Resource Management, Quality and Profitability of Sachet Water in Nigeria

Abstract

The paper examined the resource input and management of sachet pure water production and its profitability. The research design was both survey and analytical. The research used statistical process control to measure the current quality of the product (or process variability) and assess all resource inputs in the water factory of the Polytechnic Ibadan. All the inputs were quantified in monetary terms including depreciation and the indispensable waste. Profitability of the sachet water production in the academic environment were analysed on the basis of per kilogram of the poly-film, a piece of parking nylon, man-hour of human and facilities resources, packaging, distribution, transportation, fueling etc using Gross/Net Operating Profit to Net Revenue Ratio and Return on Capital respectively. Necessary consideration was given to NAFDAC requirements and regulatory framework with respect to hygienity of the product and the working environment, dressing codes, cleanliness, storage, water processing by competent and qualified personnel and using the correct machines. The result revealed that there was significant relationship between quality and profitability in sachet water production. It found out that the production process is in control since none of the samples fell outside the upper and lower control limits of 50.90 and 50.07 of the mean and 2.3674 and 0.2926 for the range respectively and after when the samples were subjected to all quality characteristics and measurements. The result also revealed that the factory was able to break-even and make profit in the first financial year of the factory operations. Marginal profit was recorded outside the depreciation of some infrastructures. The operating environment dense with students’ population not-withstanding, the factory recorded higher profit during the dry season which is peculiar to tropical region than in rainy season.The outcome of this research suggests that packaged (sachet) water business is a viable one if all resources are well managed, especially in an academic community of this type. A gross profit of N4,587,530($20,852) was earned in the 2014 financial year with net operating income of N1,342,754= ($6,103).  It will also add value to the quality of training given to Polytechnic graduates on the platform of Entrepreneurship Development as well as good source of internally generated revenue. The institution water factory is a litmus for all untreated and contaminated pure water factories within the environment and yardstick for NAFDAC re-assessment, validation of licenses and or prohibitions.

Keywords: Resource Management; Quality; Profitability; Packaged Pure Water (Sachet), Production Process Analysis.