COST REDUCTION STRATEGIES AND PERFORMANCE OF MANUFACTURING COMPANIES IN NIGERIA

Abstract

This work is on Cost Reduction Strategies and Performance of Manufacturing Companies in Nigeria (A Study of Selected Manufacturing Firm in Rivers State). Cost reduction strategies was measured by value analysis and value engineering while the researcher measured performance by Profit before tax and return on assets. The specific objectives of the study were: to determine relationship between value analysis and profit before tax of Manufacturing Companies in Nigeria; To investigate relationship between value analysis and return on asset of Manufacturing Companies in Nigeria; To determine relationship between value engineering and profit before tax Manufacturing Companies in Nigeria. To determine relationship between value engineering and return on asset of Manufacturing Companies in Nigeria. Questionnaires were used in generating data while the Spearman Rank Order was used in the determination of relationship between the variables. From the analysis the following findings were made; There is a significant relationship between value analysis and Profit before tax of the selected manufacturing companies in Nigeria; There is a significant relationship between value analysis and return on asset of selected manufacturing companies in Nigeria; There is a significant relationship between value engineering and profit before tax of selected manufacturing companies in Nigeria; There is a significant relationship between value engineering and return on asset selected manufacturing companies in Nigeria. It was therefore recommended as follows; Manufacturing firms should continuously embark on value analysis of existing products as an attempt in reducing cost of production which ultimately improves the profit before tax; Manufacturing firms should consistently compartmentalize the functions in the production process of products as this will reveal areas cost can be reduced with the ripple effect of reporting favorable Return on Assets.