Research Proposal - Ishmael Aib Samura PDF

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CHAPTER 1

1.0 Introduction This chapter shall indicate the basis of this research and shall include the background of the study, statement of the problem, aims and objectives of the study, research questions, significance of the study, limitation and scope of the research and definition of key terms. 1.1 Background of the study In today’s competitive global marketplace, the pressure on manufacturing companies to find new ways to create value and deliver to its customers grows ever stronger. The increasing need for companies to compete with its products in a global market across cost, quality and service has given rise to the need to develop more efficient warehousing strategies in aiding production. Warehousing has come to be recognize as a distinct function with the rise of mass production systems. This research will be conducted on assessing the impact of warehousing on production efficiency in Bhubaneshwar Food and Beverage Limited (BFB Ltd) in Makeni, Bombali district, Sierra Leone. This company is located at 4 Kay street, Makeni, Bombali district, Sierra Leone. They are specialized in producing different types of juice, alcoholic drinks and pure water for customers in Bombali, Tonkolili and Koinadugu. The study will analyze the current warehousing situation in the storage facility so as to increase the overall productivity of the company by optimization of the warehousing activities. A warehouse has traditionally been viewed as a place to hold or stock inventory. However, in contemporary logistical systems, warehouse functionality is more properly viewed as a mixing and modifying inventory to meet customers’ requirements, where storage of products is ideally held to a minimum (Nynke Faber, 2015 p.2) 1.2 Statement of the problem The study intends to compare the present warehouse management practice at Bhubaneshwar Food and Beverage Limited (BFB Ltd) with internationally recognized best practice which will eventually identify the non-performing areas and limitations of warehouse management through the case study of their central warehouse in Makeni. In general, this study is expected to help the 1

management and staff of Bhubaneshwar Food and Beverage Limited (BFB Ltd) to improving the existing performance of their warehouse management system. 1.3 Aim of the study The study aims at investigating the impact of warehousing on production efficiency in manufacturing companies in Bombali district. Therefore, the main aim of this research is to identify the scopes for improvement in Bhubaneshwar Food and Beverage Limited’s warehouse management. 1.4 Research Objectives The objective of this study is to evaluate the impact of warehousing on production efficiency in manufacturing companies in Bombali, while analyzing the factor related to Bhubaneshwar Food and Beverage Limited. The main research objectives of this study are as follows: 1. To point out the effect of storage facility on production efficiency at Bhubaneshwar Food and Beverage Limited (BFB Ltd). 2. To find out the relationship between warehouse management systems and production efficiency at Bhubaneshwar Food and Beverage Limited (BFB Ltd). 3. To ascertain the effect of warehouse performance on productivity at Bhubaneshwar Food and Beverage Limited (BFB Ltd). 1.5 Research question The study has the following research questions: 1. How can storage facility influence production efficiency at Bhubaneshwar Food and Beverage Limited (BFB Ltd)? 2. How does warehouse management systems correlate with production efficiency at Bhubaneshwar Food and Beverage Limited (BFB Ltd)? 3. How does warehouse performance affect productivity at Bhubaneshwar Food and Beverage Limited (BFB Ltd)?

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1.6 Significance of the study This research will contribute to the improvement of warehousing procedures and practice at Bhubaneshwar Food and Beverage Limited (BFB Ltd). It will help the management to achieve both efficiency and effectiveness in production, thereby increasing their profitability and competitive advantage. To the community and the nation as a whole, this research will be use as a basis of increasing customers satisfaction in minimizing the average lead time of production, thereby meeting customers’ demands. 1.7 Limitation and scope of the study 1.7.0 Limitation of the study To conduct a research of this nature, I will be facing some financial constraints for designing and printing of the questionnaires, transportation cost and purchase of other relevant research materials. I will also be limited by time because of my current job and I also have other things to do. Reading materials on warehouse management are hard to come by in, which will limit my research. Another possible limitation maybe the attitude of my respondents at Bhubaneshwar Food and Beverage Limited (BFB Ltd). They may choose to withhold some useful information from me, thereby limiting my research. 1.7.1 Scope of the study This study will be limited to assessing the current warehouse procedures and practice of Bhubaneshwar Food and Beverage Limited (BFB Ltd). I will be getting response from management and staff of this company, especially those working in the warehouse.

1.8 Definition of Key terms Put-away: This is the process of taking product off the receiving shipment and putting them into the most appropriate location. Order Picking: Order picking is the process of finding and extracting products from a warehouse to fulfill customer orders. Shipment: Shipping is defined as movement of goods from one place to another.

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CHAPTER 2 2.0 Introduction Warehousing can be defined as the process of storing products in a facility maintaining suitable environment during storage. The specificity of this process will need to concentrate on those factors that have a crucial impact on production efficiency; i.e. storage facilities, warehouse management systems and warehouse performance. The warehouse management process encompasses, receipt of items, storage and release of supplies on the basis of material/ stock turnover documentation, protection of supplies (from theft, destruction, damage) current maintenance of supplies or stock with consideration of sensitive goods, records of materials and control of stocks. (World Scientific News 2016, p.64). The purpose for creation of warehouse is to achieve production efficiency and increase in profitability. 2.1 The effect of storage facility on production efficiency. A storage facility is place or a building in the supply chain to consolidate raw materials or products to reduce transportation cost, achieve economies of scale in manufacturing or valueadded processes and shorten response time. Storage facilities has also been recognized as one of the main operations where manufacturing companies such as Bhubaneshwar Food and Beverage Limited (BFB Ltd) provide food, water and beverages for their customers and gain competitive advantage. Warehouse is a storage facility in the supply chain to consolidate products to reduce transportation costs, achieve economies of scale in manufacturing or purchase to provide value-added process and shorten the response time. The activity to manage the goods stored in the storage facility is called warehousing. While the warehouse has a lot of different operations, they have some common patterns in the material flow and storage facility typical operations such as receiving, put-away, replenishment internal order picking, gathering and sorting, packing, cross-crossdocking, and delivery. (Journal of Business and Management Vol 4, No.7, 2015, p.830). The purpose of storage facility is to hold inventory for a period of time. Often, storage is seen only as a cause to additional costs not as a function producing value-added operations. Additional value is something what customer is willing to pay for. However, in many cases, storage is necessary and if properly designed, it will also provide added value. A key principle in storage is 4

that in all stages of supply chain stocks are kept at minimum. This is due to the fact the capital is tied up in stocks (capital or money flow, which would be more productive to release it to other need. In this sense, the role of storage has become more cost-effective operation of business. Storage facility has an important role to integrate and coordinate the supply chain process for the important function of providing (raw materials, components, work-in-progress and finished goods), operations (distribution and order fulfillment centre), and perform (local and value-added warehouse. (Journal of Business and Management Vol 4, No.7, 2015, p.831). Within each modernize or standardize storage facility used by manufacturing companies there are series of processes or activities undertaken to ensure the flow of materials and information. The major activities within the storage facilities in manufacturing companies are:  Receiving – unloading, Quality Control, and disassembling or repacking items for storage  Put-away – determine the appropriate location for goods to transfer them to the specified  location to store and wait for orders.  Order picking – pick up goods from both storage and transport them to the sorting process or directly to the shipping area.  Shipping – inspecting, packing, palletizing and loading goods into a carrier for delivery Warehousing in Supply Chain. (Journal of Business and Management Vol 4, No.7, 2015, p.831). However, the impact of storage facility on productivity and profitability cannot be over emphasized as it brings higher returns for the company and increase production efficiency. Storage facility ensure material flows and delivery of quality products to the customers and thereby satisfying the needs of customers for the products. When storage facility is readily available to facilitate production, the manufacturing company can achieve economies of scale in production. 2.2 The relationship between warehouse management system and production efficiency. A Warehouse Management System (WMS) provides the information necessary to manage and control the flow of products in a warehouse, from receiving to shipping. Since a ware is a node in the flow of products serving or steered by other business functions, such as purchasing and sales, a WMS must communicate with other management information systems about issues including

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order acceptance, procurement, production control, finance and transportation. (Nynke Faber, 2015 p.24) A warehouse management system or WMS primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions including shipping, receiving, put-away and picking. It is a database driven computer application, to improve the efficiency of the warehouse by directing cutaways and to maintain accurate inventory by recording warehouse transactions. The implementation of Warehouse Management (WMS) will necessarily provide an increase in accuracy, reduction in labour cost if the labour employed to maintain the system is less than the labour saved on the warehouse floor and a greater ability to service the customer by reducing cycle times. WMS will not only lead in inventory but also in greater storage capacity. An increase in accuracy and efficiency of the receiving process might lead to reduction in level of safety stock required. However, WMS is instrumental and can make production become more efficient and organized which will lead to an increase in the storage capacity. The implementation of WMS for a company demands significant investment and time period (several months) which has to be justified with the benefits obtained after implementation. The justification involves the excellent analysis of the current situation of the warehouse and the warehouse operations for a specific period of time tuning the WMS. (International Journal of Computer Application, Vol 51- No.1 September 2012) Therefore, the Warehouse Management Systems is designed to support and optimize warehouse functionality and distribution centre management. These systems will facilitate management in their daily planning, organizing, staffing, directing and controlling the utilization of available resources, to move and store materials into, within and out of a warehouse, while supporting staff in the performance in the performance of material movement and storage in and around a warehouse. 2.3 The effect of warehouse performance on profitability. A key factor in successful warehouse operations depends on a three-legged stool of productivity, efficiency, and secure operations. Today, Warehouse Management System support many warehouse functions, giving managers a new source of productivity and efficiency insights. In general, warehouse aim at simultaneously reducing cost, increasing productivity, and improving customer responsiveness. Measuring warehouse performance provides feedback about how the 6

warehouse performs and compared to the requirements or compared to industry peers. As such, it can also provide feedback on the adequacy and effectiveness of an implemented Warehouse Management structure (Nynke Faber, 2015 p.10). Optimizing labor productivity is the primary goal within warehouse operations. Most importantly, this means measuring employee output when using technology solutions such as warehouse management systems and inventory management applications. Businesses need to obtain insights on technology-based productivity and use this data to further drive productivity. Measuring warehouse metrics is critical for providing managers with clear vision of potential issues and opportunities for improvements. Metrics are tied directly to the business strategy and operation’s success drives the financial results of the organization. If warehousing is going to contribute to be a source for adding value to the supply chain, then they need to measure their performance with perfect metrics or indicators. (International Journal of Computer Application, Vol 51- No.1 September 2012) First, you must have a starting point to measure and then improve. Take a snapshot of current productivity. What options are available within your warehouse and inventory management systems to track employee output? You may be able to determine insights from application reporting or logging within the application. Alternately, user monitoring software can provide information on application use, active vs. idle time, and similar productivity measurements. Johnson and McGinnis (2011) discuss two types of warehouse performance criteria: financial (i.e., resources related to cost) and technical (i.e., outputs related to inputs). They argued that technical criteria – based on output generated and resources consumed – tend to give a clearer picture of a warehouse’s operational performance than financial measures, because warehouses typically do not generate revenues. The function of warehouses is to support the supply chain. (Nynke Faber, 2015 p.10). Productivity measurements based on application throughput provide another benefit as it can form the basis for fair and equitable performance-based compensation. Beyond productivity measurements, examining in greater detail how your employees are using your software applications is another way to enhance operations. This involves going beyond the transactionscompleted perspective and looking at interactions from a process and usability perspective.

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Table 1 – Performance Metrics of a warehouse Category

Measure On time delivery Order fill rate Line accuracy Order cycle time Perfect order completion Inventory Accuracy Damaged inventory Store utilization

Definition Orders delivered on time per customers requested date Orders filled completely on first shipment Lines picked, packed and shipped perfectly. Time from order placement to shipment. Order Orders delivered without changes, damage or invoice fulfillment errors. Actual inventory quantity to system-reported quantity. Damage measure as a % of inventory value Occupied space (square footage) as a % of storage capacity (square footage) Inventory Dock to stock time Average time to from carrier arrival until product is management available for order picking. measures Inventory visibility Time from physical receipt to customer service notice of availability. Orders per hour Average number of orders picked and packed per person – hour Lines per hour Average number of orders line picked per person – hour Warehouse Items per hour Average number of orders line picked per person – productivity hour Cost per order Total warehousing costs – Fixed: space, utilities and depreciation Variable: labour/ supplies Cost as a % of sales Total warehousing cost as a percent of total company sales Performance Metrics of a warehouse (International Journal of Computer Application, Vol 51No.1 September 2012) 2.4 Summary of Literature Review Storage facility is very essential to a manufacturing company for them to achieve efficiency in their production. When raw materials are bought, they need to be stored in a conducive storage facility. When goods are produced, they also need to be stored awaiting demand for the products from customers. However, most manufacturing companies in Sierra Leone, especially in the provinces lack proper storage facility and as such, this has hampered their capacity and ability to meet customers’ demands for their products. (Sierra Leone Storage Assessment, March 2016, p.1) 8

To every manufacturing company, production efficiency matters. Getting more units produced, more sales, more revenue for less waste and less labour cost is every production manager’s dream. A warehouse management system (WMS) helps a manufacturing company to increase it productivity level by putting systems in place (computerized system) to control the flow of production in a warehouse. Most manufacturing companies in Sierra Leone don’t use such systems in their production technique. (Nynke Faber, 2015 p.24) Production efficiency is an important measure of a manufacturing company’s performance in terms of meeting the capacity requirements of needs of the customers. The primary goal of every company is to reduce cost, increase production and improve on customers’ demands and response for the product. (Nynke Faber, 2015 p.10). 2.5 Conclusion For any manufacturing company such as Bhubaneshwar Food and Beverage Limited (BFB Ltd) to achieve efficiency in production, there is the need for proper storage facility and a well-structured warehouse management system which lead to greater increase in warehouse performance and profitability. Generally, production efficiency can be achieved as a measurement of actual out to the standard output expected. Companies can maximize their storage space through appropriate storage designs, material handling, effective warehouse management systems (WMS) and ensuring the availability of technical and personal resources to achieve the planned level of activity. To measure efficiency of production and monitor warehouse performance, there are key performance indicators (KPIs) that need to be taken into consideration. Some of these indicators are as follows: rotation of inventory, the average number of employees in the warehouse. CHAPTER 3 3.0 Introduction Research is about collecting information that tells us about something and it helps us to make informed decisions. In other words, research is a way of gathering data or information which we then organize in a coherent way, so that we can use it or act on it. Therefore, research methodology are the formal steps we use to go about our investigation or asking questions. In this

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chapter entails the research design, population and sampling, data collection techniques, research procedures, quality control, data analysis and budget. 3.1 Research Design This study is designed to explore the overall impact of warehousing on production efficiency at Bhubaneshwar Food and Beverage Limited (BFB Ltd) and will help to identify the scope of improvements. In other to achieve this objective, the study will use both quantitative and qualitative research models (Triangulation model). Primary and secondary data will be collected with the help of structured questionnaires and conducting interviews ...