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HOW COMPANIES ARE LOSING MONEY, A MANUFACTURER'S EXPERIENCE

By NBF News
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By Franklin Alli
Last Thursday, during the 40th annual general meeting of the Manufacturers Association of Nigeria, Apapa Branch, the Guest Speaker, Dr. Matthew Eshalomi, the Executive Director of European Soaps &Detergent PLC, narrated how companies are losing money from security to reception, drivers down to the junior staff.

In his presentation on contemporary issues in manufacturing in Nigeria- a manufacturer's experience, he told the audience that multiple taxes and levies, high exchange and interest rates , inconsistent government policies are not the only factors causing manufactures pain.

According to him, security is the heart and soul of most businesses. 'When massive lapses occur at the security posts, very soon the company will be out of business.'

Eshalomi, who is the Chairman, Vegetable Oil & Edible Oil sub sector of MAN, said: 'Let us start from the reception of the input materials at the Weigh Bridge. If the sums are not accurately recorded here the whole fails. The process of manufacturing is the conversion of input into another form of semi-finished or finished product with value added in the process. In all cases there must be mass balance.

Let me illustrate. A tanker load of crude oil comes into refinery for processing. Most tankers have several internal partitions and after weighing they are allowed to proceed to discharge into holding tanks. Between the bridge and storage tanks manipulation take place.

'While waiting to off load, the partition loaded with water while in transit a secret valve is opened and water is discharge on the premises before the tankers turn. On taking turn to discharge to the storage tank, it is assumed full load has been delivered especially when the holding tank has a large diameter and the results from dip stick usage are negligible.

'This offense is mainly the handy work of drivers without the owners of the consignment's knowledge. Whenever this happens and it is discovered by the security personnel, the seller who has dispatched a driver without proper supervision losses his money.

Trucks taking out finished goods out of the factory are experts at manipulating the quantity of goods leaving the premises. If the units are inspected at the top layer and multiplied by the number of layers, the pro crocks use the pyramid effects. It is a net work between logistics.

I have encountered this in the Industrial Gases plant, Vegetable oil Refinery and Soap making factory. This is very serious problem in an organisation where there are no female security persons and small expensive items are being produced.

We had noticed that some worker come to work very slim and after putting in 8 hours work when clocking out have become fat or very fat. They had spent a lot of time visiting the toilets fanning diarrhea to adjust their instant pregnancies.

On carrying out body check, they have been found with rolls of products carefully con-sealed in in-accessible areas. The result I do not need to state. This first thing to put in mind is that in any organisation that wishes to grow nobody is indispensable.

He urged his fellow manufacturers to look beyond appearance when hiring workers, saying 'Appearance could be deceptive.'

Let me illustrate.  In the early 90's a Vegetable oil refinery we had set up, we recruited some personnel and sent them overseas for training on to be hard working. The industry was in good shape and I had convinced the board of directors of the company to help worker in sponsoring their children's education. We called in this chap and offered to help in training one of his children. He had three children then while the youngest was in a kindergarten.

The company offered to pick up the bill and assist in the fees payment. When asked he produced a bill which was slightly more than his annual salary. When asked to explain how he was coping with a child costing more than his annual wages, he could not give a credible explanation.

I sent for the bin card of the equipment he was trained to handle and record of the maintenance of the unit he was the supervisor in charge. What I saw I kept to myself. I immediately recruited 3 engineering graduates who then worked directly with him.

Within 2 months, he repeated his old trick and. was given money to buy the component from Alaba International market. Immediately he left, I got a call and arrived at the factory and got the boys to open up the plant. We discovered he had reversed the polarity of the electrical connections.

We got the Refinery working before he returned and he was shocked. He was questioning who authorized the refinery to be started in his absence. The security conducted a search on him and found several components of the plant on him.

The main component he brought was taken. His collaborator spare part supplier left empty handed. He was dismissed on the spot and a few days later he drove in with a brand new car to show that he had arrived.

He urged companies to make annual leave a must for their staff.  Hear his reasons why: 'An employee who works 7 days a week, year in year out opts always for payment in lieu, watch it, there is something he is doing that management is not aware.

If he is not a driver, a worker should not be permanently on over time.  A supervisor was so entrench that the expatriate General Manager could not send him on leave. I was curious that there were too many workers asking for leave encasement.

So I requested . for the files of all those who had not gone on leave in two years and above be sent for routine inspection, then I gave directives for letters to be issued to all to proceed immediately on leave. This chap whom I had seen earlier in a party where I was invited by an employee of the company, stormed into the expatriate General Manager's office and demanded the leave letter withdrawal and threatened he would shot the refinery down. This employee had not taken leave in 4 years nor gone off duty for a single day in that period.

When the G. M. informed him that he had instructions from above and he was duty bound to carry it through. Even with me as a director of the company seated in front of the General Manager, he still threw caution to the winds. I sent him immediately on his accumulated four years leave and got security to walk him out of the factory premises.

Back to the party at Agege in Lagos, I reasonably certain I was not expected to honour the invitation. This chap attended and arrived in grand style in a newer model M- benz than the one I owned and drove in. His 4 years salary could not buy a second hand Volkswagen not to talk of Benz.

For most of the evening, the musicians were singing his praise to high heavens and he went on to do the usual. The information I gathered then was enough to dismiss out right. In three weeks the company made more money from the sale of fatty acid to soap manufacturers than in a whole year.

He said that management should not overlook the activities of junior workers because they can make or mar the company. The unskilled staffs generally dominate the headship and or prime positions. When they get into these positions they feel that they have finally arrived, soon suffer from the syndrome of 'Monkey de work bamboo de chop.'

Some of these workers carry on to the extent of determining which products or truck is discharged or items to accept at their arbitrary discretion. If management is not on its toes, plant operations become distorted and profitability affected. In many cases they set up their own spare parts shops where they purchase majority of parts.