Measurement of Labour Efficiency for Maximizing Profitability of Manufacturing Firms (a Study of Saclux Paint Nig. Ltd. Umuahia, Abia State)
The objective of the study were to ascertain the measurement of labour efficiency for maximizing profitability of manufacturing firms. Since the primary aim of every business is to make maximum profits. In order to achieve the basic objectives, most especially those that engage in manufacturing activities struggle hard to carryout smooth and successful production and sales operations. The numerous factors that hinder firms form large rate of inflation, depreciating value of Naira, law capacity utilization and intense competition, using Saclux Paints Nig. Ltd as the case study, to end this, the researcher proceeded to data collection through questionnaires after reviewing the related literature, and respectively analysed the sought data using percentages. The researcher used Yaro Yameni formular to determine the sample size. Subsequently, the result revealed that efficient labour actually increase the profitability of manufacturing firms.
1.01 GENERAL DESCRIPTION OF THE AREA OF STUDY
The primary aim of every business is to make maximum profit and minimize labour. In order to achieve the basic objective, most firms especially those that engage in manufacturing activities struggle hard to carryout smooth and successful production and sales operations.
There are numerous factors that hinder motives. Such hindrances include; the enormously large rate of inflation, depreciating value of naira, low capacity utilization and intense competition. As a result of the Afore-mentioned, many firms struggle to maintain satisfactory earnings in a situation where costs are rising but price increase are becoming more and more difficult to achieve.
As a way of stemming the rate of economic activity and in order to maintain improved profitability and remain afloat in business, many manufacturing firms in Nigeria now adopt one measure as the other aimed at controlling their cost or better still reducing such costs as a result of efficiency of operations reading to enhanced profitability which will in turn help to maximize the wealth of shareholders. These measures includes: sourcing and developing raw materials locally instead of importing them, obtaining quality discount through bulk purchase and using cost minimization strategies such as work-study to improve labour efficiency, just-in-time (JIT) to eliminate waste and advanced manufacturing technology (AMT) which uses the best technology to achieve high quality standard.
The study will examine the measurement of labour efficiency for maximizing profitability in manufacturing firms in Nigeria, using Saclux paints Nigeria Ltd as a case study (15 projects. com).
1.02 HISTORY OF CASE STUDY
Saclux paints Plc is a manufacturing company 23rd May, 1983. they have their have their head office situated at 108, Aba Road, Ohokobe Afara, Umuahia North, Abia State, Nigeria. It also have branches at Shop B4 – 70, Abuja International building Market, Dei Dei, Abuja and also a branch in Kano state respectively.
The company has been in existence for over (32) thirty two years and today employs well over 350 staff working across their extensive network. Among its competitors, Saclux paints is said to be the best and also a home of quality paint. It offers Emulsion paints, gloss paints. The company manufactures quality paints, the company diversified its products based and introduces high class liquid paints texcote, emulsion and gloss, a quality oriented company working to add value, comfort and beautification of the environment. Their emulsion and texture fine costs are especially formula
1.03 STATEMENT OF THE PROBLEMS
Manufacturing firms in Nigeria now operate within a turbulent business environment which has been characterized by high rate of inflation, intense competition by capacity utilization, depreciation and depreciation value of Naira, etc. as a result of the afore mentioned, many firms struggle to maintain satisfactory earnings in a situation where costs are rising but price increases are becoming more and more difficult to achieve.
The economic woes have so much negative impact on the operations of these firms that many of them are now engulfed in the ugly trap of profit squeeze with some of them on path of demise.
1.04 PURPOSE OF THE STUDY
The general objectives or purpose of the study is to appraise the impact of measurement of labour efficiency for maximizing profitability in manufacturing firms of Nigeria.
The specific objectives are as follows:
- To establish if these is a significant difference between materials, labour and overhead costs of manufacturing firms in Nigeria.
- To determine the relationship between labour efficiency and profit maximization of Nigerian manufacturing firms.
- To ascertain the accounting systems which are designed to control labour.
- To ascertain the areas where labour may be reduced.
1.05 RELEVANT RESEARCH QUESTIONS
- What are the significant differences between materials, labour and overhead costs of manufacturing firms?
- In what areas can labour be reduced?
- Which accounting systems can be used to control labour?
- What is the relationship between profit maximization and labour efficiency?
- What accounting strategies can be used to determine the difference between labour, materials and profit maximization.
1.06 DELIMITATIONS (SCOPE OF THE STUDY)
This research work converse a great deal of the topic. It helps to know how labour efficiency measures profit maximization in manufacturing firms. Saclux paints Nig. Plc.
The researcher assumed that the following would be accomplished during the period of this work.
It is assumed that the supervisor would give the researcher adequate guidance during the period of this research work.
It was assumed that the student would take all the necessary corrections from the supervisor.
It was assumed also that the respondent would assist the student by giving the researcher all the relevant information needed about the study.
It was equally assumed that the accountants in the manufacturing firms would apply adequate labour for a better profit maximizations.
1.08 SIGNIFICANCE OF THE STUDY
Against the backdrop of high rate of inflation. Depreciating and deplation value of the naira and turbulent business climate, many manufacturing firms now adopt strong measures which are society and developing raw-materials locally instead of importing them obtaining quantity discount through bulk purchase, etc. so as to reduce cost and maximize profits, climate waste and inefficient cy in order to increase productivity and maintain satisfactory earnings to help them remain afloat in business. In this regards, the results of the research study will no doubt help the entire society to purchase any products as a result of increase in productivity made by manufacturing firms and also help institutions through the lecturers to the students to impact knowledge on how to obtain quantity discount through bulk purchase and also tell the students to sources raw-materials locally instead of importing them.
- DEFINITION OF UNFAMILIAR TERMS
ADVANCED MANUFACTURING TECHNOLOGY:
This helps the organisation to be innovative and flexible and able to deal with short product lift cycles. It is therefore a new approach designed to offer greater product variety whilst maintaining/reducing labour.
LABOUR CONTROL: These means keeping labour within presented limits.
LABOUR REDUCTION: An attempt to bring labour down from a previously accepted level.
INVESTMENT CENTRE: A centre where mangers are not only accountable for sales revenue and expenses but also responsible for capital investment decisions.
JUST – IN – TIME (J.I.T): A manufacturing system that reduces the time that products spend in the production process by eliminating waste.
VALUE ANALYSIS: A cost reduction technique which attempts to reduce the manufacturing cost of a product with reducing its quality performance or value to the customer.
WORK STUDY: A scientific technique or method of determining the most efficient method of using labour, material and machinery.