CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The need for quality has been a vital part of business activities since the introduction of globalization. At the beginning of industrialization, production was basically carried out by the cottage industry and greatly depended on artisans (Powel, 2015). The producers were simply in sellers' market. Nevertheless, the trend has changed from sellers' market to buyers' market. The customers have become more familiar with the range of products in the market. Therefore, clients are the focus of production such that every organization needs to examine what customers require and offer services and products that would certainly satisfy those requirements for the company to continue to be in business. Barney (2012) mentioned that high quality of products is determined by clients and therefore clients have become the essential factors that create competition amongst organizations and this makes companies to concentrate more on high quality services and products that are required by clients in an effort to continue to be competitive in the business setting (Anderson, Rungtusanatham and Schroder, 2015).
Superb quality of services and products determine sales volume and profitability therefore serving as important factor in an organization and contributing to the growth of the economy. On the other hand, in the light of enhancing complexities and the change from local to international tiers of market areas, there have been continuous pressures applied on the management organizations to enhance competitiveness by reducing operating cost and improving logistics (Motwani, 2014). The clients are becoming increasingly familiar with rising standards having access to wide variety of services and products to choose from. There is an ever-increasing need for high quality services and products and this worldwide transformation is compeling organizations to spend considerable resources in embracing and implementing total quality management (TQM) techniques. Total quality management describes as total commitment to high quality in all areas, functions and operations within a business (Garvin, 2011). Total quality management allows every person in the company responsibility for delivering high quality to the final consumers. TQM views each task in the company as essentially a process in a customer-stage is to define and satisfy the customers' needs in an effort to maximize their satisfaction and maintain their patronage. Incompetence on the part of employees might lead to low quality result (Gaspersv, 2015). Therefore, high quality item delivery at all times improves organization sales volume and customer patronage. For many years, lots of companies witnessed different adverse effects as a result of low-quality products, fake and adulterated products as a result of poor-quality control (Jung and Wang, 2016). If services and products are not of high quality and required specifications, it will not command high sales volume and the organization will experience poor revenues in the market place.
Two writers (Banner and Garvin, 2015) suggested that organizations ought to take note of the balance between high quality and research issues and use them in their macro strategy. They suggested that presence of organizational qualitative facility is important for improving organizational resources in order to achieve higher productivity and exceptional performance (Powel, 2015). Hence, this study seeks to investigate the effect of total quality management on sales volume Nigeria Bottling Company as a case study.
1.2 Statement of the Problem
The study focused to figure out the issues of total quality management on sale volume on the bottling company of Nigeria. This is essential due to the fact that total quality management might be viewed as its kinds types features, property and level of its benefits or excellence. Nevertheless, lot issues are encountered by many manufacturing company with the Nigeria bottling company included in their products. These issues consist of: meeting the required standard, among the issues is that the products are not meeting the expected standard, if a company's products are satisfying the clients demand, then it is essential to develop a standard for the functional and appearance aspect of their product along with their durability requirement and the firm will meet great sales volume. This facet is basically the general requirement for establishing an overall quality management department in order to guarantee that standards are purely maintained for good sales volume. Issues of meeting products specification, many times, product fail to satisfy the specification needed by clients due to assignable causes like; defective materials used, inappropriate setting of equipment, operational errors, workforce and so on. it is not worthy of mention that it cost the exact same amount to produce products units' problems of variant in quality of product. That product by mass production technique on equipment consistently, produces with unconsciously differing quality of the products as a result of lack of appropriate quality control in place. Emphasis should therefore, get on prevention rather than error discovery. As a result, the achievement of ideal total quality relies on ideal human performance or behavior when the product is being produced. It is a pity nevertheless that in the reality of economic depressions like our society, supervisors in manufacturing company go to any length to compromise standard for their employees and for their own selfish interest. To ameliorate this vice a quality control manager ought to be effectively remunerated to ensure that he can carry out his works effectively.
1.3 Objectives of the Study
The main of this study is to determine the effect of total quality management on sales volume Nigeria Bottling Company as a case study. However, the specific objectives include:
i) To examine the correlation between total quality management (TQM) and sales volume at Nigeria Bottling Company.
ii) To determine whether product quality is part of the Nigeria Bottling Company policy and strategy.
iii) To investigate the degree to which total quality management has contributed to the overall corporate performance of Nigeria Bottling Company.
1.4 Research Questions
The following research questions were developed to guide the study:
i) What is the correlation between total quality management (TQM) and sales volume at Nigeria Bottling Company?
ii) Is product quality part of the Nigeria Bottling Company policy and strategy?
iii) To what degree has total quality management contributed to the overall corporate performance of Nigeria Bottling Company?
1.5 Research Hypotheses
The following research hypotheses are formulated to guide the study:
i) There is a significant correlation between Total Quality Management practice and SMEs performance in Nigeria
ii) Product quality is part of the Nigeria Bottling Company policy and strategy.
iii) Total Quality Management has not contributed to overall corporate performance of Nigeria Bottling Company.
1.6 Significance of the Study
Total Quality Management (TQM) requires considerable survey research. It expresses the convictions that in order to improve quality, the organization must regularly conduct survey to evaluate quality improvement and exploration stage during which organizational management makes a commitment on total quality assurance and business researchers explore the needs and belief of external and internal customer. Thus, this study is significantly designed and carried out in order to enlighten products promoters of products about the importance and relevance of high-quality products since it increases sales and organizational productivity and also to prove that only high-quality product succeed and that this can only be attained through the practice of Total Quality Management (TQM).
The study will be of immense benefit to the researcher, the organization under study in achieving its goal and objective, other researchers, and the general public. It is sincerely hoped that the result of the study will be applied in areas that need to be improved in the organization under study. The study will also widen the horizon of the research on the topic under study and it will serve as reference to the researchers.
1.7 Scope of the Study
The study is limited to the Nigerian Bottling Company Lagos Firm, but the study will look at the entire concept of Total Quality Management as well as the major cost component of production and finally the application of Total Quality Management on material cost of production and finished goods cost.
1.8 Definition of Terms
The following terms were used in this study:
Quality: fitness for purpose at lowest cost
Management: the process of planning organizing coordinating directing and controlling.
Effectiveness: the ability to bring about the intended result in respective of cost
Quality management: this is the overall management function that determines and implements quality policy.
Specification: this is the detailed description of an item.
Scrap: this is defect, materials or staffs that cannot be repaired or used
Total Quality management: (TQM) this is a management approach to an organization centered on quality based on participation of all its members of the organization and society.
Performance: performance means doing a job as per specification with efficient use of resources.
Materials: materials are resource used directly or indirectly to produce or incorporate finish goods.
Standard: A predetermined and accepted way of doing things or the accepted state of thins.
1.9 Brief History of the Nigerian Bottling Company
The Nigerian Bottling Company Plc (NBC), a fast-moving consumer goods company was incorporated in Nigeria on November 1951, as a subsidiary of the A.G. Leventis Group with the rights to bottle and sell Coca-Cola products in Nigeria. Since then, the company has grown to become a predominant manufacturer, bottler and sale of over 33 different Coca-Cola brands of non-alcoholic beverages in Nigeria. Apart from the widely known Coca-Cola drink, other popular brands of beverage produced by the company are Eva Water, Five Alive fruit juice and the newly introduced Burn energy drink. The company presently has bottling facilities spread over 13 locations and over 80 distribution warehouses located across the Nigeria. To this the company has remained the largest bottler of non-alcoholic beverages in the country in terms of sales volume, with about 1.8 billion bottles sold per year, making it the second largest market in Africa. To ascertain the communication as an indispensable tool for effective administration, the Nigerian Bottling Company, Abuja is selected to be a case study to cover for other branches of the company spread across Nigeria.
