MANUFACTURING STRATEGIES FOR THE … PIUS EKPE...v ABSTRACT This study employs the “SWOT matrix” technique to formulate manufacturing strategies for the cassava industry in Nigeria

i

MANUFACTURING STRATEGIES FOR THE CASSAVA INDUSTRY IN NIGERIA

BY

UBONG PIUS EKPE (PG/MENG/04/35972)

A PROJECT SUBMITTED TO THE SCHOOL OF POSTGRADUATE STUDIES AND THE DEPARTMENT OF MECHANICAL ENGINEERING, UNIVERSITY OF NIGERIA,

NSUKKA, IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTERS OF ENGINEERING

DEPARTMENT OF MECHANICAL ENGINEERING

FACULTY OF ENGINEERING

UNIVERSITY OF NIGERIA

NSUKKA

JANUARY, 2008

ii

CERTIFICATION

Mr. Ubong Pius Ekpe, a postgraduate student in the Department of Mechanical

Engineering, specializing in Industrial Engineering Management, has satisfactorily

completed the requirements for course and research work for the award of the degree

M.Eng. in Mechanical Engineering. The work embodied in this thesis is original and has

not been submitted in part or full for any degree of this or any other university.

…………………………… ….…………………….

Prof. S. O. Onyegegbu (supervisor) (External Examiner)

……………………………………..

Prof. S. O. Onyegegbu (Head of Department)

iii

DEDICATION

To My Uncles

Raphael Paul Ekpe Dominic Alexander Ekpe Joseph Clement Atata

And Aunts

Josephine Ekpe Cecilia Enwenwen

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ACKNOWLEDGEMENT

My gratitude goes to my project supervisor Prof. S. O. Onyegegbu for his thorough review of the

manuscript, helpful suggestions, constructive criticisms and motivation. My deep affection and appreciation to my beloved wife Mary and children Ubon, Jeremiah,

Anthonia and Edidiong for their patience, love and encouragement I am also grateful to my dear mother, uncle Raphael Ekpe, brothers, sisters, inlaws , my room

mate Mr. Bedung Polycarp, Dr. C. C. Chinaka of the National Root Crops Research institute(NRCR), Umudike, and staff of cassava industries used in the study.

The invaluable contributions of friends, colleagues, individuals and relations who are too

numerous to mention is also appreciated.

To God Be The Glory

v

ABSTRACT

This study employs the “SWOT matrix” technique to formulate manufacturing strategies

for the cassava industry in Nigeria. The motivation for the study is the seemingly wide

gap between the supply and demand for manufactured cassava products despite the

industry’s potentials in the area of abundant raw materials and high demand for its

products. A strategic analysis was carried out on eight industries in Akwa Ibom state

using “environmental scanning” technique. Data from strategic analysis was used to

construct a profile of strength (S), weaknesses (W), opportunities (O) and threats (T) that

influence the industry’s ability to achieve its manufacturing goals. The “SWOT matrix”

technique of strategy formulation was then applied to analyze the profile and evaluate

various strategic options that were generated by the interaction matrix to arrive at twelve

strategies. Findings from the study show that government has a greater role to play in

developing the manufacturing capacity of the cassava industry. Most cassava industries

were also found to be operating below installed capacity due to lack of funds, erratic

public power supply, irregular supply of raw materials, use of obsolete machineries, poor

plant facility layout and below average managerial skills. The study recommended that

modern cassava machineries such as the cassava-peeling machine be imported and

redesigned by Nigerian engineers for local use. An alternative method of disbursing

loans to cassava industries that emphasizes less on collateral was also recommended.

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TABLE OF CONTENTS

Title Page . . . . . . . . . . . i Certification . . . . . . . . . . . ii Dedication. . . . . . . . . . . . iii

Acknowledgement. . . . . . . . . . . iv

Abstract. . . . . . . . . . . . v

Table of contents. . . . . . . . . . . vi

List of figures. . . . . . . . . . . viii

List of Tables. . . . . . . . . . . ix

CHAPTER ONE: INTRODUCTION 1.1 Background of the study. . . . . . . . . . 1

1.2 Statement of problem. . . . . . . . . . 2

1.3 Purpose of the study . . . . . . . . . 3

1.4 Significance of the study . . . . . . . . . 3

CHAPTER TWO: LITTERATURE REVIEW 2.1 The cassava industry: Products, processes and machines. . . . . 4

2.2 Manufacturing concepts and the cassava industry. . . . . . 7

2.3 Dimensions of manufacturing strategy. . . . . . . . 8

2.3.1 Internal dimensions of a manufacturing strategy. . . . . . 8

1.Product concept, design and development. . . . . . 8

2.Manufacturing plants and facilities. . . . . . . 9

3. Manufacturing technologies and practices.. . . . . 10

4. Logistics and material control. . . . . . . 11

5. Human resource management. . . . . . . 13

6. Organization and management systems. . . . . . 13

2.3.2 External dimensions of manufacturing strategy. . . . . . 15

1.Competitive factors. . . . . . . . 15

2. External success factors . . . . . . . 15

2.4 Manufacturing strategy formulation process. . . . . . . 16

2.4.1 Step 1: Strategic analysis. . . . . . . . . 17

2.4.2 Step 2: Strategic choice. . . . . . . . . 19

vii

2.5 Generation of options. . . . . . . . . 19

1. Concentration or specialization strategy. . . . . . 19

2. Innovation strategy. . . . . . . . 19

3. Growth strategies. . . . . . . . . 19

4. Stability, do nothing, consolidation or no change strategy. . . 20

5. International strategy . . . . . . . . 20

6. Retrenchment strategies. . . . . . . . 21

2.6 Evaluating the strategic options. . . . . . . . 21

2.7 The SWOT matrix: A conceptual model. . . . . . . 22

2.8 Related empirical studies. . . . . . . . . . 26

2.9 Summary of literature review. . . . . . . . . 27

CHAPTER THREE: METHODOLOGY AND STRATEGIC ANALYSIS 3.1 Methodology. . . . . . . . . . . 28

3.2 Scope of the study. . . . . . . . . . 29

3.3 Data and information sources for the study. . . . . . . 29

3.4 Area of study . . . . . . . . . . 30

3.5 Strategic analysis result . . . . . . . . . 31

3.6 Summarizing strategic analysis result into a swot profile. . . . . 34

3.6.1 Identifying strengths , weaknesses, opportunities and threats from strategic analysis . 36

3.7 SWOT profile for the cassava industry . . . . . . . 37

CHAPTER FOUR: SELECTION OF MANUFACTURING STRATEGIES 4.1 Strategies for the strength and opportunities (SO) segment. . . . . 39

4.2 Strategies for the strength and threat (ST) segment. . . . . . 39

4.3 Strategies for the weakness and opportunities (WO) segment . . . . 40

4.4 Strategies for the weakness and threat (WT) segment . . . . . 41

CHAPTER FIVE: RESULT, CONCLUSION AND RECOMMENDATIONS 5.1 Result . . . . . . . . . . . 43

5.2 Conclusion. . . . . . . . . . . 44

5.3 Recommendations . . . . . . . . . 45

Bibliography . . . . . . . . . . . 46 Appendix I : Profile of Industries used for the study . . . . . . 51 Appendix II: Details of Strategic analysis . . . . . . . 52 Appendix III: Analysis of interaction matrix of strategic segments . . . . 56

viii

LIST OF FIGURES

2.1 Schematic illustration of some important cassava products manufacturing processes . 5 2.2 Supply chain schematics for the cassava industry in Nigeria . . . . 6 2.3 Graphic definition of manufacturing . . . . . . . 7 2.4 Model of manufacturing strategy elements . . . . . . 16 2.5 Operational activities leading to the SWOT matrix analysis . . . . 22 2.6 Strategies indicated by the SWOT matrix analysis . . . . . 23 2.7 Associating weakness with relevant strategic dimensions . . . . 25 3.1 Model of strategy formulation elements. . . . . . . . 28

ix

LIST OF TABLES

2.1 Important considerations for SWOT profile . . . . . . 18

2.2 Relationship between generic strategies and the Swot matrix technique . . . 25 3.1 Strategic analysis of the cassava industry . . . . . . . 31 3.2 Important considerations for SWOT profile . . . . . . 35 3.3 SWOT profile for the cassava industry . . . . . . . 37 4.1 Interaction matrix of strategic factors . . . . . . . 38 4.2 Selected strategies from interaction matrix . . . . . . 42 5.1 Collation of formulated strategies . . . . . . . 43 A1 Interaction matrix for strength and opportunities (SO) strategic segment. . . 56

B1 Analysis for table A1. . . . . . . . . . 57

A2 Interaction matrix for strength and threat (ST) strategic segment . . . . 58


A3 Interaction matrix for weakness and opportunities (WO) strategic segment. . . 59


A4 Interaction matrix for weakness and threat (WT) strategic segment . . . . 63


1

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

With Nigeria as the current highest producer of cassava in the world1, the Cassava industry

holds high hopes towards the diversification of the nations industrial base from hydrocarbon(oil) which

is non sustainable to a carbohydrate based economy that involves the conversion of renewable biomas

resources such as cassava into useful chemicals and fuel. Processed Cassava products in addition to

being food for humans have gained significant recognition as a source of raw materials for livestock,

textile, chemical and plastic production. As at the last count, about 2500 products can be derived from

the cassava crop2. It is also reputed in the Food and Agricultural Organization (FAO) document1 as

having more utilization than any known crop.

Technically, Nigeria could be a world market leader in cassava products as climate, market, high

yielding varieties, planting materials, human resources, capital availability and infrastructural adequacy

are known and available3. Processed Nigerian cassava products have also gained an improved

patronage in the international market. If government sustains its present policy of discouraging import,

the increased demand for processed cassava products for export will continue. Thus, there is an

increased potential of the cassava industry in terms of industrialization, expansion, modernization,

poverty reduction, creation of wealth and job opportunities at the grass roots and reduction in rural

urban migration.

With such immense potentials, the cassava industry vis-à-vis its manufacturing functions, if

properly managed and developed using suitable strategies could lead to rural industrialization and

improve the industrial base of the nation. It will also create employment, supply raw materials to other

industries and improve the economy. More investors and entrepreneurs are therefore, required in the

establishment of cassava industries and manufacturing of processed cassava products for export to

sustain this tempo. Some progress has already been made in this direction. For example, Nigeria intends

to establish 500 cassava-processing plants nationwide2. Kogi State government in partnership with a

2

Chinese firm also plans to establish a cassava ethanol fuel factory in Kabba, Kogi State, a development

the Nigerian Television Authority (NTA) described in its 9p.m national network news of Sunday,

April 15, 2007 as a “revolution in the marriage of agriculture and energy”.

With this trend, there is also need for proper documentation of research findings and dedicated

publication of reading materials on the cassava industry and related issues cutting across all interests.

Nweke,51 asserted that “most researches on technical themes in the cassava industry are mostly

concerned with such issues as processing and utilization, technologies for storage and design of various

machines used in the cassava industry. but not much work has been done on the manufacturing

strategies for the industry so as to cub the wide gap that continues to exist between the supply of and

demand for processed cassava products’’. Thus, the cassava industry stakeholders are denied the

necessary guidance on adequate manufacturing techniques. They therefore continue to rely on outdated

and crude manufacturing methods which results in high cost of production, low quality products, low

capacity utilization, high cost of products and continuous importation of cassava products into the

country at the detriment of the economy. It is this disturbing trend in the cassava industry that has

motivated this effort at “formulating a manufacturing strategy” for the industry.

1.2 STATEMENT OF PROBLEM

Despite improvements in manufacturing efficiency over the years, production of cassava to near

real time demand is easier said than done4. Thus, the Nigerian cassava industry with it’s great potentials

is yet to be transformed from its present subsistent state to a large-scale industry, capable of providing

adequate job opportunities and products to meet internal consumption and export. What is on ground

are incidences of glut, low quality products, poor producer prices and low productivity which have

become its permanent features. The perennial underperformance of the cassava industry despite its

potentials and efforts by the government and private sector at once highlights an intriguing lacuna.

Traditionally, manufacturing is important for the success of any company and a flourishing

production system is a requirement for the socio-economic, political existence and rapid

industrialization of a country. Skinner5, asserted that manufacturing process in many industries has been

put aside in favour of financial and marketing influences. Hill6, also claims that if a company is to

succeed, there must be a clear-cut manufacturing policies or strategies. In this perspective,

3

manufacturing strategies are necessary for a company’s competitiveness and survival7. A manufacturing

strategy is therefore the fulcrum from which accelerated industrial growth can be leveraged.

The continuous failure of the government, her institutions, the public, and private sectors to

articulate the potentials of the cassava industry through suitable manufacturing strategy could continue

to be the cassava industry’s undoing. Consequently, the need for the formulation of a manufacturing

strategy for the cassava industry in Nigeria constitutes the problem this study intends to address.

1.3 PURPOSE OF THE STUDY

The purpose of this study is to help accelerate the development of the cassava industry by

formulating a manufacturing strategy that can be used to guide and manage its production functions,

realize its abundant potentials and spur rural industrialization in the country.

1.4 SIGNIFICANCE OF THE STUDY

This study is expected to benefit all the stake holders in the cassava industry particularly the

academics, government ministries and parastatals such as; the Ministries of Industry, Agriculture, and

Commerce, farmers, cassava entrepreneurs, engineers, industrialist and managers.

Thus, results from this study:

1) Will contribute to existing knowledge on the cassava industry and as a resource material for

subsequent studies

2) Will form the basis for policy formulation, review, and implementation

3) Will aid the engineers in the intricacies of managing and facing manufacturing strategy

formulation challenges

4) Will guide the farmers, industrialists, investors, cassava entrepreneurs and managers in the

establishment, management and operation of the manufacturing function in the cassava

industries

4

CHAPTER 2

LITTERATURE REVIEW

2.1 THE CASSAVA INDUSTRY: PRODUCTS, PROCESSES AND MACHINES

The Cassava industry utilizes its manufacturing functions to process cassava into various products

and thus, offer good opportunities for adding value to cassava. Eggleston, Bokanga and Jeon8 asserted

that manufactured cassava products offer such benefits as reduction in high post harvest losses,

increases labor efficiency, productivity and income. It also improves the hygienic quality of cassava

products, enhances cassava product’s shelf life and facilitates their transportation and marketing.

Nutritional values could also be improved during processing by addition of food composites or by

fortification.9

In the industrial processing of most cassava products, some mechanical processes are usually

applied (see figure 2.1). These include peeling, washing, grating, fermenting, squeezing, sieving,

drying, heating/cooking, sedimenting etc. These processes are applied using small equipment and

machines, such as dryers, expellers, millers, sifters, prime movers and so on. The choice of process is

based on factors like locality, quality product, product demand and level of known processing

techniques. Consideration is also given to the scale of production; family consumption (small scale) or

for export (medium to large scale). Consequently, popularly processed cassava products include:-

Cassava flour

Alcoholic Beverages

Cassava chips

Animal feeds

Cassava starch

Garri/fufu etc

Pellets

Industrial Ethanol

Glucose syrup

Monosodium Glutamate

Dextrose

Glue

Dried Yeast

Cassava stalk particle board

Malt Drink

Caramel

Bio-degradable shopping bag

Others are in the industrial production of paper, textile

and adhesives

5

Fermentation Dewatering Granulation Garifying Drying Sieving Milling Blending Packaging Gari (Yield of 20-25% at 10% Moisture content)

Soaking & Fermentation Pulping & sifting Sedimentation Dewatering Breaking & Granulation Drying Sieving Milling Blending

(i.e. sievate & milled Cassava grains mixed) Packaging Fufu flour (20 –25% of fresh tubers at 10% moisture Content)

Cassava Tubers Sorting Weighing

Peeling –Peels Washing

Adapted from: Umanah, E.17

Grating/Pulping

Fermentation Screening rasping Washing Settling purification Drying Pulverizing Sifting Packaging ( Moisture Content 10-13%. Yield15-20% of fresh tubers)

Starch Modification

Dextrose

Maltose Syrup

Glucose

Ethanol

Detoxified Cassava Starch

Screening Washing Settling Drying Pulverizing Sifting Packaging (At 10% moisture content. Yield is 15-20% of fresh tubers)

Normal Cassava starch

Dewatering (pressing) Drying (8hrs) Milling Sieving Packaging (At 10% moisture Content. Yield 20-25% fresh tubers)

Cassava four UQCE

Chipping Drying Packaging Cassava Chips (Moisture content about 10% Yield 25–30% fresh tubers)

Chipping Pressure Drying Packaging Cassava pellet (Moisture content about 10% Yield 25 –30% fresh tubers)

Figure 2.1: Schematic Illustration of Some Important Cassava Products Manufacturing Processes

Biodegradable Products

6 Various permutations and combinations of cassava products, manufacturing processes and machines

therefore form the basis for the establishment of several diversified cottage, small, medium or large

cassava industries some of which are listed below. The Supply chain schematic for some of the

industry’s products is also illustrated in figure 2.2.

Cassava starch industry Cassava flour industry

Cassava Ethanol industry Cassava Animal feed industry

Cassava pellet industry Garri industry

Cassava peeling industry Cassava grating industry

Cassava milling industry And so on.

Obviously, the cassava industry is a much-diversified industry in terms of types and products. It is also

characterized by non-application of modern production techniques to guide how manufacturing

activities are conducted3; and thus the need for the development of suitable manufacturing strategies as

advocated by Skinner5

Source: Phillips et. Al10

Figure2.2: Supply Chain Schematic for the Cassava Industry in Nigeria

7 2.2 MANUFACTURING CONCEPTS AND THE CASSAVA INDUSTRY

All elements of the industry associated with generating its products for profit define the

manufacturing process for the industry11. This definition of manufacturing as illustrated in figure 2.3

includes such upstream functions as product planning, design, and engineering as well as some elements

of such downstream functions as purchasing, sales, distribution and service.

Source: Dilworth, J. B11

Figure2.3: Graphic Definition of Manufacturing

Since the manufacturing function in an industry is at the heart of its success, having a strategy that

ensures a match, or congruence, between the company’s markets and the existing and future abilities of

the production system is essential12. A manufacturing strategy is therefore a long-term plan for future

success or development of all processes that transform the industry’s products and all associated

processes and services. According to Hill6, a manufacturing strategy is defined as a pattern of decisions,

which determine the capability of a manufacturing system and specify how it will operate to meet set

manufacturing objectives. Issues generally addressed by manufacturing strategy include manufacturing

capacity, production facilities, use of technology, vertical integration, quality, production

planning/materials control, organization, personnel etc. The concept of manufacturing strategy is traced

to Skinner's5 Harvard Business Review article, "Manufacturing- Missing Link in Corporate Strategy".

Skinner5 suggested a top-down approach to manufacturing and advocated that manufacturing objectives

should be derived while manufacturing strategies or policies are developed to address these objectives.

Market and Competitive Research

Basic Technology Research�

Corporate Strategy Planning�

Distribution and Service�

Production Operations�

Tooling and Facilities Design and Installation�

Process Planning Manufacturing Engineering�

Product Design and Engineering�

Product Planning�

Market and Competitive Research

Purchasing�

Broad Definition

Narrow Definition

8 Manufacturing objectives could include cost, quality, delivery etc. Trade-off decisions are also required

in some key areas in order to support the manufacturing objectives. The five main decision areas

advocated by Skinner5, where trade-off could be implemented are; plant and equipment, production,

planning and control, labour and staffing, product design and organisation and management. These

basic ideas (trade-offs and consistency of objectives/policies) have formed the foundation from which

the current understanding of manufacturing strategy has developed.

2.3 DIMENSIONS OF A MANUFACTURING STRATEGY

Pertinent factors whose analysis provides necessary information in the strategy formulation process

are termed6 “dimensions of manufacturing strategy”. According to Punk13, they are usually classified

into internal and external factors.

2.3.1 INTERNAL DIMENSIONS OF A MANUFACTURING STRATEGY

These are in six broad categories:-

1. PRODUCT CONCEPT, DESIGN AND DEVELOPMENT:

a. Technology (or R&D) Management Practices. These are processes used by Senior

management to assess:-

♣ The effectiveness and efficiency of its (R&D) resources for specific product planning and design

♣ The areas of technology on which to focus

♣ The approaches, tools and facilities to be invested

b. Product Planning Practices: These are approaches used for new product development and

product renewal planning. They include:

♣ The cycle times used

♣ The time limits.

♣ The kinds of external research underlying the planning process (e.g. market, competition,

technology trends).

♣ The personnel organizations involved in the planning process.

9 c. Advanced Engineering Techniques: Technologies and methods used to manage the product’s

engineering process as efficiently as possible. These techniques include:

♣ Considering previous products/designs for part or subassemblies in a family of parts (e.g, the use

of group technology systems)

♣ Controlling engineering changes and product configurations through formalized procedure

♣ Factoring design cost considerations into the total production cost calculations.

d. Project and Resources Management: These are computer-based tools and modern

management techniques used to manage efficient product development projects.

These might include.

♣ Project and resource matrix management structures

♣ PERT-type project management systems

♣ Time and cost recording systems

e. Design and Engineering Automation Aids: These include the use of:

♣ State of the art computer-aided design, engineering, and manufacturing tools and systems

♣ Design data bases

♣ Analysis and performance simulation aids.

♣ General-purpose engineering problem-solving computing tools

f. Integration of Product and Manufacturing Engineering: The use of fully balanced

multidisciplinary design teams for product development. The better these multiple engineering

functions are integrated, the more successful the product family and manufacturing.

2. MANUFACTURING PLANTS AND FACILITIES

a. Multiple Plants: This includes the distribution of facilities and their functions, capacities and

inherent cost factors (e.g., labor costs). The question of owning many plants, functional

specializations, and relative geographic and distribution factors can be the dominant issue in a

large enterprise.

b. Plant Facilities: This applies to the specific situation of each plant as well as the total network.

Such factors as the age of the facility, its present physical condition, its potential for

modernization, its size and expansion potential, and special constraints or assets associated with

10 that plant (e.g. zoning restrictions, proximity to power sources, availability and quality of local

labor) must all be enumerated and evaluated.

c. Production Philosophy: This factor involves the following considerations:

♣ Whether the plant is dedicated to a specific product or type of product or whether it is flexible

enough to manufacture a variety of products.

♣ Whether the production techniques are continuous flow in nature versus batch oriented

♣ Whether it is a high-volume operation or lower capacity, high-quality process

d. Plant Layout: The plant’s physical layout involves the following criteria:

♣ Whether machines are organized by type or by product or process cell.

♣ What approaches are used for internal material movement, how much flexibility there is for

altering this layout, and whether the layout is logical and efficient

e. Capacity Planning: This addresses the following areas:

♣ The approach taken to planning capacity requirements and how to meet them.

♣ Projecting and leading as opposed to following and catching up with market demands.

♣ Cycle times for reviewing capacity requirements

♣ Approaches to adjustments (e.g. layoffs, external contract production or use of overtime).

3. MANUFACTURING TECHNOLOGIES AND PRACTICES

a. Process Technologies: This considers the actual manufacturing process needed. Consideration is

given to whether the process is:

♣ Labor versus capital intensive

♣ Low medium or high technology oriented (with corresponding labor skill requirements).

♣ Propriertary versus generic

b. Production Scheduling and Control: The approaches needed for managing production

Materials, labor, and other resources. These include:

♣ Long- or short term planning cycles

♣ What type of feedback is needed

♣ What resources are critical

♣ What must be planned

11 c. Equipment Maintenance: Approaches used for the maintenance and management of

Production equipment.This includes:

♣ Preventive maintenance versus repairs only when necessary

♣ The basis and record keeping used for such maintenance scheduling

♣ The use of sensors on the equipment for detecting tool wear or machine problems

♣ The uptime availability records of the equipment.

d. Vertical Integration: These are the decision processes for outsourcing decisions; make versus

buy decision parameters; and concerns absolute excessive supplier dependence.

e. Quality Control: These are the approaches to maintenance of high quality standard including.

♣ Purchased good quality assurance programs

♣ Inline and sampled parts inspection techniques

♣ Assumptions about rejects or reworks (Versus a zero-defects policy)

♣ Monitoring after-sales warranty costs and servicing problems.

♣ Monitoring cost-of- quality parameters

4. LOGISTICS AND MATERIAL CONTROL

a. Supplier Relationship: These are used for procurement of raw materials, purchased

components, and services, including:

♣ Lowest-bid shopping

♣ Involvement of suppliers in design and planning processes.

♣ Methods of design and ordering data interchange.

♣ The role of purchasing department and suppliers in quality control issues

b. Purchasing and Ordering Policies: These are the philosophies used to determine:

♣ Order quantities and timing

♣ Full materials requirements planning (NRP) systems versus just-in-time (JIT) approaches versus

optimum lot size computations.

♣ How inventory at various stages of the production process is accounted for and built into product

cost

12 c. In-Process Inventories: Approaches to handling goods-in-process, including:

♣ Straight-through processes (i.e, no. in-process inventory monitoring) versus internal buffer stock

between asynchronous production stages.

♣ Number of times goods are counted and put into controlled storage facilities during production

♣ Use of bar coding or other automated inventory control techniques

d. Finished Goods Storage: Finished goods storage considerations addresses:

♣ The use of direct factory to user shipment as opposed to warehousing

♣ Central versus regional versus local warehousing

♣ Accountability of goods by sales or distribution departments versus by the production

organization and effectiveness of integration of those functions

e. Inventory management System: The type and capabilities of the manufacturing planning and

control systems (MPCS) used for inventory management, master production scheduling, short-

range scheduling, production and quality reports, and cost data must be determined. The

organization must consider:

♣ MRP and manufacturing resource planning (MRPI) systems

♣ JIT systems

♣ Online systems or batch-oriented ones

♣ Integrated production monitoring systems or standalone system

f. Materials Handling Technologies: Materials handing devices or systems for labor, time or

space saving and material movement control including automated storage and retrieval systems

(ASRS), automated guided vehicles (AGVs), computer-controlled conveyor systems, and

material- robots.

g. Transportation Practices: Techniques used for minimizing the costs and maximizing the

service of both inbound and outbound goods. Decisions in this area cover.

♣ The use of own truck fleet versus commercial shippers.

♣ Break-bulk versus consolidated shipment techniques.

♣ Computer-based systems for optimizing transportation routings

13 5. HUMAN RESOURCES MANAGEMENT

a. Hiring Practices: Policies and procedures regarding new employees, including

♣ Entry-level educational requirements

♣ Initial orientation and training sessions

♣ Skill level and job grade structure.

♣ Affirmative action programs

♣ Interviewing and follow-up procedures

b. Training Programs: In-house or outside educational opportunities for technical skills,

management skills, and general education

c. Performance Evaluation: Policies to manage personnel career path and salary levels

♣ Job performance and salary review procedure.

♣ Employee counseling practices

♣ Rotation and reassignment practices

♣ Promotion and title requirements

♣ Pay raise criteria

♣ Special incentive systems

c. Management Style: General approach to managing labor relationships

♣ Dictatorial versus consensus building style

♣ Management by the numbers versus management by walking around

♣ Use of labor councils or staff advisory groups

6. ORGANIZATION AND MANAGEMENT SYSTEMS

a. Organization: Type and structure of the organization

♣ Whether it is hierarchical or matrix based.

♣ Where it is functional or project or product oriented.

♣ Span of control policies and practices

♣ Number of management layers

♣ Relative strength of solid-and dotted line responsibilities

♣ Networks with counterparts in other plants or division

14

b. Reporting Procedures: Policy on reporting procedures:

♣ Frequency of reports

♣ Level of detail required

♣ Use of actual numbers versus variances or percentages

♣ Use of graphics

♣ Automated versus manual methods

♣ Narrative explanations

c. Communications Effectiveness: Both top-down and bottom-up communications in terms of:

♣ Clarity of organizational objectives and strategies to all levels

♣ Receptiveness to feedback from lower levels

♣ Facilities and encouragement for suggestions and complaints

♣ Use of informal versus formal results assessments

d. Information Systems: Information systems in terms of:

♣ Level of automation; cost-effectiveness (i.e., capital investment represented and annual expenses

relative to revenues, compared to industry averages)

♣ Flexibility and user friendliness of systems development and operations capabilities

♣ Accuracy and timeliness of data processing operations

♣ Relevance of MIS systems to strategic business unit objectives

e. Decision-Making Processes: These include the use of a task force or committee action as

opposed to decisions beign made only by senior management and delegated responsibilities as

opposed to bureaucratic procedures.

15 2.3.2 EXTERNAL DIMENSIONS OF MANUFACTURING STRATEGY

The analysis of these external factors provides information on the opportunities and threats in the

cassava industry for use in strategy formulation. These factors are:

1. COMPETITIVE FACTORS

This category of external factors provides information on the competitive position and or trend as

they affect the manufacturing functions. This includes;

a. Strength and uniqueness of manufactured cassava products in the market

b. Scope of competitive rivalry and operation between cassava industries (local, regional, national

etc.)

c. Customer loyalty and satisfaction with products

d. Market share/size controlled by the industry’s products (whether dominant, tenable or weak)

e. Products distribution channel

f. Customer concentration

g. Varieties of products in the market

h. Products market growth rate/potentials

i. Ease of entry of new firms into the industry

j. Intensity of competition and rivalry among firms

k. Degree of products substitutability

l. Degree of dependence on complimentary or supporting products and services

2. EXTERNAL SUCCESS FACTORS

a. Labour availability

b. Availability and supply of raw materials

c. Access to cheap infrastructures like water, electricity, good roads etc that could aid

manufacturing

d. Dependence on particular raw material

16 2.4 MANUFACTURING STRATEGY FORMULATION PROCESS

The manufacturing strategy formulation process is in three stages14:-

1. strategic analysis

2. strategic choice and

3. strategic implimentation

This is illustrated in the strategy formulation model for this study shown below in figure 2.4

Figure 2.4: Model of Manufacturing strategy elements ( Adapted from Johnson and Scholes14 )

External Analysis Internal

Analysis

1 Strategic Analysis

Resources

Organization Structure

People and systems

3 ��

� � ��

2 Strategic Choice

Generation of options

Evaluation of options

Selection of strategy

Formulation of strategy itself

Often referred to as tactics

17

2.4.1 STEP 1: STRATEGIC ANALYSIS

The task of formulating a manufacturing strategy begins with a thorough analysis and evaluation of

the relevant internal and external factors with the sole aim of generating relevant data15. Fahley and

king16 and Aguila17 recommend the use of ‘‘environmental scanning technique’’ for this task. This

technique is accomplised by sourcing, evaluating and grading information on the relevant internal and

external factors using one or more of the following recommended sources:-Interviews, reports, personal

experience, conferences, questioneer, memoranda, meetings, employees, site visits, books,

journals,and litteratures. According to Guth18, it is also customary to summarise information gathered

from the internal environment as either strength or weakness, while that from the external environment

is usually summarised as opportunity or threat. This list of strengths, weaknesses, opportunities and

threats is known as SWOT Profile. [SWOT stands for strength, weaknesses, opportunities, and

Threats]. Table 2.1 lists key strategic areas to focus upon when summarizing the result of strategic

analysis into a SWOT profile.

Strength in this context refers to skills, expertise, resourses etc that may give the industry

advantage over its competitors. Weakness is something the manufacturing function of the industry

lacks or does poorly in comparison to others. It is also a condition that puts it at a disadvantage.

Opportunities are those things that offer important avenue for profitable growth of the manufacturing

functions. Threats stems from such factors as emergence of contending cheaper technologies, rivals

introduction of new or better products, entry of low cost foreign competitors products etc.

18 Table2.1: Important Considerations for SWOT Profile

Source: Thompson and Strictland15

INTERNAL ANALYSIS

STRENGTHS WEAKNESSES A distinctive competence No clear strategic direction

Adequate financial resources A deteriorating competitive position

Good competitive skills Obsolete facilities

Well thought of by buyers Sub par profitability

An acknowledged market leader Lack of managerial depth and talent

Well conceived functional area strategies Missing any key skills or competencies

Access to economies of scale Poor track record in implementing strategy

Insulated least somewhat from strong competitive pressures

Plagued with internal operating problems

Proprietary technology Vulnerable to competitive pressures

Cost advantages Falling behind in RxD

Competitive advantages Too narrow a product line

Product innovation abilities Weak market image

Proven management Competitive disadvantages

Others Below- average marketing skills

Unable to finance needed changes in strategy

others.

EXTERNAL ANALYSIS

OPPORTUNITIES THREATS

Enter new markets or segments Likely entry of new competitors

Add to product line Rising sales of substitute product

Diversify into related products Slower market growth

Add complementary products Adverse government policies

Vertical integration Growing competitive pressures

Ability to move to better strategic group Vulnerability to recession and Business cycle

Complacency among rival firms Growing Bargaining power of customers or suppliers

Foster market growth Changing buyer needs or tastes

Others Adverse demographic changes.

19 2.4.2 STEP 2 STRATEGIC CHOICE

This is the formal technique of generating, evaluating and selecting manufacturing strategies.

Figure2.4, segments this process into the following three (3) elements:-

1. Generation of options which involves identifying as many as possible of the potential course of

action

2. Evaluation of options and

3. Selecting the options, which may result in a single or strategy set that becomes the target for

strategic implimentation element of the process.

2.5 GENERATION OF OPTIONS

The variety of options or generic manufacturing strategies and the conditions under which they are

likely to be adopted are discussed below-

1. CONCENTRATION OR SPECIALIZATION STRATEGY

In this strategy, resources are utilized to pursue a single line of business, product, service and

purpose. This strategy is used when seeking to serve a particular target very well and gain a

competitive advantage through specialized knowledge and efficiency and to avoid the problems

involved in producing too many products. However, if the industry is shrinking or aggressive

competitors dominate the market, a concentrated cassava industry may be wiped out since it may have

no other line of business to fall back upon.

2. INNOVATION STRATEGY

In this strategy, new product or process change that fundamentally changes the industry’s methods

of doing business is introduced to gain certain advantages. Thus, if the cassava industry is vulnerable to

obsolescence, it may look for new ideas/products whose time has arrived.

3. GROWTH STRATEGIES

Growth strategies are usually pursued by means of vertical integration, horizontal integration,

diversification, mergers, and joint ventures.

20 (a) Vertical Integration

This growth strategy involves the acquisition of manufacturing functions of other

industries/organizations in the channels of distribution of the cassava industry. In backward vertical

integration, suppliers are acquired to ensure steady flow of raw materials while in forward vertical

integration, outlets for products or services are acquired to reach towards the ultimate users of products

for improved profit.

(b) Horizontal Integration

This strategy involves growth through the acquisition of the manufacturing functions of firms in the

same line of business. It is adopted in an effort to increase the size, sales, profits, and potential market

share.

(c) Diversification

This growth strategy takes the manufacturing function away from both existing products and

market by moving into new and profitable areas that may result in greater growth than would be

possible without diversification.

(d) Mergers and Joint Ventures

In a merger, the manufacturing functon of the cassava industry joins with other companies to form

a new one while in a joint venture, it only works with another company on a project too large for it to

handle by itself.

4. STABILITY, DO NOTHING, CONSOLIDATION OR NO CHANGE STRATEGY

Instead of innovation or expansion, the manufacturing function of the cassava industry may

continue to follow the tried and proven path, utilizing existing products and services, and letting others

make possible mistakes in innovation. This is a useful strategy where further growth is too costly and

may have detrimental effect on profitability. A cassava industry whose manufacturing function is in a

no growth or low growth situation may be forced to adopt a stability strategy.

5. INTERNATIONAL STRATEGY

This strategy involves repeating the approach that was successful in a home country and extending

its operation from there to different parts of the world. Multinational companies like Unliver, Nestle,

IBM

21

and so on practice this strategy. However, it might not be applicable to the cassava industry in Nigeria

that is predominantly rural in nature with entrepreneurial orientation.

6. RETRENCHMENT STRATEGIES

When the survival of a cassava industry’s manufacturing function is threatened and it is not

competing effectively, retrenchment strategies are often needed. The three basic types of retrenchment

strategies are liquidation, divestment, and turnaround

(a) Liquidation:

This strategy applies when the manufacturing function is terminated and its assets sold off.

(b) Divestment

This strategy involves selling the cassava Industry’s business or setting it up as a separate corporation.

(c) Turnaround

This strategy is needed to recover from forced liquidation (Bankruptcy). It usually involves getting

rid of unprofitable products, pruning the work force, trimming the distribution outlets and seeking other

methods of making the manufacturing function more efficient. It is the most complex strategy to pursue

2.6 EVALUATING THE STRATEGIC OPTIONS

The generic strategies discussed above provide an overview of possible approaches to manufacturing

strategy. In reality, these strategies are often used in combinations, thus making the Job of evaluating

and choosing of manufacturing strategies a very difficult task. Various approaches have been in use

over the years. For example, The Boston Consulting Group (BCG) developed the “Business portfolio

matrix”, which essentially shows the linkages between business growth and the relative competitive

position of the enterprises as identified by the market share. However, this approach was criticized by

Day19 as being to simplistic since it offers only general strategy recommendation without specifying

how such strategies could be implemented. Another useful matrix developed to overcome some of the

problems inherent in the business portfolio matrix is the General Electric (G.E) Business Screen,

which according to Hofer and Schendel20 also suffers some of the same limitations as business portfolio

matrix. For example, it does not solve the problem of determining appropriate product market nor offer

anything more than general strategy recommendations.

22 According to Weihrich12 the “SWOT Matrix” Technique that is applied for this study in which “S”

stands for strength “W” for weakness “O” for opportunities and “T” for threats, has a wider scope and

was introduced because of its systematic analysis. It is also most useful when a very limited amount of

time is available to address a complex strategic situation21. This approach balances the internal strengths

and weaknesses of the manufacturing function with the opportunities and threats that the external

environment presents. It suggests that the major strategic issues can be isolated through careful analysis

of each of these four elements and strategies based on them can then be formulated to address these

issues.

Source: Weihrich, Heinz12

Figure 2.5 Operational Activities Leading to SWOT Matrix Analysis

2.7 THE SWOT MATRIX: A CONCEPTUAL MODEL

Figure2.5 shows the more specific operational activities leading to the application of SWOT matrix

technique, while figure 2.6 shows the process of formulating a manufacturing strategy as encompassed

in the SWOT matrix technique. The SWOT matrix technique of strategy formulation as shown in

STRATEGIC ANALYSIS

INTERNAL ANALYSIS EXTERNAL ANALYSIS

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

SWOT PROFILE

SWOT MATRIX ANALYSIS

EVALUATION AND STRATEGIC CHOICE

23 figure2.6 indicates four conceptually distinct segments of alternative strategies represented by SO, ST,

WO, and WT. These strategic segments which overlap each other, may be pursued concurrently

and in concert. The focus therefore is always on the interaction of the four sets of variables

(strength, weaknesses, opportunities, threats) and the various strategies for each segment as

indicated. The lists of strength, weaknesses, opportunities, and threats are usually derived from

information generated during strategic analysis.

INTERNAL FACTORS

EXTERNAL FACTORS

List of internal strength (s)

(1)

.

.

.

List of internal weaknesses (w)

(1)

.

.

.

List of External Opportunities (O)

(1)

.

.

.

SO: Maxi-maxi

STRATEGY SEGMENT I

WO: Mini-Maxi

STRATEGY SEGMENT 3

List of External threats (T)

(1)

.

.

.

ST: Maxi-Mini

STRATEGY SEGMENT 2

WT: Mini-Mini

STRATEGY SEGMENT 4

Source: http://www.bnet.com/ Swot analysis21

Figure 2.6 Strategies Indicated by the SWOT Matrix Analysis.

24

(1) The SO strategy (Maxi-Maxi)

In this segment, the manufacturing function is playing from its strength, utilizing resources to take

advantage of opportunities and hence the objectives are generally to reduce internal weaknesses and

overcome external threats.

(2) The ST Strategy (Maxi-Mini)

The strategy in this segment is based on the strength of the manufacturing function that can deal

with threats in the external environment. The aim is to use the strength in order to deflect the threats.

The strength must however be used with great restrain and discretion by preferring actions that

circumvent the threats.22

(3) The WO Strategy (Mini-Maxi)

The strategy appropriate for this segment is the one that attempts to minimize the weaknesses and

to maximize the opportunities. The manufacturing function may identify opportunities in the external

environment but requires strength where it currently has a weakness that prevents it from taking

advantage of such opportunities. Without a strategic action to remove this weakness, the opportunities

may go to competitors which explains why Rowe et al22 calls this segment search.

(4) The WT Strategy (Mini-Mini)

The aim of the WT strategy is to reduce or minimize both weaknesses and threats. A manufacturing

function faced with external threats and internal weaknesses may be in a precarious situation that may

lead to liquidation and should adopt suitable manufcturing strategies such as retrenchment to avoid it.

Conclusively, evaluation of strategic options and subsequent selection of strategies using the

SWOT matrix techniques is usually conducted based on the relationship between the generic strategies

discussed and the swot matrix technique as illustrated in table2.2. Additionally, figure 2.7 guides in

establishing the association between common manufacturing weaknesses and the relevant strategy

dimensions23.

25 Table 2.2: Relationship Between Generic Strategies And The SWOT Matrix Technique

STRENGTHS WEAKNESSES

1. 2. 3. 4. 5.

1. 2. 3. 4. 5.

OPPORTUNITIES

SO STRATEGIES

WO STRATEGIES

1.

1. EXPAND GLOBALLY

1. JOINT VENTURE

2. 2. DOUBLE SALESPERSONS 2. ACQUIRE COMPETITOR 3. 3. DOUBLE ADVERTISING 3. EXPAND NATIONALLY 4. 4. DEVELOP NEW PRODUCTS 4.BACKWARD INTEGRATION 5. 5. DIVERSIFY 5. FORWARD INTEGRATION

THREATS

ST STRATEGIES

WT STRATEGIES

1.

1. DIVERSIFY

1. LIQUIDATION

2. 2. ACQUIRE COMPETITOR 2. DIVESTITURE 3. 3. EXPAND LOCALLY 3. RETRENCHMENT 4. 4. INCREASE PROMOTION 4. RESTRUCTURE 5. 5. RE-ENGINEER 5. DOWNSIZE

(Source:http//home.ubalt.edu/ntsbmilb/step5.html)24

Figure2.7 Associating Weaknesses with Relevant Strategy Dimensions

WEAKNESSES

STRATEGY DIMENSIONS

Poor Quality Product Concept Design And Development

Late To Market With New Features Manufacturing Plants and Facilities

Insufficient Product Range Manufacturing Technologies and Practices

High Inventory Levels Logistics And Material Control

Poor Project Control Human Resources Management

Inflexible Equipment

Organization And Management System Source: Dilworth, J. B11

26 2.8 RELATED EMPIRICAL STUDIES Anowai25, Ezeifidi26, and Akwaji27 carried out some studies on the cassava industry. However,

none of these studies is directly related to the context of this study, which is on formulation of

manufacturing strategies for the cassava industry. This therefore creates a necessary gap that this study

intends to fill.

Anowai25 was motivated by the need to replace existing traditional art of making Garri in small

quantities with a modern technology for production at high capacity to carry out a study on the

“Economic viability of manufacturing Garri processing machines.” According to the study, the lack of

economically viable and developed indigenous industries such as the cassava industry is among the

critical factors hampering the establishment of the required technological base for Nigeria’s industrial

development and thus her continuous dependence on foreign industrial entrepreneurs to plan and run

even her small industrial projects at a very high cost to the economy. Consequently, he recommended

an urgent reappraisal and for government to formulate favourable strategies and policies to promote and

encourage indigenous industries such as the cassava industry.

Ezeifidi26 in his contribution to the development of the rural cassava industry carried out a

“Production design of a cassava starch mill.” The design according to the study was based on an

informed selection of machines and equipment built from available materials to suit the needs of the

rural cassava industries as well as other criteria such as affordability of technology, cost, ease of

operation and maintenance by the local populace for which the mill is intended.

Akwaji27 carried out a study to identify the work-skill modules required by secondary school

graduates for success in cassava processing enterprises in Cross Rivers state. For the study, he used four

sets of questionnaires to collect data from forty-two teachers of Agriculture as well as from cassava

processors in four different groups of Fifty-four, Thirty, Thirty-three and Thirty six.

Findings from analyzing the data indicated the various work skill items that were required in processing

various types of cassava products in the cassava industry.

Consequently, he recommended that the identified work skill items be packaged and integrated into a

skill acquisition training programs for preparing and training youths for success in cassava processing

enterprise or industries.

27 2.9 SUMMARY OF LITERATURE REVIEW

The reviewed literature provided an overview of the manufacturing functions of the cassava

industry; its products, machines, equipment and the production processes applied which are mostly

mechanical in nature and thus the consequent need to formulate suitable manufacturing strategies for the

industry. The review explained manufacturing processes, defined manufacturing strategy and

deliberated on its underlying concepts. The origin of manufacturing strategy was traced to Skinner's

“Harvard Business Review” article, which he suggested a top-down approach to manufacturing and

advocated that manufacturing objectives be derived then manufacturing strategies/policies developed to

address these objectives. Major factors otherwise called dimensions of manufacturing that are usually

considered and analysed when formulating manufacturing strategy were identified and classified into

external and internal factors. The internal factors identified in the review were: 1.Product concept,

design and development, 2. Manufacturing plants and facilities, 3. Manufacturing technologies and

practices, 4.Logistics and material control, 5.Human resources management, 6.Organization and

management systems. The external factors identified were 1.Competitive components, and 2.Other

success factors.

The three major Steps involved in the formulation of a manufacturing strategy were mentioned as

strategic analysis, strategic choice and strategic implementation. The relevance of the SWOT matrix

technique in analyzing and selecting the relevant manufacturing strategies from available generic

options discussed in the review was also emphasized.

The review of previous empirical studies indicated that Anowai25, Ezeifidi26 and Akwaji27 did some

work on the cassava industry, but none of the study was on the formulation of a manufacturing strategy.

Admittedly, the reviewed literature provided good insight to the subject matter under study, and this

study derived much from the reviewed literature. However, the “manufacturing strategy formulation’’

perspective on the cassava industry was completely missing from the reviewed literatures and therefore

further highlights the need to carry out this study.

28

CHAPTER THREE

METHODOLOGY AND STRATEGIC ANALYSIS

3.1 METHODOLOGY The methodology for this study is derived from the strategy formulation model advocated by

Johnson and Scholes14, which segments strategy making process into three interacting elements of (1)

Strategic analysis, (2) Strategic choice and (3) Strategic implementation, as shown in figure 3.1

This model is chosen because of its convenience, popularity and application by many authors, for

example (Des and Miller)28 and (Rowe, Mason, Dickel, Man and Mockler)22, and so has been met in

much of the literatures used for this study. Another reason for adopting this model is that it allows the

manufacturing strategy formulation process to be organized systematically without loosing sight of the

interactive nature of the strategic elements28.

Adapted from Johnson and Scholes14

Figure 3.1 Model of Manufacturing Strategy Formulation Elements

External Analysis Internal

Analysis

1 Strategic Analysis

Resources

Organization Structure

People and systems

3 Strategic

Implementation

2 Strategic Choice

Generation of options

Evaluation of options

Selection of strategy

Formulation of strategy itself

Often referred to as tactics

29

3.2 SCOPE OF THE STUDY

Based on the model, the study will specifically:

1. Perform a strategic analysis on the manufacturing function of the cassava industry using

“environmental scanning technique” so as to have a better understanding of it’s internal and

external operating conditions, problems, trends, short and long term opportunities, threats, current

and evolving competitive advantages and disadvantages, current and evolving performance

potentials, processes, behaviour and so on.

2. Determine and formulate appropriate manufacturing strategies for the cassava industry based on

information generated in step 1. above.

3.3 DATA AND INFORMATION SOURCES FOR THE STUDY

One or more of the following sources and methods of gathering information and data for

strategy formulation purposes is recommended17; Journals, Reports, Books, Personal experience,

Conferences, Committees, Memoranda, Meetings, Interview of colleagues, board members, employees,

friends and so on. Consequently, this study used a multi-method approach thus:

a. Documents and Qualitative analysis reports ( expert views, trend analyses, background reports,

averages, etc )

b. Site visits, observations, and structured interviews on selected cassava industries in Akwa Ibom

State. In addition, a cassava processing industry owned and managed by the National Root

Crops Research Institute, (NACRI), Umudike, Abia State was used as a benchmark on issues

and factors considered relevant in formulating a manufacturing Strategy.

Harbour Peters30 recommends these methods especially when subjects may not be able to read and

write properly as is the case in this study. The methods also has the following additional advantages31.

1. Enables information to be collected in their natural setting (first hand information)

2. Enables the collection of in-depth information

3. Enables the researcher to ask pertinent questions that were not remembered before the interview

as a result of the release of some hidden facts by the respondent

30 4. The interviewer and the interviewee can seek for more clarification on issues as the interview

progresses.

5. The researcher may use the words spoken directly from the respondents, which may be

considered more appropriate.

6. There is freedom to schedule and conduct the interview in a way that suits both parties.

3.4 AREA OF STUDY The area of study is Akwa Ibom state. Its choice is based on its status as a major cassava producing

state in the country. The cassava industries used for the study were selected based on the industry status

accorded them by “International Institute for Tropical Agriculture (IITA)2” as well as “Raw Materials

Research and Development Council4 (RMRDC), who are authorities on cassava industry.

31 3.5 STRATEGIC ANALYSIS RESULT

Details of the strategic analysis conducted on selected industries using “environmental scanning

technique” is provided in appendix II. The result from the analysis in appendix II is presented below in

a standard format wherein pertinent facts, relevant concepts and other considerations earlier discussed

are pulled together in a systematic fashion.

Table 3.1 STRATEGIC ANALYSIS OF THE CASSAVA INDUSTRY

1. PRODUCT CONCEPT DESIGN AND DEVELOPMENT a.) PRODUCTS ( R & D )PRACTICES 0% Weak Neutral (50) Strong 100% 1. Reseach and development expertise and capability �

2. New product development and new product renewal planning practices �

3. Application of advanced engineering technique in product design and development �

4. Use of project management approach in product design �

5. Investment in new product development �


b.) PLANT FACILITY 0% Weak Neutral (50) Strong 100% 1. Use of multi-plants for production �

2. Plant capacity utilization (Time based)

�

3. Age and physical condition of plants and facilities

�

4. Sophistication of plants and equipment �

5. Potentials for modernization of plant and facilities

�

6. potentials for expansion of plant facilities

�

7. Proximity of plant to public power source

�

8. Availability of public power for plant use

� 9. Availability of labour for plant use

�

10. Availability of Raw materials

�

c.) PLANT PRODUCTION PHILOSOPY 0% Weak Neutral (50) Strong 100% 1. Dedication of plant to produce particular

products �

2. Range and variability of other products that could be produced

� 3. Ease of adaptation of plants to

manufacture other products �

4. Application of continous production method

�

5. Volume of product output �

6. Production process innovation capability � 7. Rate of innovation in industry

�

8. Production effectivenss and delivery schedule

�

9. Production capacity planning

�

32 d.) PLANT LAYOUT 0% Weak Neutral (50) Strong 100% 1. Plant facility layout design �

2. Provision for material handling in plant layout �

3. Plant layout innovation capability �


e.) PROCESS TECHNOLOGIES 0% Weak Neutral (50) Strong 100% 1. Intensity of labour to produce to product �

2. Technical and manufacturing skills possesed

�

3. Level of technology applied in production

�

4. Mastery of special technology �

5. Access to modern/latest available cassava manufacturing technologies

�

6. Intensity of capital requirement to produce products

�

7. Patented or proprietary nature of product/process

�

8. Possesion of patents/trademarks

�

9. Strength of patent if any �

10. Application of production planning and control

�

11. Level of value added to product �

f.) QUALITY CONTROL 0% Weak Neutral (50) Strong 100% 1. Purchased goods quality assurance program �

2. Inline and sampled quality control techniques �

3. Products quality �

4. Aftersales warranty and services �

g.) MAINTENANCE 0% Weak Neutral (50) Strong 100% 1. Practice of maintenance principles

�

2. Uptime availability records of equipment �

3. General maintenance documentations �

4. Maintenance scheduling based on documentations �

4. LOGISTICS AND MATERIAL CONTROL h.) SUPPLIER RELATIONSHIP 0% Weak Neutral (50) Strong 100% 1. Involvement of suppliers in planning process �

2. Incorporation of purchasing department and supplier in quality control issues �

3. Practice of lowest bid shopping �

33 i.) PURCHASING AND ORDERING POLICIES 0% Weak Neutral (50) Strong 100% 1. Economic order quantities and timming �

2. Full materials requirement planning �

3. Routine inventory auditing �

4. Practice of in process inventories �

5. Provision for finished goods storage �

6. Application of material handling technologies

�

7. use of own truck fleet to transport goods �

8. Computation of transportation routings �

5. HUMAN RESOURCE MANAGEMENT

j.) HIRING PRACTICES 0% Weak Neutral (50) Strong 100% 1. Entry level educational requirement �

2. Initial orientation and training session

�

3. Skill level and job grade structure �

4. Interview and follow up procedures �

5. Ability to attract and retain highly creative people

�

6. Inhouse or outside educational opportunities for employees

�

7. Performance appraisal and incentive system

�

k.) PERFOMANCE EVALUATION 0% Weak Neutral (50) Strong 100%

1. Job performance and salary review procedure

�

2. Employee counselling practices �

3. Rotation and reassignment practices � 4. Pay raise criteria �

5. Special incentive system �

6. ORGANIZATIONAL AND MANAGEMENT SYSTEM

l.) GENERAL ADMINISTRATION 0% Weak Neutral (50) Strong 100% 1. Entrepreneurial orientation � 2. Existence of organizational structure �

3. Strength of solid and dotted line responsibilities

�

4. Flexibility of organizational structure �

5. Number of management layers �

6. Networks with counterparts in other plants or division

�

7. Level of cordination and intergration �

8. Management communication and control network

�

9. Use of labour council and staff advisory groups

�

10.Receptiveness to feedback, suggestions and complaints from lower level

�

11. Effectiveness of decision making process �

12. Detailed reporting procedures �

34 7. EXTERNAL ENVIRONMENT

m.) COMPETITIVE COMPONENT 0% Weak Neutral (50) Strong 100% 1. Strength and uniqueness of products in

the market �

2. Scope of competitive rivalry between cassava industries (local, regional, national etc.)

�

3. Customer loyalty and satisfaction with cassava industry’s product

�

5. Relative level of technology used by foreign based competitors

� 6. Importation of high quality cassava

products into the market �

6. Market share/size controlled by products (whether dominant, tenable, weak)

�

7. Products distribution channels � 8. Customer concentration �

9. Range/varieties of cassava products in the market

�

10. Products market growth rate/potentials �

11. Advantage taken of market growth potentials

�

12. Ease of entry of new firms into the cassava industry’s business

�

13. Intensity of competition and rivalry among cassava firms

�

14. Degree of cassava products substitutability

�

15. Degree of dependence on complimentary or supporting products and services

�

n.) EXTERNAL SUCCESS FACTORS 0% Weak Neutral (50) Strong 100%

1. Labour availability constraints on manufacturing activity

�

2. Raw materials supply constraints on manufacturing activity

�

3. Dependence on particular raw material � 4. Access to cheap public infrastructure eg

water, electricity, etc that could aid manufacturing

�

3.6 SUMMARIZING STRATEGIC ANALYSIS RESULT INTO A SWOT PROFILE

Much of the information generated during strategic analysis is not relevant in formulating

manufacturing strategy. The standard practice is to filter, and reduce the information to a manageable

quantity of summarized key strategic issues32. This is usually done using grids of four columns one each

for strengths, weaknesses, opportunities and threats and then to list the relevant factors beneath the

appropriate headings21. The analyzed internal factors usually constitute the list of strength or

weaknesses while the external factors are usually summarized as opportunities or threats. Such list of

strength, weaknesses, opportunities, and threats is known as a SWOT Profile. [SWOT stands for

35 strength, weaknesses, opportunities, and Threats]. Table 3.3 list several strategic key areas to focus

upon when summarizing the result of strategic analysis into a SWOT profile.

Table3.2 Important Considerations For SWOT Profile

INTERNAL ANALYSIS

STRENGTHS WEAKNESSES A distinctive competence No clear strategic direction

Adequate financial resources A deteriorating competitive position

Good competitive skills Obsolete facilities

Well thought of by buyers Sub par profitability

An acknowledged market leader Lack of managerial depth and talent

Well conceived functional area strategies

Missing any key skills or competencies

Access to economies of scale Poor track record in implementing strategy

Insulated least somewhat from strong competitive pressures

Plagued with internal operating problems

Proprietary technology Vulnerable to competitive pressures

Cost advantages Falling behind in RxD

Competitive advantages Too narrow a product line

Product innovation abilities Weak market image

Proven management Competitive disadvantages

Others Below- average marketing skills

Unable to finance needed changes in strategy

others.

EXTERNAL ANALYSIS

OPPORTUNITIES THREATS

Enter new markets or segments Likely entry of new competitors

Add to product line Rising sales of substitute product

Diversify into related products Slower market growth

Add complementary products Adverse government policies

Vertical integration Growing competitive pressures

Ability to move to better strategic group Vulnerability to recession and Business cycle

Complacency among rival firms Growing Bargaining power of customers or suppliers

Foster market growth Changing buyer needs or tastes

Others Adverse demographic changes Source: Thompson and Strictland15

36 3.61 IDENTIFYING STRENGTHS , WEAKNESSES, OPPORTUNITIES AND THREATS FROM

STRATEGIC ANALYSIS

Strength is something the manufacturing function is very good at doing or a characteristic that

gives it an important capability. It can be a skill, important expertise, a valuable organizational resource

or competitive ability or an achievement that put the cassava industry in a position of advantage like

having a better product, stronger name recognition, superior technology or better customer service.

Strength can also result from alliances or corporative venture with a partner having expertise or

capabilities that enhance the cassava industry’s competitiveness.

Weakness on the other hand is something the manufacturing function lacks or does poorly in

comparison to others. it is also a condition that put it at a disadvantage.

Opportunities are those things that offer important avenues for profitable growth, those where it

has the most potentials for competitive advantage and those which it has the resources to pursue.

Threats on the other hand stems from such factors as emergence of cheaper technologies, Rivals

introduction of new or better products, the entry of low cost foreign competitors into the cassava

industry market strongholds and new regulations that are burdensome to the cassava industry.

37 3.7 SWOT PROFILE FOR THE CASSAVA INDUSTRY

The SWOT profile for the cassava industry based on table 3.1 and table3.2 is presented below in

table 3.3

TABLE 3.3 SWOT PROFILE FOR THE CASSAVA INDUSTRY

STRENGTHS INDICATORS ON THE STRATEGIC

ANALYSIS RESULT (TABLE3.1)

1. Abundance of primary raw material (cassava)

b10

2. Industrial expansion,modernisation and growth potentials

b5, b6, b7

3. Availability of manpower (labourers) for production

b9

4. Wide range of products with innovation capabilities

c2, c3

WEAKNESSES 1. Irregular supply of raw material i1, i2, h1, n2

2. Low capacity utilization b2, c4, c5, c8, c9

3. Non standardised low quality products a2, a3, f1, f2, f3, f4

4. Poor plant facility layout d1, d2

5. Poor product research and development (R&D) capability

a1, a2, a3, a4, a5

6. Use of low level manufacturing technology / machinery

b4, c4, c5, c8, c9, e1, e3, e4, e5,e10

7. Below average managerial / manufacturing / engineering skills

a1, a2, a3, a4, a5, d1, d2, e3, e4, e10, e11, f1, f2, f3, g1, g2, g3, g4, i1, i2, i3, i4, i5, i6, i7, i8, i9, i10, i11, i12

8. Inadequate public power (electricity) availability

b8

OPPORTUNITIES 1. Favourable and highly demanded

products with high market share m1, m3, m6, m7, m8, m10

2. Ability to expand product lines to meet broader range of customer needs

m9

3. Insulated from strong competitive pressures

m2

THREATS

1. Use of improved technology by foreign based competitors.

M4

2. Rising sales of cassava products substitutes (corn starch, millet, etc.)

M14

3. Importation of high quality cassava products into the market

M5

38

CHAPTER FOUR

SELECTION OF MANUFACTURING STRATEGIES

The SWOT matrix technique used in selecting manufacturing strategies from generic strategies is shown in table 4.1. It provides a good framework for identifying strategic relationships, which in turn becomes the basis for strategic choice and selection. For proper analyse and identification strategies, a “+” sign is used to indicate a match between the factors while an “O” indicates a weak or none existent relationship. Each of the four indicated strategic segments (SO, ST, WO, and WT) in table 4.1, have been carefully analyzed in detail and evaluated independently in appendix III. The explanations that follow below for each strategic segments and the resulting strategies presented in table 4.2 are based on the detailed analysis carried out in appendix III. TABLE 4.1: INTERACTION MATRIXES OF STRATEGIC FACTORS

STRENGTH (S) WEAKNESSES (W) INTERNAL FACTORS

EXTERNAL FACTORS

(S1) (S2) (S3) (S4)

Abundance of primary raw material (cassava) Industrial expansion, modernisation and growth potentials Availability of manpower (labourers) for production Wide range of products with innovation capabilities

(W1)

(W2)

(W3)

(W4)

(W5)

W6)

(W7)

(W8)

Irregular supply of raw material

Low capacity utilization

Non standardised low quality products

Poor plant facility layout

Poor product research and development (R&D) capability

Use of low level manufacturing technology / machineries

Below average managerial / manufacturing / engineering skills

Inadequate public power (electricity) availability

OPPORTUNITIES (O) S1 S2 S3 S4 W1 W2 W3 W4 W5 W6 W7 W8

(O1)

Favourable and highly demanded products with high market share

O1 + + 0 + O1 + + + 0 0 + 0 0

(O2)

Ability to expand product lines to meet broader range of customer needs

O2 + + 0 + O2 + 0 + + + + + +

(O3) Insulated from strong competitive pressures

O3 0 0 0 + O3 0 0 0 0 0 0 0 0

THREATS (T)

S1 S2 S3 S4 W1 W2 W3 W4 W5 W6 W7 W8

(T1)

Use of improved technology by foreign based competitors.

T1 0 + 0 0 T1 0 0 + + 0 + 0 0

(T2)

Rising sales of cassava products substitutes (corn starch, millet, etc.)

T2 0 + 0 + T2 0 0 0 0 0 0 0 0

(T3) Importation of high quality cassava products into the market

T3 0 + 0 0 T3 0 0 + 0 0 0 0 0

39 4.1 STRATEGIES FOR THE STRENGTH AND OPPORTUNITIES (SO) SEGMENT

Successful manufacturing strategies build on the firm’s strength, to take advantage of opportunities.

The cassava industry is no exception. The strength of the cassava industry based on the SWOT profile

lies in such areas as abundance of primary raw material (cassava), industrial expansion, modernisation

and growth potentials, availability of manpower (labourers) for production, and wide range of products

with innovation capabilities. As indicated in the detailed analysis of this strategic segment in appendix

II, the suitable strategies for this segment would be to increase the scale of production in order to take

advantage of economics of scale for higher profitability. Based on appendix II, these should be

actualized by:

1. Increasing the volume of manufactured products viz a viz production capacity significantly than is presently obtainable. S1(O1), S1(O2)

2. Expanding production facilities with modern machineries. S2(O1)

3. Investing in new innovative cassava products. S2(O2), S4(O1), S4(O2), S4(O3)

These strategies will thus utilize the listed strengths to take advantage of such opportunities as

favourable and highly demanded products with high market share, ability to expand product lines to

meet broader range of customer needs and insulated from strong competitive pressures

4.2 STRATEGIES FOR STRENGTH AND THREAT (ST) SEGMENT

Major threats based on figure4.2 are importation of high quality cassava producst into the market as

against the prevailing low quality products, and rising sales of cassava substitutes such as corn, millet

etc. These threats coupled with the improved manufacturing technologies used by foreign based

industries, when compared to ours implies that imported products will gradually gain preferential

acceptance because of their high quality and eventually dominate the market to the detriment of the

Nigeria cassava industry. To reduce this threat, the analysis in appendix II suggests the following

strategies.

1. Expand manufacturing facilities with modern machineries/technologies. S2(T1), S2(T2), S2(T3)

2. Manufacture new and innovative products to disuade rising sales of substitutes such as corn,

millet, etc. S4(T2)

40 4.3 STRATEGIES FOR WEAKNESS AND OPPORTUNITIES (WO) SEGMENT

Irregular supply of raw primary material, Low capacity utilization, Non standardised low quality

products, Poor plant facility layout, Poor product research and development (R&D) capability, Use of

low level manufacturing technology / machineries, Below average managerial / manufacturing /

engineering skills, and Poor public power (electricity) availability are the weaknesses that prevent the

cassava industry from taking advantage of available opportunities. Consequently the under listed

strategies derived from the analysis of this segment in appendix III would minimize these weaknesses

and utilise the opportunities listed in figure 4.2 .

1. Cassava industries should own cassava farms and encourage cassava cultivation through

supports and sponsorship of farmers to improve and stabilise their raw materials supplies.

W1(O1), W1(O2)

2. Provide funding/loan facilities to cassava industries with less stringent measures. W2(O1),

W6(O2)

3. Relevant government agencies such as NAFDAC, SON, etc should specify quality standards for

cassava products and subsequently enforce it so that the industries will be compelled to improve

upon their internal quality control measures. W3(O1), W3(O2)

4. Incorporate relevant ministries, such as Agriculture, Industries etc to regulate and assist in

simple plant layout design of prospective cassava industries. W4(O2)

5. Organise routine training workshops, seminars, etc to cater for cassva industries research

development (R&D) needs and also upgrade their manufacturing/managerial skills. W5(O2),

W7O2

6. Affiliate cassava industries to research based institutions such as universities etc to provide them

with routine avenue for consultation, guidance and counselling. W5(O2)

7. Import and replicate modern cassava manufacturing technologies and machineries for local use.

W6(O1)

8. Routinely enlighten cassava industries on available modern cassava manufacturing technologies

and machineries. W6(O1)

9. Site cassava industries where there is improved public power supply and subsidise the cost of

the poer supply to cassava industries. W8(O2)

41 4.4 STRATEGIES FOR WEAKNESS AND THREAT (WT) SEGMENT

Threats to the cassava industry mostly bother on the fact that foreign-based cassava

industries use modern and improved manufacturing technology, rising sales of cassava products

substitutes (corn starch, millet, etc.) and importation of high quality cassava products. The most

appropriate strategy based on the analysis in appendix III is for government to


W3(T1), W4(T1), W6(T1)


and machineries. W3(T1), W4(T1), W6(T1)

3. Assist cassava industries to acquire modern cassava manufacturing technologies and

machineries through adequate funding, loan and financing. W3(T1), W4(T1), W6(T1)



upon their internal quality control measures. W3(T3)


simple plant layout design of prospective cassava industries. W4(T1)

42 TABLE4.2: SELECTED STRATEGIES FROM THE INTERACTION MATRIX

INTERNAL FACTORS

EXTERNAL FACTORS

STRENGTH (S)

��

� ��

��!��"� ��

��

WEAKNESSES (W)

�"��

�"��# ��$ ��

�" ��% �� & ��

�"!��' ��

��(��' �� ) * + ��

�",��- � �� .��

�"/��0 �� .�� .� � � �� 1 ��

�"2�� & ��

OPPORTUNITIES (O�

�

�3��4 �� 1 ��

�3��

�� 3 ��

SO: Strategies

�5 �� $ ��$ �� 5��3��3��

�5 6 � �� 5��3��

� 5 �� 5��3��!�3��!�3��!�3 ��

WO: Strategies

�5 7�� 5�"��3��"��3��

�5 �' �� .�� 5�"��3��",�3��

5 ) � �� % �4 + �7��3% �� & �� & �� 5�" �3��" �3��

!5 �� 5�"!�3��

(5 3�� 1 �� ) * + �� .�� 1 ��5�"(�3��"/3��

,5 �� 5�"(�3��

/5 �� 5�",�3��

25 ) �� 5�",�3��

85 �� 5�"2�3��

�

THREATS (T)

�9�� - � � �� :�� 5��

��9�� ) ��

�� 5��9 �� & ��

�� 1 ��

ST Strategies

�5 6 � �� .� �� 5��9��9��9 ��

�5 ;�� 5��!�9��

�

WT: Strategies

1. �� 5�" �9��"!�9��",�9��

2. ) �� 5�" �9��"!�9��",�9��

3. �� & �� & �� 5�" �9��"!�9��",�9��

4. ) � �� % �4 + �7��3% �� & �� & �� 5�" �9 ��

5. �� 5�"!�9��

43 CHAPTER FIVE

RESULT, CONCLUSION AND RECOMMENDATIONS

5.1 RESULT

Based on the analysis carried out in appendix III and the resulting strategies listed in the four

strategic segments of table 4.2, this study has sucessfully formulated manufacturing strategies for the

cassava industry in Nigeria using the SWOT matrix technique. These strategies as collated from

table 4.2 and rearranged logically in table5.1 make up a strategy set for the implementation process and

constitute the result of this study. These twelve strategies if properly implemented will enable the

manufacturing functions of the cassava industry to achieve its objectives and by implication transform

the industry into a viable sector in the nation.

TABLE5.1: COLLATION OF FORMULATED STRATEGIES

SWOT SEGMENT

S/N

MANUFACTURING STRATEGIES

ORIGINATING RELATIONSHIPS

(see appendix iii/ figure 4.2)

SO

ST

WO

WT

1 �� 5

�

"2�3��

2 �� 5�

�

"!�3��"!�9��

3 ) �� 5�

�",�3��" �9��"!�9��",�9��

� �

4 �� 5�

",�3��" �9��"!�9��",�9��

� �

5 �� & �� & �� 5�

"��3��",�3��" �9��"!�9��",�9��

� �

6 7�� 5�

"��3��"��3��

�

7 �� $ ��$ �� 5�

��3��3��

�

8 �� 5�

��3��!�3��!�3��!�3 ��!�9��

9 6 � �� .� �� 5�

��3��9��9��9 ��

� �

10 ) � �� % �4 + �7��3% �� & �� & �� 5�

" �3��" �3��

�

11 3�� 1 �� ) * + �� .�� 1 ��5�

"(�3��"/3��

�

12 �� 5��

"(�3� �

44 I wish to draw attention to the fact that of the twelve formulated strategies, only five of them are to

be implemented by the cassava industries while the rest are by the government. The four to be

implemented by the cassava industries are strategies number 1, 6, 7, 8 and 9, which bothers on where to

site the industry, cultivation of own cassava farms to improve and stabilize raw material supplies,

increasing the volume of cassava products manufactured to take advantage of the economy of scale,

investing in new innovative products that are distinct from traditional cassava products and expanding

manufacturing facilities with modern technologies/machineries.

Therefore, one significant finding of this study is that government has the greatest role to play in

developing the manufacturing functions of the cassava industry in Nigeria and that the transformation of

the cassava industry lies more with the government than with the poor individual industrialist.

Government should therefore initiate and impliment strategies in favour of the cassava industries both

as a major actor and as a facilitator contrary to its present posture of acting the latter.

5.2 CONCLUSION

This study has sought to project an approach which emphasizes that manufacturing success requires

a set of strategies to fashion out the way it should be operated and has successfully formulated twelve

manufacturing strategies for the cassava industry in Nigeria using the SWOT matrix technique with

Akwa Ibom state as its area of study. In the course of this research, the researcher has painfully

observed that the concept of “manufacturing strategy” though often given casual mentions in classroom

lectures and replete in Engineering books, literatures, journals and Industrial engineering publications,

appears unpopular with many average Nigerian engineers, whose concept of engineering centres around

traditional values of complex designs, fabrication, complex mathematical analysis and so on. In

response thereof, the researcher challenges the academics and designers of engineering curricula to do

something in this regard.

45 5.3 RECOMMENDATIONS

The need for improved modern cassava manufacturing technologies and machineries has been a

recurrent issue throughout the study. For example, the tedious but necessary process of peeling cassava

is yet to be mechanised. It is therefore recommended that Nigerian Engineers should take up this

challenge and come up with indigenous, efficient and affordable technologies that will enable the

cassava industry compete favourably with their foreign counterparts in this regard.

Poor funding and loan facilities for the cassava industries form the basis for strategy number five of

the formulated strategies. This further highlights the important role of the financial institutions to

manufacturing. As a way out of this problem, it is recommended that banks should not be content with

reading through proposals and requesting for unavailable collaterals before giving out loans, but must

ensure that the money is used for what it was intended for by paying directly to equipment

manufacturers. Such purchased equipments in addition to the land on which the industry is built could

be used as security by the banks. In other words, rather than scaring away cassava industrialists who

have nothing but land, ideas and feasibility report to present to the banks, close monitoring of the

industries should be carried out by the banks at different stages. It is the conviction from this study that

if banks review their lending policy along the lines proposed, they would assist greatly in developing

the manufacturing functions of the cassava industries in Nigeria.

Lastly, this study like any other is not exhaustive of innovative ideas, but still leaves room for

further improvement. For further studies, it is suggested that other researchers carry out this study using

other parts of the country as case study.

46 ��

�

�

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78) Richards, M. D. (1986). Setting Strategic goals and objectives. Minnesota: West Publishing Company.

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50 84) Ford, R. C., Mclaughlin, F. S., & Nixdorf, J. (1983). Ten questions about management by

Objectives. California Management review, Vol.45. No.6, spring, pp.88-94.

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88) Ukpe, I.G. (2004). Environmental management of cassava processing and equipment fabricating centers. Paper Presented during the training of Cluster Members of the Akwa Ibom State Cassava Competitiveness project, on 10th December, 2004. at Sun Centre, Uyo, Akwa Ibom State, Nigeria.

51

�� PROFILE OF INDUSTRIES USED FOR THE STUDY

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52

��DETAILS OF STRATEGIC ANALYSIS�

1. PRODUCT CONCEPT DESIGN AND DEVELOPMENT a.) PRODUCT ( R & D) PRACTICES

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5�� & � ��

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(5��

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b.) PLANT FACILITY

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5��

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/5��' ��

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25��

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85��

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�=5��) ��

(� !� !� � (� (� !� !� !� ! 5 � (� 2 ( 5 =� = 5 , , ��

c.) PLANT PRODUCTION PHILOSOPY

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,5��' �� !� !� (� !� (� !� !� � !5��(� 2�5(� =5(88�

/5��) ��

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85��

�� =� !� �� !� �� /� �5��(� !�5(� �5 ,!�

53

d.) PLANT LAYOUT � ��

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�� 1 � � � �

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�� 5(==� =5=� =5(�

5��' �� !� � !� !� !� !� !� (� �� !5===� 2=5=� =5(�


e.) PROCESS TECHNOLOGIES

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�5�� !� � !� !� � !� � !� �8� 5(==� /=5=� =5!2!�

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5��# � �� =� �� =� �� 2� �5===� �=5=� =5/=/�

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(5 �� .��

=� �� =� � =� �� =� /� 52/(� �/5(� �5=( �

,5�� & ��

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�=5�� =� �� 8� �5��(� ��5(� =5(88�

��5��# � �� 8� �5 /(� !/5(� =5!2!�

f.) QUALITY CONTROL � ��

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�5�� & �� & � ��

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5��' ��& �� =� �5(==� (=5=� =5(�

!5�� !� =� �� =� =� =� � =� 2� �5===� �=5=� �5(�

g.) MAINTENANCE

� ��

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�5�' �� !� �� =� �5(==� (=5=� =5/=/�

�5�- �� & �� =� � =� �� =� =� �� =� ,� 5/(=� ��5(� �5=8�

5�< �� =� �� =� =� � 2� �5===� �=5=� ��

!5�;��

=� =� �� =� �� =� =� =� �� 5�(=� (5=� =5! �

54 7. LOGISTICS AND MATERIAL CONTROL

h.) SUPPLIER RELATIONSHIP

� ��

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�5��

�� =� � =� �� =� �� =� /� 52/(� �/5(� �5=( �

�5�� & ��

!� =� � =� =� =� =� =� /� 52/(� �/5(� �5( ,�

5�' �� =� �� !� �2� �5�(=� !(5=� �5=8�

i.) PURCHASING AND ORDERING POLICIES

� ��

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�5��6 �� & �� =� �� =� �� =� �� =� /� 52/(� �/5(� =58�/�

�5��4 �� & �� !� �� !� �� 2� �5�(=� !(5=� �5�88�

5��) �� =� � =� �� 8� �5��(� ��5(� =58�/�

!5��' �� !� !� � � � !� !� �� /� 5 /(� ,/5(� =5,8,�

(5��' �� 8� �5 /(� !/5(� =5!2!�

,5��

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/5�� 1 �� !� =� (� � � !� � =� �� 5/(=� ((5=� �5/�!�

25��7�� =� =� =� =� =� =� =� =� =� =5===� =5=� =�

6. HUMAN RESOURCE MANAGEMENT

j.) HIRING PRACTICES

� ��

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�5��6 �� & �� =� =� �� =� =� (� 5,�(� ��5(� =5,8,�

�5��

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5��1 �� A�� =� �� =� �� ,� 5/(=� ��5(� =5! �

!5�� 8� �5��(� ��5(� =5 ��

(5�� =� �� 2� �5===� �=5=� =5(�

,5��

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/5��' �� !� � � � !� �� !� � �,� 5�(� ,(5=� =5,,��

k.) PERFOMANCE EVALUATION

� ��

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5��) �� (� (� !� !� � !� (� (� (� !5 /(� 2/5(� =5,8,�

!5��' �� !� � !� �� !� � �,� 5�(� ,(5=� =5,,��

(5�� 2� �5�(� !(5=� =5! �

55 7. ORGANIZATIONAL AND MANAGEMENT SYSTEM

l.) GENERAL ADMINISTRATION

� ��

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�5��6 �� !� (� � (� (� � � !� �� !5===� 2=5=� =52,,�

�5��6 � �� $ �� !� =� �� =� �� =� =� 8� �5��(� ��5(� �5 ,!�

5��

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!5��4 � � �� $ �� =� �� =� =� �� /� 52/(� �/5(� =5/2��

(5��% �� =� �� =� �� 2� �5===� �=5=� =5/=/�

,5��% ��1 ��

=� =� =� =� =� =� =� =� =� =5===� =5==� =�

/5��# � �� !� � �� 8� �5 /(� !/5(� =588��

25��;�� 1 �

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85��- � ��

=� =� =� =� =� =� =� =� =� =5===� =5=� =�

�=5) � �� 1 ��

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��5�+ �� =� =� �� /� 52/(� �/5(� =5(88�

7. EXTERNAL ENVIRONMENT m.) COMPETITIVE COMPONENT

� ��

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�5�� & � �� 1 ��

!� (� � !� !� (� !� � �� !5===� 2=5=� =5/=/�

�5�� 5��

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5��7�� >��

!� (� !� !� !� (� !� !� !� !5�(=� 2(5=� =5! �

!5 ) ��

(� !� (� (� !� !� (� (� /� !5,�(� 8�5(� =5!2!�

(5 �� & �� 1 ��

!� � !� �� !� �� !� �,� 5�(=� ,(5=� =52�8�

,5��;��1 �� .��$ �� 1 ��

!� !� !� � !� !� !� !� �� 52/(� //5(� =5 ��

/5�' �� (� � !� � (� !� � !� �� 52/(� //5(� =5/2��

25��7�� !� � (� !� !� (� (� � � !5��(� 2�5(� =5/2��

85��) �� .�� 1 ��

!� !� (� � (� !� � !� �� !5===� 2=5=� =5/=/�

�=5��' ��1 �� .�� (� !� � � !� � !� (� �� 52/(� //5(� =5/2��

��5�� 1 ��1 �� !� �� =� !� �� ,� �5===� !=5=� �5 � �

��5�6 �� >��

(� !� � !� (� � � !� �� 52/(� //5(� =5/2��

� 5��

�� =� �� =� �� =� �� 2� �5===� �=5=� =52,,�

�!5�+ � � �� !� !� (� !� !� � !� !� �� !5===� 2=5=� =5(�

�(5�+ � � ��

=� =� �� =� �� =� �� (� 5,�(� ��5(� =5,8,�

56 n.) EXTERNAL SUCCESS FACTORS

� ��

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�5��# ��

�� =� �� =� �� /� 52/(� �/5(� =5(88�

�5��) ��

!� � !� !� !� !� !� !� �� 52/(� //5(� =5 ��

5��+ � � �� (� (� !� (� !� !� !� (� ,� !5(==� 8=5=� =5(�

!5��

�� =� =� =� �� ,� 5/(=� ��5(� =5,,��

�

�

�

�

�

�

�

�� ANALYSIS OF INTERACTION MATRIX OF STRATEGIC SEGMENTS

(see Table4.1, page38)

(1)TABLE A1: INTERACTION MATRIX FOR STRENGTH AND OPPORTUNITIES (SO)

STRATEGIC SEGMENT

STRENGTH

OPPORTUNITIES

(S1) Abundance of primary raw material

(cassava) (S2) Industrial expansion, modernisation

and growth potentials (S3) Availability of manpower (labourers)

for production (S4) Wide range of products with

innovation capabilities S1 S2 S3 S4

(O1) Favourable and highly demanded products with high market share

+ + O +

(O2) Ability to expand products lines to meet broader range of customer need

+ + O +


0 0 O +

57 TABLE B1: ANALYSIS FOR TABLE A1

STRATEGIC FACTORS

S/N STRENGTH OPPORTUNITIES

RELATIONSHIP

STRATEGIC OPTIONS

1 S1 O1 +

2 S1 O2 +

Use the abundant raw material (S1) to take advantage of the opportunities(O1, O2) which include high demand for products as well as the prospect of expanding production lines to meet broader range of customer needs. This could be achieved by increasing the production capacity viz a viz the volume of manufactured products significantly more than is presently obtainable so as to increase the economy of scale.

3 S1 O3 O

4 S2 O1 + By expanding production facilities with modern machines, a higher production quota targeted at prevailing high demand for products could be achieved and consequently, opportunity(O1) would thus be utilized using the strength (S2)

5 S2 O2 + Strength(S2) utilizes opportunity(O2) by Investing in the manufacture of new products using modern machineries which ensures that new additional product lines are created to meet broader range of customer needs.

6 S2 O3 O

7 S3 O1 O

8 S3 O2 O

9 S3 O3 O

10 S4 O1 +

11 S4 O2 +

12 S4 O3 +

The relationship existing between (S4) and (O1), (O2), (O3) could be better utilized if range of innovative products are produced and used to exploit the existing opportunities such as high demand for products, range of unmet customer needs, high market share, etc.

SUMMARY OF (SO) STRATEGY BASED ON TABLE:B1

1. Increase the volume of manufactured products viz a viz production capacity significantly than is presently obtainable. S1(O1), S1(O2)

2. Expand production facilities with modern machineries. S2(O1)

3. Invest in new innovative cassava products. S2(O2), S4(O1), S4(O2), S4(O3)

58 (2) TABLE A2: INTERACTION MATRIX FOR STRENGTH AND THREAT (ST) STRATEGIC

SEGMENT

STRENGTH

THREATS

(S1) Abundance of primary raw material

(cassava) (S2) Industrial expansion, modernisation

and growth potentials (S3) Availability of manpower (labourers)

for production (S4) Wide range of products with

innovation capabilities S1 S2 S3 S4

(T1) Use of improved technology by foreign based competitors.

O + O O

(T2) Rising sales of cassava products substitutes (corn starch, millet, etc.)

O + O +


O + O O

TABLE B2: ANALYSIS FOR TABLE A2

STRATEGIC FACTORS

S/N STRENGTHS THREATS

RELATIONSHIP

STRATEGIC OPTIONS

1 S1 T1 O

2 S1 T2 O

3 S1 T3 O

4 S2 T1 + Threat(T1) puts the cassava industry at great disadvantage that could result in the continous patronage of imported products to her detriment. Consequently, facilities should be expanded with modern machineries/technologies so as to neutralize this threat

5 S2 T2 + Strength(S2) could be used to minimize threat(T2) if Production facilities are expanded with modern facilities/machineries. This will ensure that innovative cassava products that will meet high product demand and at the same time provide customer satisfactions similar to those provided by substitute products (corn, millet etc) are manufactured

6 S2 T3 + Product’s scarcity, low quality, and high cost are some of the major factors that promote importation of products at the detriment of the local industry. Based on the relationship between strength(S2) and threat(T3), these problem could be minimized by expanding manufacturing facilities

59 with modern machineries/facilities such that it will increase the production capacity and improve product’s quality at low operation cost.

7 S3 T1 O .

8 S3 T2 O

9 S3 T3 O

10 S4 T1 O

11 S4 T2 + Strength(S4) could be used to minimise threat (T2) by manufacturing new innovative products that will meet the demand for products and at the same time provide customer satisfactions similar to those provided by substitute products (corn, millet etc)

12 S4 T3 O

SUMMARY OF (ST) STRATEGY BASED ON TABLE B2

1. Expand manufacturing facilities with modern machineries/technologies. S2(T1), S2(T2), S2(T3)

2. Manufacture new and innovative products to disuade rising sales of substitutes such as corn, millet, etc. S4(T2)

(3) TABLE A3: INTERACTION MATRIX FOR WEAKNESS AND OPPORTUNITIES(WO)

STRATEGIC SEGMENT

WEAKNESSES

OPPORTUNITIES

(W1) Irregular supply of raw material

(W2) Low capacity utilization

(W3) Non standardised low quality products

(W4) Poor plant facility layout

(W5) Poor product research and development (R&D) capability

(W6) Use of low level manufacturing technology / machineries

(W7) Below average managerial / manufacturing / engineering skills

(W8)Inadequate public power (electricity) availability

W1 W 2 W 3 W 4 W 5 W 6 W7 W8 (O1) Favourable and highly demanded

products with high market share

+ + + O O + O O

(O2) Ability to expand products lines to meet broader range of customer needs

+ O + + + + + +


O O O O O O O O

60 TABLE B3: ANALYSIS FOR TABLE A3

STRATEGIC FACTORS

S/N WEAKNESSES OPPORTUNITIES

RELATIONSHIP

STRATEGIC OPTIONS

1 W1 O1 +

2 W1 O2 +

To ensure that weakness(W1) does not undermind opportunities (O1) and (O2) Cassava industries should cultivate their own cassava farm to improve their raw material supplies, encourage cassava cultivation by farmers through sponsorship, funding etc. and improve upon thier raw material supply logistics for efficiency.

3 W1 O3 O

4 W2 O1 + Low capacity utilization(W2) is principally caused by inadequate funds for procurement of consumables, requisite raw materials, expansion of facilities, maintenance of machines, general operations etc. consequently, to ensure that (W2) does not prevent (O1) from being utilized, improved funding through loan facilities should be provided to industries under less stringent conditions.

5 W2 O2 O

6 W2 O3 O

7 W3 O1 +

8 W3 O2 +

Government should Specify quality standards for cassava products through suitable legislation, regulation,enlightenment and subsequent enforcement through appropriate agencies such as NAFDAC. This will thus compel industries to improve upon their quality control functions and take advantage of opportunities (O1) and (O2)

9 W3 O3 O

10 W4 O1 O

11 W4 O2 + Relevant ministries, such as Industries, Agriculture etc should be incorporated through suitable legislation to oversee, counsel, and assist where necessary in simple plant facility layout design of cassava industries.

12 W4 O3 O

61 13 W5 O1 O

14 W5 O2 + Organize routine training, seminars, and workshops to cater for cassava industries research and development (R&D) needs. In addition, each industry should be affiliated to a research based institution such as a univesity for free routine counselling and consultation.

15 W5 O3 O

16 W6 O1 +

17 W6 O2 +


2. Enlighten cassava industries through suitable medium on the availability of these modern technologies/ machineries

3. Provide funding/loan under less stringent meaures to enable industries acquire these technology/machineries.

18 W6 O3 O

19 W7 O1 O

20 W7 O2 + Organise routine training/ seminars to upgrade the managerial/ manufacturing/ engineering skills requirement needs of cassava industries.

21 W7 O3 O

22 W8 O1 O

23 W8 O2 + 1. Site industries at locations with improved public power supply

2. Supply power to cassava industries at subsidised cost.

24 W8 O3 O

SUMMARY OF (WO) STRATEGY BASED ON TABLE B3

1. Cassava industries should own cassava farms and encourage cassava cultivation through

supports and sponsorship of farmers to improve and stabilise their raw materials supplies.

W1(O1), W1(O2)

2. Provide funding/loan facilities to cassava industries with less stringent measures. W2(O1),

W6(O2)

62 3. Relevant government agencies such as NAFDAC, SON, etc should specify quality standards for


upon their internal quality control measures. W3(O1), W3(O2)


simple plant layout design of prospective cassava industries. W4(O2)

5. Organise routine training workshops, seminars, etc to cater for cassva industries research

development (R&D) needs and also upgrade their manufacturing/managerial skills. W5(O2),

W7O2

6. Affiliate cassava industries to research based institutions such as universities etc to provide them

with routine avenue for consultation, guidance and counselling. W5(O2)


W6(O1)


and machineries. W6(O1)

9. Site cassava industries where there is improved public power supply and subsidise the cost of

the poer supply to cassava industries. W8(O2)

63 (4) TABLE A4: INTERACTION MATRIX FOR WEAKNESS AND THREAT (WT)

STRATEGIC SEGMENT

WEAKNESSES

THREATS

(W1) Irregular supply of raw material

(W2) Low capacity utilization

(W3) Non standardised low quality products

(W4) Poor plant facility layout

(W5) Poor product research and development (R&D) capability

(W6) Use of low level manufacturing technology / machineries

(W7) Below average managerial / manufacturing / engineering skills

(W8)Inadequate public power (electricity) availability

W1 W2 W3 W4 W5 W6 W 7 W 8

(T1) Use of improved technology by foreign based competitors.

O O + + O + O O

(T2) Rising sales of cassava products substitutes (corn starch, millet, etc.

O O O O O O O O


O O + O O O O O

TABLE B4: ANALYSIS FOR TABLE A4

STRATEGIC FACTORS

S/N WEAKNESSES THREATS

RELATIONSHIP

STRATEGIC OPTIONS

1 W1 T1 O

2 W1 T2 O

3 W1 T3 O

4 W2 T1 O

5 W2 T2 O

6 W2 T3 O

7 W3 T1 + 1. Import and replicate these modern technologies and machineries for local use.

2. Enlighten cassava industries through suitable medium on the availability of these modern technology/ machines

3. Provide financial assistance/loan to enable industries acquire them

4. Relevant government agencies such as NAFDAC should specify quality standards for cassava products and enforce it so as to compel industries to improve upon their quality control functions

64 8 W3 T2 O

9 W3 T3 + Relevant government agencies such as NAFDAC should specify standards for cassava products and enforce it so as to compel industries to improve upon their quality control functions

10 W4 T1 + 1. Compel relevant ministries, such as Industries, Agriculture etc through suitable legislation to oversee, counsel, and assist where necessary in simple plant facility layout design of cassava industries.

2. Import and replicate modern cassava technologies and machineries for local use.

3. Enlighten cassava industries through suitable medium on the availability of these modern technologies/ machines

4. Provide financial assistance/loan to enable industries acquire modern manufacturing technologies/ machines

11 W4 T2 O

12 W4 T3 O

13 W5 T1 O

14 W5 T2 O

15 W5 T3 O

16 W6 T1 + 1. Import and replicate these modern technologies and machineries for local use.

2. Enlighten cassava industries through suitable medium on the availability of these modern technologies/ machines

3. Provide financial assistance/loan to anable industries acquire them

17 W6 T2 O

18 W6 T3 O

19 W7 T1 O

20 W7 T2 O

21 W7 T3 O

22 W8 T1 O

23 W8 T2 O

24 W8 T3 O

65 SUMMARY OF (WT) STRATEGY BASED ON TABLE B4


W3(T1), W4(T1), W6(T1)


and machineries. W3(T1), W4(T1), W6(T1)

3. Assist cassava industries to acquire modern cassava manufacturing technologies and

machineries through adequate funding, loan and financing. W3(T1), W4(T1), W6(T1)



upon their internal quality control measures. W3(T3)


simple plant layout design of prospective cassava industries. W4(T1)