Make Or Buy Decision; An Important Tools For Increased Profitability Improvement In An Organization (A Case Study Of Coca-Cola Company Plc, Ilorin)

Project and Seminar Material for Purchasing and Supply PS

Make Or Buy Decision; An Important Tools For Increased Profitability Improvement In An Organization (A Case Study Of Coca-Cola Company Plc, Ilorin)


Proposal


The term “Purchasing” is widely used in industry commerce, public corporation and management to denote the act, the function and responsibility for procuring materials supplier and service.

The researcher is aware that most serious problems facing the world is the scarcity and the growing trend towards higher cost of materials and service. But it is amazing the purchasing which can be so vital to an organization survival is still little understood. Although as function spend a significant portion of very income of organization, yet many still look upon it as little and not more than a clerical or routine activity.

Too many assumed the function is just a simple exercise of processing requisition and placing order. Professional purchasing however is not a clerical task.


Chapter One


1.0 General Introduction

The term “purchasing” is widely used in industry, commerce’s, public corporations and management to denote the act, the functions and responsibility for procuring materials supplies and services.

The research is aware that most serious problems facing the world is the scarcity and the growing trend towards higher cost of materials and service. But it is amazing the purchasing, which can be so vital to an organization survival is still little understood. Although, the function spend a significant portion of every income of organization, yet many still look upon it as little and not more than a clerical or routine activity.

Too many people assumed the function is just a simple exercise of processing requisition and placing order. Professional purchasing however is not a clerical task.

However, in narrow sense and considering the topic make-buy decision as an important tool for increased profitability, the term determine the need, selecting the supplies, arriving of proper price term and condition issuing the order, follow up to ensure proper delivery.

The basic elements involved in performance of this purchasing function at a Coca-Cola Plc, Ilorin, are obtaining the proper equipment, materials, supplier and services that are needed, where they are needed at the right time, at the right price, in the right quantity and quality, from the right source through since Cullintin found that make or buy decision often attracts attention than need and it tends to be taken on the basic of incomplete or inaccurate information and for years without being re-considered, although they have changed significantly.


1.1 Statement of the Problem

General problems in this research induces whether to make or buy in the special focus in order not to miss its usefulness. At the initial stage, there may be every tendency for the organization not to make it all in that level of profit maximum may be very low and it may be lead to the close down of the firm in the future.

The company may even find it difficult to achieve its pre-set objectives if it fails to run smooth production at a given period or as stated, as to be able to meet the demand of the timing customers. A merchandising firm will run the risk of loosing customer without adequate supplies to meet the rogues of customers.

Decision to either make or buy constitute the most significant part of the current production of most manufacturing merchandizing firms which indicates clearly that substantial amount of money is committed to this important tool. It is essential therefore to efficiently monitor to either make or buy to avoid in the production process, under investigation and over investigation.


1.2 Objective of the Study

The purpose of this project is to contribute to the standard and buying performance of an organization. It is aimed at examining the ways in which manufacturing organizations can achieve corporate goals in the area of profitability, lower operating cost, lower cost of financial procedure by applying make or buy decision in the strategic planning process.


1.3 Significance of the Study

Apart from the researcher, there are other parties to whom the research work is remarkably significant and could benefit from. The client company i.e. Coca-Cola Company Ilorin is also an advantage of gaining from the research works as its focused on its operation as the subject matter.

The reference company could benefit in the area of purchasing and supply impact made by researcher. Lastly, the professional colleagues will equally learn much about make or buy decision as particularly carried out in the manufacturing industry in an additional knowledge which has been learnt already in the lecture room.


1.4 Scope of Study

The scope of this research work is based and centers on core areas of make or buy decision i.e. who determine what or buy decision i.e. who determine what or buy and the effect of this decision on the organization profit.

In order to consider to scope of making or buy decision, there is the need to actually minimum effort and cost taking into consideration make or buy decision as an important tool for increased profitability at Coca-Cola Company Plc Ilorin.

Before any purchase order is raised of Coca-Cola Company Plc, Ilorin, decision has to be made whether the item in question to be purchased or manufacturing internally as will be necessary.

This decision regarding what to purchase or make is essentially the decision often seem to be taken as required by design, production or purchasing people acting together or separately with no writing policy guide and no apparent provision for periodic review.

There is no need to distinguish between tactical decision and strategic decision.

Make or buy decisions taken at departmental level are those which simply apply to the existing policy. They are tactical decision. When a change in policy in invariably considered, it is then this decision are taken at higher level where the company strategy is decided.

Considering make or buy decision, it is worth nothing that 60% of company annual budget is open by the purchasing departments and millions of naira are lost annually as a result of purchasing items. This would therefore be more economically decided whether make or buy. This was the conclusion of Culling research first published in 1942 and subsequent investigation do not reveal that there is considerable improvement over know that before purchase orders are raised, a decision, a decision is made on whether the item in question is to be manufacture or bought as the case may be.

The basic elements involve in the performed of this purchasing functions are obtaining the proper equipment, material and services that are needed and where they are needed at the right piece, time, quantity and quality with minimum efforts. It covers all fact of purchasing in Coca-Cola Company, Ilorin. For example whether the decision has reduced, in a storage spaces or has added whether quality of product or falls with make or buy decision at Coca-Cola company Ilorin.


1.5 Limitation of the Study

There cannot be any successful research of this nature without encountering some difficulties which might cause it success or failure. Different in securing some of the vital documents containing some valid information relating to the subject matter because of Lukeworm attitude of some officers who are suppose to assist in the research work. This occurred with the view that such a research can secure a deterrent to them, forgetting that it may be of immense improvement in their performance.


1.6 Historical Background of Coca-Cola Company

Coca-Cola is the world leading soft drink sold in more than 145 countries. A total of 270 million of bottles of Coca-Cola are consumed everything in all parts of the globe from Canada on the north to Argentina and New Zealand in the south, from Alaska to China, from Mexico to Nigeria. It first comes to Nigeria in 1963 when Bottling Company set up its first plant in Lagos. It was to be the beginning of an exciting story of growth and development particularly during the past ten years.

The success of Coca-Cola has brought with it the development of a number of sister industries, they all contribute to the Nigeria economy. For example Delta Glass Company Ughu, which supplies the million of bottles required to keep a large Bottling Company in operation and the crown Product factories in Ijebu-Ode and Kano which manufacture the metal crown to seal the bottles. Also, the Benin Plastic Company which make the plastic crate for carrying the bottle.

In addition, the trucks which are a familiar sight in many parts of the country, delivery soft drink to more than 80,000 dealers are also assembling in Nigeria.

Nigeria Bottling Industry is also the largest manufacturer of carbon dioxide in the country.

This is used to carbonate the favourite soft drink: Nigeria Bottling Company employed over 60,000 Nigerians in all fields operation.

Quality is the words which determine the success of the whole operation. Only the very best ingredient are used for making soft drink and sophisticated washing and filling equipments have been installed at all plant extremely high standard for hygiene are maintained to ensure that top quality products reach the customers.

The manufacturing process of Coca-Cola is based on a carefully increased combination of sugar, water and the same standard is maintained throughout the world. Nigeria Bottling Company plants are situated in many parts of the country; the headquarters of Nigeria Bottling Company is at Leventis Building Iddo House, Lagos.


1.7 Definition of Terms Used for Clarification and Better Understanding

Make:

It is the act of producing certain things

Buy:

It is an idea of paid or getting by buying a price.

Policy:

The plan of action to be taking by management of an organization policies defines the boundaries within which decision can be made by their direct decision towards the accomplishment of objective.

Decision:

It is the act of making up one’s mind about certain things.

Capital Equipment:

Is the installation of equipment such as plant machinery, and other major equipment used directly for production of goods and services.

Purchasing Policy and Procedure Audits:

This is used to determine of established policy and procedure are being adhere to.

Purchasing:

Is the continuous management process that is responsible for anticipation, identification and the provision of the goods and services that are required by an organization with objective of increasing organization’s profitability.

Production:

It is the process of production or making an item.

Capacity:

Ability to contain, hold or get hold of something.

Unsatisfactory:

Not giving pleasure of satisfaction, from need or desire.

Specification:

Is a defined description of what is wanted.

Supplier:

One where responsibility to supply or make available for further usage either for production or normal consumption.

Standard:

It is model with which something is compared.

Quality:

Is anything that conforms with one’s pre-determined standard.

Evaluation:

Evaluation in purchasing is required to ensure that progress is being made toward objective according to plan. Evaluation is part of the control process.


Chapter Five


Summary of Findings, Conclusion and Recommendation

5.1 Summary of Findings

The researcher was able to find out something through the application of make-or-buy decision that the Coca-Cola Company Plc Ilorin is bale to maximize profit and minimize loss by making raw materials available to the production department uninterrupted at all time.

Coca-Cola Company also utilize efficient effective make-or-buy programme and this attains the substantial benefits that the decision afford it users among the benefit of the decision is that it has reduced the number of varieties since the company has decided to buy certain parts outside the firms the number of components manufactured by the company has reduced with it attendant effect on performance.

This in effect has stipulated a suitability of purpose and reduced stock holding drastically found that would have been expected on stock taking have been reduced drastically.

The scope of error in the production has been reduced since part that would have been made are now bought and there is a hundred percent concentration in the area it handles now. It therefore permitted interchangeability lower manufacturing cost. Increased the output and productivity at lower cost. The inspection of their product is simple considering the number and varieties of part it handles and this and other benefit as mentioned above have led to the expected increase in the profitability of the company which is the ultimate aim of any organization.

Considering all said above, one could reduced that the decision to either make-or-buy is of paramount important to an organization of the magnitude of the Coca-Cola Company Plc, Ilorin and perfectly in line with the established theory in other organization.


5.2 Conclusion

In conclusion, the researcher intends to mention have that the problems involved in make-or-buy particularly in Coca-Cola Company Plc, Ilorin.

The operation of this firm deserts to be praised considering the magnitude of the operation it carries out.
Also purchasing techniques and simplification value analysis and standardization programme can be used to increase the profitability of the firm and in addition to concentration in using negotiating the determination of the right price. Price like the published price list and competitive bidding system should be used.


5.3 Recommendations

The researcher noticed that any formal organization to continue to exist and function well. It is evitable that several activities which are sectionalized love to be co-ordinate.

Hence, it well not possible for any department within the organization, the researcher urges that there should be good interrelationship between all the department in organization can achieve its aims and objectives.

Lastly, the company should try to see that the staff of the company is sent to undertake short term courses in all the departments of the organization so that the standard and the profitability of the company may be achieved.


How To Get The Complete Material For Make Or Buy Decision; An Important Tools For Increased Profitability Improvement In An Organization (A Case Study Of Coca-Cola Company Plc, Ilorin)


Project Material Download

3,000 Naira


The Complete Material will be Sent to You in Just 2 Steps

Quick & Simple…


Step One Purchase

Make a Mobile Transfer or POS Payment of ₦3,000 to any of the Account Below

Access Bank PlcAccount No.: 0811003731
Name: Samphina Academy
Account Type: Current
Zenith BankAccount No.: 1225513212
Name: Samphina Academy
Account Type: Current

Or CLICK HERE To Pay With Debit Card

FOR CLIENTS OUTSIDE NIGERIA
CLICK HERE To Pay With Debit Card ($15)
GHANA – Make Payment of 80 GHS to MTN MoMo, 0553978005, Douglas Osabutey 

Step Two Purchase

Send the Following Details on WhatsApp ( 08143831497) After Payment

  • Payment Details
  • Email Address 
  • Make Or Buy Decision; An Important Tools For Increased Profitability Improvement In An Organization (A Case Study Of Coca-Cola Company Plc, Ilorin)

The Complete Material Will Be Sent To Your Email Address After Receiving Your Details
T & C Apply


  Contact Our Help Desk


⚠️ Need a different topic? Perform a quick search



Get A Complete Business Plan For Any Business In Nigeria

Business Plan for Businesses in Nigeria

  Business Plans in Nigeria


Disclaimer


This research material “Make Or Buy Decision; An Important Tools For Increased Profitability Improvement In An Organization (A Case Study Of Coca-Cola Company Plc, Ilorin)” is for research purposes and should be used as a guide in developing your research project / seminar work. For no reason should you copy word for word (verbatim) as samphina.com.ng will not be liable for any who copied the material.

The aim of providing this material is to reduce the stress of moving from one school library to another all in the name of searching for research materials. This service is legal because, all institutions permit their students to read previous projects, books, articles or papers while developing their own works. According to Austin Kleon “All creative work builds on what came before”.

samphina.com.ng is only providing this material “Make Or Buy Decision; An Important Tools For Increased Profitability Improvement In An Organization (A Case Study Of Coca-Cola Company Plc, Ilorin)” as a reference for your research. The paper should be used as a guide or framework for your own paper. The contents of this paper should be able to help you in generating new ideas and thoughts for your own research. Use it as a guidance purpose only.

Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.