An assessment of cost reduction tools as a means of improving organizational profitability – case study of Unilever Brothers Nigeria plc, Aba

Description

An assessment of cost reduction tools as a means of improving organizational profitability – case study of Unilever Brothers Nigeria plc, Aba.

Abstract

This research work investigated with a particular reference to Unilever Nigeria plc, the existing assessment of cost reduction tools in operation. Their effectiveness as veritable cost reduction tools and above all, how much or less they have contributed to reduction of cost operation/production of the company. In carrying out a case study, three modes of gathering information were used which includes, questionnaires, personal discussions and interview and observations in the firm the data which were collected through questionnaires administered, were analyzed with the use of a simple percentage method. However, the study revealed that the company adopted and used the following cost reduction tools among others, staff training (to enhance efficiency and skill), good inventory management through the Economic Order Quantity (EOQ) model, maintenance of low labour turnover rate, strict supervision of activities, responsibility accounting system, turn around strategy, and periodic preparation of cost analysis and investigation of material variances. These strategies have not been without problems. It was found that staff members who have been denied some welfare facilities and fringe benefits as a result of cost reduction tools in vogue have developed a like ward altitude of work and a declining moral for productivity. Based on these findings, it was concluded that these tools were adopted by Unilever Nig. Plc is suitable for modern day operation/productions for a manufacturing company of its caliber. Also, these tools have equally led to a significant difference in materials costs of the integration strategies, reviews of contracts, the establishment of a separate purchasing department and approval of overtime allowances for workers on essential duties are areas to be looked into within a view to enhancing preference of the workers’ areas recommended being seriously encouraged including the accounting system in operation.