1.3 OBJECTIVES OF THE STUDY
This study is undertaken in order to explore the academic relationship between classroom theory and what is practically obtainable in bottling company having chosen the project topic.
As assessment of the application of value analysis and value engineering in cost reduction “(A case study of United Foam Public Limited Company, Ilorin),
1. To investigate those factors that are responsible for unnecessary cost of an item in an organization.
2. To identify the benefits that can be derived from the implementation of effective value analysis programme in an organization.
3. To investigate what should be the role of purchasing in value analysis programme in an organization.
4. To identify those areas in which value analysis is applicable; that well result into cost reduction to the overall goal of organization.
5. To cause top management to realize that value analysis should really be everybody business. In one sense, maximum potential can be realized from a values analysis programme only if management properly takes these potential resources.
1.4 SIGNIFICANCE OF THE STUDY
In view of the huge expenditure on purchase of materials used in industries, it becomes imperative for the implementation of value analysis techniques to reduced cost of production in industries. It is the impact of this study to make a viable and importance rectification so as to determine alternative ways of obtaining same quality materials or items but at a reduced cost.
• It is also the significant of this study to accuse consciousness to the benefits of effective value analysis program in organizations.
• The project will also show how purchasing as a member of value analysis team is involved in value analysis programme.
• This project is also aimed at reviewing the way cost is being reduced by the use of value analysis techniques in an organization.
• The study is also undertaken in partial fulfillment of the National Board for Technical education and the Kwara State Polytechnic Ilorin, for the award of HND in purchasing and supply.
• Finally, it will remain as a data bank for future researchers.
1.5 SCOPE OF THE STUDY
This study is supposed to cover Unifoam Industries, but as a result of the researcher being a student, faced with so many work in school which involves lectures & studying for the final exams and writing of this project at the same time and due to time constraints this research work will be focusing on the very department in Unifaom company Ilorin“ that will make impact on the subject matter and these departments are as follows: Purchasing production, Quality control, Accounting, Design and Engineering Departments.
1.6 RESEARCH QUESTIONS
To achieve the objectives of the study, the following research question are necessary, notable among them are;
1. Is value analysis an effective technique in respect to cost reduction programme?
2. Does value analysis lead to a drastic cost reduction in products and services in industries?
3. Does purchasing play a vital role in value analysis programme?
4. Do those involved in product design; have enough time to critically examine possible alternatives materials and processes?
5. What has firms benefited from the application of value analysis programme?
1.7 FORMULATION OF RESEARCH HYPOTHESIS
Hypothesis represents an assumption which the researcher would like to verify hypothesis norm ally comes before the research is conducted.
Generally hypothesis may be stated in two ways.
- Null Hypothesis (Ho)
- Alternative Hypothesis (Hi)
1.Ho: Value analysis is not an effective technique in respect to cost reduction programme?
Hi: Value analysis is an effective technique in respect to cost reduction programme.
2. Ho: Not every firm requires the application of value analysis.
Hi: Every firm requires the application of value .analysis
3. Ho: There is no need for the application of value analysis in respect to cost reduction in Unifoam companies.
Hi: There is need for the application of value analysis in respect to cost reduction in Unifoam companies.
4. Ho: The application of value analysis has not in any way benefited firms.
Hi: Firms has in no measure benefited a lot from the application of value analysis programme.
5. Ho: Purchasing do not play a dual role in value analysis.
Hi: Purchasing plays a vital role in value analysis.
1.8 HISTORICAL BACKGROUND OF THE CASE STUDY
The United Foam Plc, Ilorin is located along Asa-Dam New Yidi Road Ilorin, it was established in November 8th 1982 and commission on the 9th December, 1982 by the then executive governor of Kwara State Alhaji Adamu Attah As the name implies the organization manufactures foam products like mattress and cushions for the ultimate consumer’s consumption.
The company is jointly owned by the Kwara State government with 40% shares and the private individual comprising of the foreigners and indigenes have the remaining 60% shares.
Initially, the company served it customers throughout all the local government in Kwara State. However, it has extended it marketing operation to other state of the federation, Kwara State being the gate way. The present staff strength of the manufacturing organization stands at five hundred and forty-three Despite the young age of the company compiled with the present state of the economy in Nigeria, it has made itself one of the leading and most reputable of foam product country today.
1.9 DEFINITION OF TERMS
Value Analysis:- is simply the organized systematic and continuous study of every cost elements in a part, material or service to ensure that it fulfill its function at the lowest possible cost.
Value engineering:- Has been used to refer to the design stage or before the fact value Engineering approach is used for new products and applies the same principle and techniques to pre-manufacturing stage such as concepts development, Design and prototyping.
Value:- value is the relationship between what you want, the functions and what is cost to get it.
Sourcing:- refers to a number of procurement practices, aimed at findings, evaluating and engaging suppliers of goods and services.
Purchasing:- is an activity of acquiring goods or services to accomplish the goals of an organization.
Specification:- exact statement of the particular needs to be satisfied, or essential characteristics. That a customer requires in a goods, material methods, process, service, system or work and which a vendor must delivery.
Techniques:- A systematic procedure formula, or routine by which a task is accomplished .
