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PHYSICAL DISTRIBUTION MANAGEMENT IN INNOSON COMPANY LIMITED IN ENUGU METROPOLIS

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

In any given company particularly manufacturing, three Primary functions are observed and they include primary function of finance, production and marketing otherwise known by many as distribution, these three primary functions are interdependent and complementary. Having the  financial resources and the ability to produce a product are of little value if the product can not be exchange for money. Equally having the finance and the market are of little value if one cannot provide the product. The ability to produce and exchange are not sufficient if one does not have the necessary capital to employ personnel and obtain other facilities and suppliers. Plans and action of these three

Primary function and other support must work in concert if the organization is to achieve it, full potential. In other words, it must develop demand for its goods and services at a profit if it must remain in business, from the foregoing, it is clear that physical distribution whether accepted or not had remained integral part of every day business especially in a manufacturing outfit, and by extension any economy, infact it plays pivotal and by dynamic role in the entire network of our national economic life. Economists have frequently differentiate between production and distribution. Production in economic sense is the addition of physical or form utilities to goods. This includes, transportation of goods from the point of production to the point of sale and consumption or further fabrication.

The completion of production process similarly gives rise to other factors and questions:

- What is the extent of the marketing area?

- Are the outlets conveniently located?

- What pattern would distribution take?

These are question which marketing or distribution could provide answer for, because on the demand side of the organization. Products and services need to be communicated or moved to the  customer before a cycle could be said to be completed. In the case of Innoson, this involves the physical distribution of goods to designated customer contact places by means of transportation. Considering it’s meaning of physical distribution management in a given company.

According to Taff (1972:15) in his contribution sees physical distribution as the management of movement, inventory control, protection and storage of raw materials and processed or finished goods and from production line. So in physical distribution, all other components are involves with efficient transportation of products of which the man three (3) element must be involves include warehousing, inventory control and transportation. But according to my own point of view about physical distribution management activities include identification of appropriate location of plant, equipment, deports, warehouses and made of transportation, it also includes maintenance of good communication system inventory level and proper packaging of products so that they can be transported and sorted on an economical basis. A look at the above explanation of physical distribution shows that the concept is very much all embracing and encompassed almost all aspects of the economic activities in Nigeria.

The manufacturing sector of the economy is frequently faced with it’s physical distribution questions. And as a sub-sector, Innoson industry almost has this concept tied around it. This is so since almost every event and decision of this sub-sector has bearing on physical distribution system. Thus the focal point to what extent is the physical distribution activities of any Innoson firm effective and efficient in order to give it a competitive edge over other in the market. How competitive any Innoson firm would be seen to be, is a function of it’s warehousing, mode of transportation, channels decisions, inventory level decision, packaging, good communication network activities. These issues are very delicate and required expert and competent handling in order for the firm to hold on to a competitive edge in the industry.

The Innoson industry in Nigeria has been once of very long history. They have been so much engaging in consumer goods production starting with the pioneering Nigerian Innoson company Ltd, plastic, generator and motor cycle machine. This industry has passed a stage of total important of foreign products and further to importation of raw materials up to the present use of local raw materials. The present situation is further up graded by exportation done by some Innoson in Nigeria. This is quite against stride in the industry. Many improvised approach to raw materials availability have been on ranging from cultivation of sorghum and maize by some Innoson company and further use of some local improvised equipment to component foreign inputs. Despite these improvements, quite more needs to be done to ensure greater effectiveness in the management of physical distribution activities in this sector. The market for plastic machine equipment and other lager appears distorted and diverse due to these problems.

Nigerian Innoson Ltd must always, delivery to it’s customers her products at the right time and place given a fair and competitive price. Its market is always a fragile one of which any neglect in one of the physical distribution activities could head towards giving her competition greater advantage. Consumers of plastic and machine equipment require some qualities and attribution to their brand, and any lack of such desire attributed will lead to brand switching. This conception was aptly conserved by Berry (1987) in his statement that not having convenience access to a product quickly destroys a customer’s perception of it’s values even if it is an excellent product being sold at a competitive price. Over coming this hurdle involves a well planned marketing and physical distribution strategies.

1.2   STATEMENT OF PROBLEM

The following statements of problem are pertinent with regards to this study. The Innoson factory location in Enugu along Abakiliki express road was not originally designed and constructed, but now it’s been consulted by the supervision manager in Enugu state, problem of infrastructure inadequacies are bound. Consequently, the Innoson was congested and have warehouse and storage accommodation problem’s with attendant difficulty in available spaces management loading and of loading, materials handling and movement. The company does not have enough vehicle to ensure prompt distribution of his products to various consumer outlets tired vehicles are seen packed out the main gate waiting for the products. The effect of this distorted distribution schedules and managements, which cost the customers time and sometime loss business to both parties.

The importance of application of effective inventory planning and control to ensure steady materials and products flow is often ignored or not putting interest much by company chief executive. This often results in poor lead-time management “Rush” purchases and loss of economies. The truth of this statement in respect of Nigerian Innoson Ltd in Enugu state is of concern to the researchers. There is also difficult in getting some of the raw materials, which are obtained abroad, as a result of delays in the import order; and processing resulting from port clearing. This problem is serious and could seriously affect the performance of the  company, the remote effect however is on the customers who must pay for the incidental costs emanating from these short comings.

1.3   OBJECTIVES OF THE STUDY

This study is designed towards achieving the following major objectives

i.  To explain the role of physical distribution in products marketing in Innoson company Ltd

ii. To examine the management practices in physical distribution in Enugu Innoson company branch Ltd and how it has impacted on the distribution efforts of the company.

iii. Outline any possible problem associated with physical distribution operation in Enugu Innoson Company Ltd

iv. Make recommendations on how operation performance should be improved.

1.4       RESEARCH QUESTIONS

This are another important element in any research work of any company, this are as follow by different question that is related to the research work on issue of Innoson products in Enugu metropolis

i.  who plays the important role of physical distribution in this Innoson company Ltd Enugu metropolis

ii. Does management practice tools of physical distribution exists or have some impact on physical distribution system in Innoson company in Enugu.

iii. How can this company (Innoson) improve on issue of poor road, poor communication, lack of warehouse and adequate facilities which can course problem in the movement of physical distribution in Innoson products in Enugu.

iv. Does this company has those management official who the level of performance of workers.

1.5       RESEARCH HYPOTHESES

To further guide the researcher, the following hypotheses were formulated, which can help them in verified those information been gathered in those individuals, as follows?

1. Ho:Transportation activities as carried out in Innoson company in

Enugu do not adequately cover the company’s distribution outlets and branches in Enugu

HI: Transportations activities as carried out in Innoson Company in Enugu are adequately cover the company distribution outlets and branches in Enugu

2. Ho: The spread and location of company and warehouse facilities do not have effect on the growth of Innoson turnover and product prices.

HI: The spread and location of company and warehouse facilities have effect on the growth of Innoson turnover and products prices.

1.6   SIGNIFICANCE OF THE STUDY

Many organization particularly, the manufacturing outfits appear to see physical distribution function as being of negligible importance to their operations. They appear not to appreciate the full potentialities of the function. This study will be very beneficial to companies, especially Innoson company products in Enugu metropolis wishing to consider giving physical distribution functions a prime place in their firms operation. This study would encourage Innoson company Ltd in Enugu to explore the value and profitability potentials inherent in will manage physical distribution functions. The study is equally relevant because of the knowledge it would inject into the plastic, generator and motorcycle distribution and marketing in Enugu state metropolis. The study is also significant because it will along theoretical lines as well as enhance his application of research methodology as it was thought.

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