS), 1, 1-28
Oladokun, V. O., and Olaitan, O.A. (2012). Development of materials requirements planning (MRP) software. The Pacific Journal of Science and Technology, 13, 351-357.
Oleghe, O., & Salonitis, K. (2014). Schedule performance measurement based on statistical process control charts, International Journal of Engineering Management and Economics, 4(3/4), 194-212.
Opoku, R. K., Fiati, H. M., Kaku, G., Ankomah, J., and Agyemang, F. O.-. (2020). Inventory management practices and operational performance of manufacturing firms in Ghana. Advances in Research, 21(10), 1-18. https://doi.org/10.9734/air/2020/v21i1030246
Ovunda, M. N., Isaac, O. E., and Ndor, M. V. (2019). Assessment of the impact of production planning and operational cost control in the beverage industries. American Journal of Engineering Research (AJER), 8(1), 63-81
Osuolale O. M., Tijani; S. A., and Bakare, L. A. (2018). Quality control and the performance of small and medium scale enterprises in southwestern Nigeria. Continental Journal of Sustainable Development, 9 (2), 16-34.
Prempeh, K. B. (2016). The impact of efficient inventory management on profitability: evidence from selected manufacturing firms in Ghana. International Journal of Finance and Accounting. 5 (1), 22-26.
Ringen, G., Aschehoug, S., Holtskog, H., and Ingvaldsen, J. (2014). Integrating quality and lean into a holistic production system. Procedia CIRP, 17, 242-247.
Roumiantsev, T. and Netessine, Y. (2017). Relationship between inventory management systems and the financial performance of textile companies in Germany. International Journal of Finance and Accounting, 7(4), 126321.
Sambil, C. M., Matimba, D. M., Sihle, M., Xolani, M., and Sine, A. B. (2019). The Impact of Just-in-Time (JIT) in Inventory Management –Perspectives from Two Case Studies in a South African Environment. Proceedings of the International Conference on Industrial Engineering and Operations Management, 1271-1278.
Sangwan, K. S., Bhamu, J., and Mehta, D. (2014). Development of lean manufacturing implementation drivers for the Indian ceramic industry. International Journal of Productivity and Performance Management, 63(5), 569-587.
Silver, E. A., Pyke, D. F., and Peterson, R. (2008). Inventory management and production planning and scheduling. Managerial and Decision Economics, 11.
Stevenson, W. (2007). Operations Management. Theory and Practice. Mac Graw –hill companies. United States of America.
Taro, Y. (1967). Statistics: An Introductory Analysis, New York: Hamper.
Tekalign, N. (2020). Assessing the Inventory Management Practices, A Case of Manufacturing Firms in Hawassa City, Ethiopia. International Journal of Current Research 12(2):10388-10395DOI: 10.24941/ijcr.38085.02.2020
Tewari, D., Singh, A., and Tewari, P. C. (2016). Ranking of performance indicators in JIT-based production system for manufacturing industries. IUP Journal of Operations Management, 15(1), 25.
Torky, A. (2020). Effect of inventory management on financial performance: evidence from the Saudi manufacturing company. European Journal of Accounting, Auditing and Finance Research, 8(10), 13-26.
Wen-Hsien, T., and Yin-Hwa, L. (2018). A Framework of Production Planning and Control with Carbon Tax under Industry 4.0. Department of Business Administration, National Central University, Taiwan.
Wickramasinghe, V. (2016). Performance Management in Medium-Sized Enterprises, Perform. Improv. Q., DOI: 10.1002/pi.21227
Xian, W., Mengwei, Z., Lu, S., and Ziyang, L. (2020). JIT adoption and corporate innovation. International Conference on Management of e-Commerce and e-Government, 20–25 https://doi.org/10.1145/3409891.3409900
Yazan, E. A. (2017). Just-in-time system and its impact on operational excellence: an empirical study on Jordanian industrial companies. International Journal of Business and Management, 12(12), 158.
Published
2022-08-03
How to Cite
Ekpudu, J. E., Izediuno, O. L., Cardoso, O. O., & Odigie, M. E. (2022). The Effect of Production Planning and Control on Organisational Performance in the Nigerian Cement Manufacturing Industry. Global Journal of Accounting, 8(1), 31-45. Retrieved from http://gja.unilag.edu.ng/article/view/1556
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Articles
