Assessment Of Purchasing And Supply Contribution In Quality Determination And Control In A Small Scale Industry

Project and Seminar Material for Purchasing and Supply PS

Assessment Of Purchasing And Supply Contribution In Quality Determination And Control In A Small Scale Industry


Abstract


The study here investigated on “An assessment of purchasing and supply contribution in quality determination and control” A case study of star paper mills Ltd Aba. Hence for the purpose of quick reading and comprehension, the study report has been classified into four chapters. The first chapter takes of with introduction, which presents the general overview of the study statement of problems, objectives of study, research question, significance of the study, statement of hypothesis, scope of limitation of the study and definition of terms.

Chapter two deals with the literature review of the study with emphasis on the research topic purchasing what is it all about, basic objectives of purchasing department, quality, what is all about, how quality is determined, An Assessment of purchasing role in determining quality, determination of quality, purchasing role in quality control.

Chapter three makes, the discussions on major findings of the study from the concentrically literation.

Chapter four summarized the findings, conclusion and mad recommendation for immediate implication and or for further research. In this research are presented some of the results so far achieved in current research work in the field of An Assessment of purchasing and supply contribution quality determination and control in a small scale industry.

The aim is to develop a framework for considering the purchasing role in quality determination and quality control in industries. Most industries will find this research work very useful to their determining quality and control for quality of materials used. It is hoped that this research work will be beneficial and equally make an interesting reading to any one who cares to look into it.


Chapter One


Introduction

1.1 General Overview Of The Study

In every organization, no matter how small the management will not waste time and efforts in making or arranging for the supply of the wrong quality goods. This is one of the reason procurement in most organization, more especially in the manufacturing industry are receiving more attention than before, all in the bid to avoid waste arising from wrong purchase. Infact, purchasing objective have original been seen as the procurement of goods and services of the right quality in the right quality and at the right time, from the right supplier, at the right price. Price was put last, not because its importance. Would necessarily be least, but because it would often depend on the rest on the package, the specification, the quality, and so on quality was put first because it is fundamental.

In absolute terms quality is a function of excellence intrinsic value or grade as determined overtime by society generally or by designated bodies in specialized fields. In business and industrial activities generally quality is first defined as terms of relationship to a need or a function, in these case the important thing is not the absolute quality of an item, but the suitability of the item in satisfying the particular need at hand.

Quality can be also defined very simple as conformance with the stated requirement. Buyer responsibility and a supplies job is to deliver maternal whose quality conforms satisfactory with specification requirement. An assessment of purchasing and supply is normally expressed as “the procurement of the right quality material on the right quantity at the right time from the right supplied at the right source and at the most economical manner so as to offer value for money”.

This means that the right quality is normally achieved when the material under consideration is procured at the lowest cost consistent with ability so satisfy the functions for which it is interned. The role for users, department also has the responsibility for suitability determination, particularly for materials not used for production. An example of this is a situation where the administration officer or managers may be responsible for the determination of the quality of typewriter or stationeries used in his departments. I this second consideration, an assessment of purchasing department is clearly defined as having the role for responsibility for the determination of economic consideration for quality. This means that the purchasing should try to determine whether the selected material can be purchased on a timely and regular basis and from alternative sources on competitive basis.

According to Oyeoku (2001) a question may be asked if quality can be determined by one functions interested will determine the standard perhaps to the determent of the others. It follows therefore that quality must be the responsibility of everyone in the company for instance design, production, purchasing department and sales department and also users department. But generally to ensure that goods supplied are 10% right quality goods, the following factors must be borne in mind.

The first factor to be considered must be decided and stated in a simple but clear from what exactly is needed or required taking into consideration the intended application, this means that the purchases or the organization must have got a clear specification in addition the suppliers should fellow the specification as required with out unnecessary alteration to suit him (supplier). This will go a long way in avoiding production stoppage, redundancy, marketing problem and too much rejects etc which are associated with wrong supply of materials.

The second factor to be consideration is that a good specification must be correctly written, it therefore becomes necessary that after specification the chosen supplier must be informed of the specification and their capability to comply with, it must be ascertained. The third consideration is to expedite the specification knowing to well that mistake are made and processes started can be out specification. This helps to check the supplies output and could be normally sorted out from bed during this time and remedial action should be initiated if the proportion of defective products is getting out of control. The fourth situation, the final consideration is the monitoring of the physical supply which where the purchasing personal does a lot of job buts in some organization like start paper mills limited Aba. It aims at up-grading by adding its own quality and that quality is every bodies responsibility.

However, it is still good to appoint one person as the quality control managers, but so assign to him the responsibility for every thing effecting product quality is to give him much task to perform. Increasing, purchase quality assurances is seen as a systematic attempt by the purchaser to make sure that a supplier has the intension and capability for complying with his responsibility to assure the quality of what he supplies.

Brief History Of Star Paper Mills Limited

This star paper mills limited Aba was incorporated in Nigeria, in the year 1978. It also started operation that same year at Aba in the then Imo State now Abia State, Nigeria. Is has about five-hundred causal workers.

Ownership Of The Company

The company star paper mills limited is a private limited liability company. It was established by Chief Nnanna Kalu of he blessed memory. After his demise, his children took over the management of the company it is only the member of Nnanna Kalu’s family (Nuclear and extended) that have shares in the company.

Structure Of The Company

The company is divided into department each headed a functional manager to ensure that its operation are smooth and also to defined role and responsibilities thereby avoiding buck passing and clash of responsibility it also has various plant and depots (with their managers) scattered all over the country with their corporate headquarter at No 114/116, Aba-Owerri Road, Aba Abia State.

Below are the various major department/section and their responsibilities.

1. Managing Director:

He is the Chief Executive Office (C.E.O) of the company. All the function mangers are responsibilities to him. He sees to day to day running of the company and also ensure that his staff are well motivated.

2. Production Department:

This department has two division each headed by a production manger. Both of them are responsible to the managing director. The first production manger is stationed at Aba and in-charge of the paper (stationeries) plant, while the second is stationed at Ownerrinate, in Isiala-Ngwa in Abia State. He heads the tissue plant each of them report direct to the chief executive. The both oversees all the production and engraining activities in their respective plants as well as product quality control and plants maintenances.

3. Sales Department:

This department is headed by sales manager. He is in-charge of all sales activities which include distribution advertising, marketing, research and product sales promotion. He oversees the activities of the sales supervisor.

4. Account Department:

This is headed by the account managers. He is directly in-charge of salaries wages cost accounts and financial accounts. All other transaction which involves payment and receipts pass through him.

5. Administration Department:

This administrative manager heads this department he is in-charge of general administration activities which include day to day office duties and supply of stationeries and other official needs of the various offices in the company. He is in-charge of internal transfer of staff within the plants and the headquarter.

6. Purchasing Department:

department is headed by the purchasing manager. He is in-charge of procuring all the material requirements of the company. These include office equipment, furniture vehicles and stationeries example biro, ink ruler, staple, pin stapler etc the stock controller who is in-charge of the stores section reports to him.

7. Transportation Department:

This department is in-charge of transportation finished goods to the customers directly or through depots as the case may be. It is also in-charge of transporting material from their area of purchases to the plants where they are needed it is headed by a transport manger. He has transport supervisor who are responsible to him.

Activities And Products Of The Company

Star paper mills limited is one of the paper processing industrial in Nigeria. The company is also into market and distribution of their products and has been a household name in Nigeria for twenty nine years now. Their product are:

  1. Star toilet rolls (Tissue)
  2. Napkin-tissue (serviettes)
  3. Envelop-small and big size (officials the brown type)
  4. Exercise books (all sizes)
  5. Typing sheet
  6. Duplicating / photocopying paper and stencils.

In conclusion the Aba plant of star mills limited manufactures the following products: exercise books, envelop, typing sheet, while the Owerrinta plant manufactures toilet rolls (tissue) and Napkin paper (serviettes).


1.2 Statement Of The Problem

Nigeria as a nation is blasted with so many industries and academic institution whose services the nations cannot do without these industries are changed with the responsibilities of producing goods of high quality and standard at a very reduced sand affordable cost for the citizens material in this aspect became so vital that no result could be achieved without a good producer. At this instance, the purchasing department must have a good knowledge of quality control and better understanding of its specification requirements.

The research is faced with the problem of working out modalities for the improvement of the purchase of right quality in this organization conducting the research to find out what the assessment of purchasing should be in determining quality, knowing that professional purchasing should have a lot to offer under a situation like this. The researcher associate part of the problem with unprofessionalism in purchasing function. Some of questions that need to be asked and evaluated are therefore as follows:

  1. Are the right quality material bought at the right time to meet the need?
  2. How is quality measured?
  3. Who has the final say in quality? Purchasing or engineering or users department.
  4. Are those in change of quality control, export in the field?
  5. Is quality test computerized.

1.3 Objective Of The Study

The objective of this study therefore, is to gain appreciation of basic principles gotten from academic experience and the relationship between the principles and what is practically obtainable in manufacturing industry and government establishment.

The study is intended to create a relationship existing between the supplies and the department in change of goods inward procedures. This carried out to identify possible areas of controlling and determining the qualities of goods purchased in the organization. The student is practically exposed to the organization way of controlling its materials.


1.4 Significance Of The Study

In view of the huge expenditure on purchase of material used in organization, it becomes for the assessment of purchasing to be clearly spelt out in the determination of quality and also in the control of quality. In addition there are many reasons for the quality determination and quality control of the item or materials purchased, all of which will add up to profit for the buyers company. One important reason is that it avoids confusion between purchasers and suppliers in determine what is required. Correct understanding will result in improved relationships between the company and its suppliers.

Quality determination and quality control programmes are not in time and in needed quality of materials and part, which met the quality specified, other companies will gain, due to maintenance of adequate quality necessary to satisfy customers and to meet the competition of rival producers.

This project is also aimed at showing how purchasing is involved in quality matters. It is also meant to review the way quality is being measured in star paper mills Aba. It is also to determine the degree of interference (if any) by top management or other department on quality materials.

The study is also undertaken in partial fulfillment of the requirement of the National Board for Technical Education and Federal Polytechnic Nekede for award of HND in Purchasing and Supply.


1.5 Research Question

For the purpose of this research work, the following questions are formulated.

  1. Which department is responsible for the control of quality of material supplies in the company?
  2. What is functions, of purchasing department as regards to controlling the quality of items required?
  3. What method is used in the specification of the quality of materials required?
  4. What methods are been used in selecting new suppliers for the supply of a given material?
  5. How is quality determined?

1.6 Scope Of The Study

The scope of this study is suppose to cover at least one third of the total number of notable manufacturing companies, but due to financial and time constraints, the research was limited to only the star paper mills limited Aba, hence that is where the research is based, the result obtained will be used for generalization.


1.7 Limitation Of The Study

This research work is handicapped by a number of factors are as follows:

  1. Finance
  2. Time
  3. Insufficient literature materials
  4. Poor responses.
1. Finance:

In a project work like this there are bound to be some hindrances and obstacles posing a threat to the progress of the project especially in this era of Structural Adjustment Programme (SAP). As we all know money is not easy to come by so the research has to limit himself to the available financial resources and has to structurally adjust the project.

2. Time:

Time facts was one of the limiting factors that effected this project work that is the time limit within which to complete this work is relatively small and does not allow for a detailed investigation of the factor wanted by the researcher.

3. Insufficient Literature Materials:

The greatest hindrance to this project is the invariability of insufficient literature materials for this work to be effectively carried out by the researcher.

In the whole of my department (Purchasing and Supply) there is no sufficient work that has been done on the assessment of purchasing and supply contribution in quality determination and control up to date except through lecture materials in classrooms and the researcher is the first person to carryout a field work in what an assessment of purchasing and supply should be in determining quality and to control it in an organization, so this affected to project work.

4. Poor Responses:

The response of the people during interview, was very poor and there were some questions asked and their responses could be issue or they would tell you that it is confidential, with this information was not let out easily.

These was also the risk of running up and down to collect the necessary data for the project, as they could not be collected once. These was also this transport problem one had to face in the course of under which we are subjected to study is very poor and the researcher had to attend his lectures at the same time as he is doing other assignments together with carrying out this project work. All these poses as threats to the successful carrying out of this project work. However, there do not affect the design of the project itself rather some of the figures and facts inside are accurate based on the best of my knowledge.


1.8 Definition Of Terms

Specification:

Is a description of any object, material or process in sufficient detail to enable its manufacture and further identical production.

Store:

Include all movable property purchased from public finds or otherwise acquired by government.

Purchasing:

This is a process involving planning and its strategy to know the value for money spend.

Quality:

The acceptability of materials o component for a given purpose.

Reliability:

It is the probability of a product performing without failure a specified function under given condition for a specified period of time.

Conformance Quality:

This is the extent to which the supplier succeeds in meeting our specification.


Assessment Of Purchasing And Supply Contribution In Quality Determination And Control In A Small Scale Industry


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