CHAPTER ONE

1.1     INTRODUCTION

A quality control system in production management is a qualitative technique with strong financial implication having direct relationships with production, marketing, purchasing and financial policies.

          Also, it is a system used in the management of manufacturing held by any organization as it concern addition to, storage and removal from the trading organization with appropriate record keeping.

          S.E.D.I. Ltd, Enugu as an assembly plant maintains a large amount of stick vehicle spare parts which are imported from any of her vendor, Viz:- MBAG-Mercedes – Benz AG Germany, MBBRAS-Mercedes-  Benz Brazil or MBE-Mercedes-Benz Espana for the production line or sales to distributions or authorized agents/dealers.

          These stocks are held for various reasons among which are:

(a)      To ensure unit sufficient goods are available to meet anticipated demand.

(b)     To provide a buffer between production processes. This is applicable to work in progress stocks effectively decouple operation.

(c)      To meet possible shortages in the future.

          All these spare part, which may similar menu by description, varies greatly among themselves depending on the type of model of vehicle using them. Thus, the management and operation of stores functions and the control of stock can only be performed in an efficient manner when there is an appropriate means of upturning and storing information and the facility of the analysis and use of this information.

          In the light of the above S.E.D.I. Ltd Enugu maintains a visible records system return to as KARDEX, As a prerequisite  in any quality control system ANAMCO Ltd maintains a peculiar but unique  coding system such that all the numerous spare parts are each uniquely  coded and identified for accurate and specific information on them.

          The operation of the KARDEX was of ten prove to redundancy or duplication of items when ever there is mistitling, it requires a lot of paper work with their possible variation or discrepancies during documentation; it involves, so many people thereby wasting a lot of man hours; increased cost of procurement storage of non-moving or obsolete items leads to customer dissatisfaction due to time wasting and unavailability of information. Thus, the efficiency of the system is greatly depending on human factor and as such accuracy.

          So, it is an attempt to rectify and modify the above inadequacies that we have decided to develop and implement an integrated computerized stock control system so as to maximize the operation efficiency, ensure customers satisfaction based on quick services, minimize the non-hour requirement involved reduce the running costs, guarantee accuracy and at the same time generate report that assist management in her decision making as it concerns planning organizing and controlling.

1.2     BACKGROUND OF THE STUDY (MB-S.E.D.I LTD ENUGU)

          Sequel to the recommendation of the fourth (4th) National Development plan in 1975 to increase the number of automobile plants in Nigeria in order to address the problem of transportation a Mercedes Benz plant was chosen. Other reasons for establishing the plant being to

(a)      Transfer of technology             (b)     Manufacture and assembly of indigenous man-power training        (c )     Modernisation of industrial workers and      (e)      Diversification and rapid industrialization of the Nigeria Economy.

          MB-S.E.D.I. Ltd, as it is famously known and called means Mercedes-Benz Anambra Motor Manufacturing Company Limited Enugu. The company is strategically located along IBB-Airport Link Road Enugu Industrial Layout Enugu.

          The pliant is a joint owned by the government and people of the Federal Republic of Nigeria and Daimier-Benz AG of Germany. Their share equity is in the ratio of 60% to Nigeria and 40% to Daimier-Benz AG Germany.

          Therefore Mercedes-Ben S.E.D.I.  Ltd. Enugu was licensed to manufacture Mercedes-Benz commercial vehicle in Nigeria. The company was incorporated in Nigeria as a Private Limited Company.

          On the 17th day of January 1997. On the 12th day of May 1978, its foundation stone was laid by Colonel John Atom Kpera then the military Governor of the thin ANAMBRA STATE (NOW, ENUGU and ANAMBRA). Later, on the 8th day of June 1980 Mercedes-Benz ANAMCO LTD, wad commissioned by Alhaji; Shehu Usman Aliju Shangari, then the President Head of State Commander in Chief of the Nigeria Armed forces S.E.D.I. LTDM commenced production officially on January 1981, ever since the n her services work has spread throughout Nigeria. The company uses foreign and local contents in the manufacture of the Mercedes-Benz commercial vehicles.

1.3     STATEMENT OF THE PROBLEMS

          It is a common knowledge that decision makers in any organization requires, Information to perform the great functions of planning. Therefore, it is necessary to discover an adequate means of making the information available in making everyone concerned. This is because, for decision to be made correctly. The information must be consistent, accurate, time and reliable.

          Thus, this work is aimed at developing and implementing an integrated computerized quality control system in production of an automobile firm (Case study S.E.D.I Enugu Nigeria)

1.4     PROBLEMS OF THE STUDY

(1)     The problem encountered when carrying out this study are that obtaining this necessary information from the staff of S.E.D.I. was not easy because some of their information are regarded as company secret.   

(2)     There is competition of the way few pass personal computer, which has DBASE 111, plus application because many students make use of them in missing their project program.  

(3)     Production of spare part on manual approaches has been very difficult.

(4)     Problem of fund a lot of money is been incurred in carry out this project.

(5)     There may be inadequate or not existent stock records.

(6)     Obsolete items are retained in stock, which makes in difficult for one to know the overall items in stock.

1.5     THE PURPOSE OF THE STUDY

          The objectives of this work include the following

(1)     To ensure appropriate stock quality control coding with a view to minimizing stock redundancy or duplication inherent in the manual system of quality control system in production.

(2)     To ensure operational efficiency thereby martimasing the customer services level with increased accuracy.

(3)     To generate consistent accurate timely and reliable reports that consist the management in her decision as it affects the stock and the organization for affective planning, organization and controlling.     

1.6     SCOPE

Even though that Mercedes-Benz S.E.D.I. Ltd is the case study with her diverse inventories this work is only continued to the  administration of spare parts (finished good type of inventory) as it concerns ordering, receipts, sales and reports. Therefore, it excludes the W.I.P work-in-progress) and other forms of quality stock control. It also excludes other automobile firms.

1.7     AIMS AND OBJECTIVES

The aims and objectives of this work is that when the system becomes operational, it will:

(1)     Permit on-line time data storage and information retrieval.

(2)     Save the production time per section and as such ensure customer satisfaction. 

(3)     Increase the operation efficiency and accuracy

(4)     Reduce stock redundancy or duplication inherent in manual system.

(5)     Reduce the operational cost.

1.8     LIMITATION OF THE STUDY

Many factors hindered the realizations objectives of this work. Among this are:

(1)     Competition of the very few PCS (Personal Computers). In the computer centre the Institute, which has the National D basics application, which used in running the programs. This is because over Eighty (80) students make use of them in running their project programs as well.

(2)     Obtaining necessary information and approval from the production manager of the central spare parts department was not easy for me at most of his information required are regarded as company secrets.

This work is financially oriented as I am of ten forced to go to private computer firms to run my programs because of the competition in the computer center. The amount of money involved in transporting myself to and from such computer firms plus the amount paid for the computer time is usually environs.

1.9     DEFINITION OF TERMS

(1)     Lend or procurement time:-      This is the period of time expressed in days, weeks, months etc. between ordering and replenishment in when goods are available for use.

(2)     Demand:     This is the required by sales production etc. Pre week, month or year etc.

(3)     Economic Ordering Quantity (EOQ):-         This is the calculated ordering  quantity which minimize the balance of costs between inventory  holding costs and recorder costs.

(4)     Physical stock:-     This is the number of items physically in stock at a given time.

(5)     Minimum or safety stock:-        This is a stock allowance to cover errors in fire casting the lead time or demand during the leas time.

(6)     Maximum stock level:-   This is the stock level selected as maximum desirable which is used as an indicator to show that stock have risen to high.

(7)     Reorder level:-      This is the level of stock at which further replenishment order should be proud. It is dependent upon the lend time and the demand during the lead-time.

(8)     Reorder quality:-   This is the quality of the replenishment order. In some types of inventory control system, it is EOQ.

(a)      To absorb seasonal fluctuations in usage or demand.

(b)     To enable production processes to flow smoothly and efficiently.

(c)      As a necessary part of the production process.

All these are logical and are based on deliberate decision. Yet, stock accumulate due to the less promise worthy reasons which are:

(a)      Obsolete items are retained in stock.

(b)     Poor or non-existing inventory control resulting in over large orders, replenishment orders being out of phase with production. Etc.

(c)      Inadequate or non-existing stock records.

(d)     Marketing department.

Whether as a deliberate policy or not, represents an investment by the organization. Thus, as with any other investment, the cost of holding stocks most be related to the benefit to be gains. To do this effectively the cost must be identified and this can be done in the three categories: 

(a)      Cost of obtaining stock  

(b)     Cost of holding stock

(c)      Stock out costs.

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