Effective Sourcing, A Key To Successful Purchasing Function (A Case Study Of Rokana Industries Owerri)

Project and Seminar Material for Purchasing and Supply PS

Effective Sourcing, A Key To Successful Purchasing Function (A Case Study Of Rokana Industries Owerri)


Abstract


In recent years, effective sourcing has been as one of key successful in every business. Sourcing constitutes such an important part in business areas like companies and industries the business world, the successfulness of any business depend largely on the effectiveness with sourcing. Both in the public and private sectors of the economy, one discovers with dismay almost every worker in an organization is interest in buying and award of contracts. This trend has greatly increase mismanagement.

After due considerations of the public complaint the researcher decided to being carried out deals with the effective and efficient sourcing a key to achieving successful purchasing function with reference to Rokana industries Owerri, in doing this, relevant literatures were received, authorities on the topic were cited. Some recommendations were made as measures to cushion these sourcing level.

This work therefore is subdivided into five chapters of sub headings or related issues for better understanding the topic, chapter one deal with introduction while chapter two extensively reviewed existing literatures and chapter three deal with research and chapter four deal with data presentation while chapter five is all about summary and conclusion. This project work therefore was done in good way with almost carefulness and compliance on the topic.


Table Of Contents


Preliminary Page(s)

  • Title Page
  • Approval Page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of contents

Chapter One

1.0 Introduction

  • 1.1 Background of study
  • 1.2 Statement of the study
  • 1.3 The objective of the study
  • 1.4 Research question
  • 1.5 Significance of the study
  • 1.6 Scope and delimitation of the study
  • 1.7 Limitation of the study

Chapter Two

2.0 Literature Review

  • 2.1 Searching out suppliers
  • 2.2 Selection of suppliers
  • 2.3 Reason for institution a review
  • 2.4 Selection of sourcing strategy
  • 2.5 Advantage of single and multiple sourcing
  • 2.6 Factors to consider in suppliers evaluation
  • 2.7 Factors that limit suppliers evaluation
  • 2.8 Suppliers appraisal

Chapter Three

3.0 Research Methodology

  • 3.1 The population
  • 3.2 Sampling
  • 3.3 Sampling techniques
  • 3.4 Data collection and procedure
  • 3.5 Personal interview
  • 3.6 The use of questionnaire
  • 3.7 Data analysis method

Chapter Four

4.0 Data Presentation and Analysis of Finding

  • 4.1 Data presentation analysis of finding

Chapter Five

5.0 Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Bibliography.

Chapter One


1.0 Introduction

A brief history of Rokana industries plc stated on 11th September 1978 as a private limited liability company with the objectives of manufacturing toiletries, houses hold product and key personal hygiene product for the health care market.

The company maintains it need office at No 4 Ajay street off 52 Allex Avenue Ikeja – Lagos. While the factory is located at plot 5 mission Rd, Umualum Nekede Owerri it also maintain sales office and depots in Kano and Aba.


1.1 Background Of The Study

Ownership: it started as a wholly indigenous private enterprise upon it’s admission in 1991 to the second. Tier securities market of the Nigerian stock exchange the company share is now being held by the Nigeria public individuals, association and co-operate organization.

Management:

The general policy of the company is determined by the board of directors of which engineer Charles Ugwuh is the chairman and managing director be hold a master degree in engineering thermodynamics and is seen in business circles as he man with a vision on due to his dynamism in management and enter per annual projections.

The company also maintains the technical advisory services of her foreign suppliers and product brand owners.

The factory:

Rokana industries plc located on the vast area of land at Nekede on the out skirt of Owerri in Imo State. The factory accommodates the company raw materials and finished products warehouse utility services plants, liquefied petroleum Gas tank farm and factory Administration offices.

The Four Existing Manufacturing Units At The Factory Are As Follows

  1. The plastic unit currently producing tooth brushes dental stricks/plague, removers, plastic, components for the gerosol production line.
  2. The Aerosol units is responsible for the production of insecticides, air freshers, perfumes, furniture polish, deodorant etc.
  3. The LPG unit refills domestic cooking gas cylinder for its various customer, it also provider unstenched gas as propellant to the gerosol production line
  4. The cosmetic unit has a modern facilities cosmetics, hair shampoo, skin lotions.
The Product:

Jordan tooth brush it comes in a large variety of need sizes bristle striffriess and types. It is first and the best tooth brush manufacturer in Nigeria for Africa.

Other products include
  1. Rokana dry airfreshner
  2. Number insecticide
  3. Sparkle furniture polish
  4. Natusan baby oils, lotion and etc.
Research Development And Marketing

The company’s business interest demonstrates a well articulated marketing concept. The company’s products are marketed in all parts of the country through a net work of depots, sales offices, distributors. Commercial houses and major national chain supermarkets Rokana maintains a special trading arrangement with GD Olivants through which the products are distributed all over Nigeria.

In line with the Government’s emphasis on exports, Rokana’s quality products are being vigorously exported kerye cote D’ Noive, Liberia Tajo, Cameroon.


1.2 Statement Of The Study

It should realized that since sourcing is a very important aspect of purchasing and supply, if it is not done efficiently of the lowers price in the right quality of materials, in the right quantity at the right time and from the right source will not be achieved.

We should stop the act of awarding contracts to untrust worth and incompetent people who would divert funds to their own private purses. We should also check the solvency status of an organization. For instance, organization which are at the point of bankrupt which might not be in a position to finance their projects should not be awarded contracts.

Also before a contract can be awarded to people, they should make sure that they are professionals who would procure the materials in accordance with the ethics and practice of the professions.

The Purpose Of The Study Could Be Summarized As Here Under:

  1. To highlight the methods of sourcing for raw materials adopted by organizations.
  2. To analyze and identify the strategy behind the effectiveness of organization in the sourcing of raw materials.
  3. To derive from the above analysis the conclusive method which could be applied by organization in Nigeria, which may be done well due to difficulties in procuring raw materials for their production?
  4. To stress the importance of permitting only qualified and informed personnel to be involved in performing the function.
  5. To examine such infrastructures needed for efficient raw materials purchase management.
  6. To make recommendation where necessary thus aimed at improving the raw materials purchase system of the industry.
  7. To indicate the relevance of the sourcing function in purchasing and should be involved.

1.3 The Objective Of The Study

The problem that is generally associated with this research. Effective and efficient sourcing a key to achieving successful purchasing function is two fold concerned with sourcing in organization both public and private sectors of the economy and those related to the achievement of the purchasing function with sourcing, both in the public and private sector of the economy one discovers with dismay almost every worker in an organization is interested in buying and award of contracts.

This trend has greatly increased miss-management and squandering of public or tax payer’s money contracts are inflated arbitrarily also are prices of supplies meant for production which have all contributed to the present high cost of living. Problems are encountered in deciding where one can find the best information on suitable potential suppliers, how do we asses a suppliers long term stability and how can buyers cope with the hazards of purchasing from starting up companies not having a tract record to help in his purchase decisions these problems can however, be solved by employing trained and professionally qualified buyers to handle the important task of sourcing. Untrained and unqualified buyers should not be allowed to encroach into the profession.

Problem associated with the purchasing is that neglect, where purchasing as a profession has not been given its pride of place in organization in some organization it is a routine, unimportant function while in others it is treated as an important management function which immensely contributes to profits. It should however, be noted that in these days of high prices of materials and shortages.

Inflation and unstable supply market, it is not encouraging for any business organization to ignore the purchasing and supply functions there is also this other problem of lack of specialist in the field. This has resulted to incompetence and inefficiency in the performance of purchasing and supply function it is imperative that qualified and experience professionals are employed to handle the procurement of goods and services they would employ sound judgment with their knowledge and experience of procure material and service noted that in these days of high prices of materials and shortages. Inflation and unstable supply market, it is not encouraging for any business organization to ignore the purchasing and supply functions.

There is also this other problem of lack of specialist and inefficiency in the performance of purchasing and supply function. It is imperative that qualified and experience professional are employed to handle the procurement of goods and services. They would employ sound judgment with their knowledge and experience of procure materials and services efficiently and effectively.


1.4 Research Question

  1. How do you see purchasing function in the organization?
  2. What methods do you employ in obtaining your components?
  3. Is efficient purchasing an important feature in contributing to your organization profitability?
  4. Is purchasing in charge of order placing and execution?
  5. Who initiates requisition for purchasing of goods?
  6. Are your purchasing officers professionally qualified or do they acquire experience through the job practice?
  7. Does cordial relationship exist between the purchasing department and other departments in the organization?
  8. Does purchasing department have adequate number of staff to carryout purchasing activities?
  9. Who is responsible for the overall decision to buy?
  10. How do you see purchasing function in the organization?
  11. What procurement procedure do you operate?

1.5 Significance Of The Study

This study will expose the researcher to the need for effective and efficient sourcing which is an important key to achieving successful purchasing function.

It will also help or assist the buyers in obtaining “the right quantity or materials at the right time, in the right quantity , from the right source at the right price.

This project, therefore attempts to examine how effective and efficient sourcing for materials and service can contribute to the achievement of a more successful purchasing function which will ultimately contribution thereby reducing waste, cost and obsolescence.


1.6 Scope And Delimitation Of The Study

This work covers the methods employed by many organization seeking, surveying, and effective sourcing in Nigeria with reference to “Rokana industries Plc in Owerri.


1.7 Limitation Of The Study

A number of limitations are encountered on the process of writing this project these are data availability. The data available was to enough before the project. In the second library, i.e. the polytechnic Nekede Library it was enable me to get sufficient text books and visited IMT library and the Imo State library too, for me to get the information which was needed.

Time constraints at first when I was about to start the projects all my main is that it going to be easy for me and that me as a person will enough data for it, but later the discovered was not enough for me because combine writing of project with the normal day lecturers was not enough for me .

Another limitation encountered could be seen as “fear” because most people surveyed were ignorant of what is called research, they fail to give elaborate information about their organization and how they felt within the organization, despite the fact that the researcher told them that the information given would be made confidential.


Chapter Five


5.0 Summary, Conclusion and Recommendation

5.1 Summary

The study undoubtedly welcome the fact that no one importance of specification can satisfy all purpose that but should be used inter changeably with regards to prevailing situation. Without doubt the researcher has thus acknowledged this fact with both literature and practical researches have proved right each of the importance should be used where it is most convenient and suitable.

Specification of materials as a whole and he methods in particular pay important dominant roles in the search for right quality. Appropriate method of specification assists in resolving the functional conflicts of objectivity with regards to design, production and procurement.


5.2 Conclusion

In comparing this particular study, the researcher has drawn on personal observation and experience, interview and literature study etc. from a number of sources but apart from difference of emphasis comparable methods in relation to suitability can be recognized to be favored inmost situations however, the specification methods aspect of purchases can be compared to any project or programme management task in that the over all objective are defined in terms of cost, availability and suitability the researcher has undertook to find the most effective importance of specifying industrials materials in manufacturing industries with reference to Rokana industries Owerri the improvement in industries activities aimed towards manufacturing efficiency profiteering and company existence has necessitated positive thinking into the provision of effective and appropriate importance of specification the vast majority of home counter the fact that many items can be obtained more cheaply and sometimes more quickly by one importance of specification out the shifting emphasis has not undermined the established objective of purchasing function buying the right quality of material or services on the right quantity at right price from the right source and at the right time the term quality is the most fundamental objective.
A part from the truthfulness in these facts the study revealed the difference in classes of materials in individual objectivity and subjectivity are reasons for these suitable practices.


5.3 Recommendation

It has been observed that no one method has a balance of all the essential elements required to make and effective and suitable method. In the right of those findings in this study the research these for makes the following suggestion:

  1. Choosing any method of specification which will meet the objective at a reduce cost must involve these major considerations
    • The function of the item
    • Suitability to the purpose of the industrial need for consumers acceptance
    • Manufacturing considerations of economical production
    • Procurement consideration of market materials availability and price.
    • Production controls and purchasing ability to substitute material when such action becomes necessary.
    • Stores ability to receive, store and issue the material
  2. The company (engineering purchasing inspection, production control, manufacturing and storing requirement to use commercial industrial national and international standard materials whenever possible and to use any other method where standard materials are not available.
  3. Really all these consideration which specifically relate to individual department view must conflict with one another. However conflicts of this nature are secondary as grave as this extreme but all departments concerned must cooperate and top management must provide the encouragement and direction that will motivate the department to seek a company solution rather than departmental solution.
  4. Specification must be clear enough for both buyer any supplier to be absolutely certain that they are considering something but clarity in written expressions is not always easy to achieve for example, Baily as revealed one company lost N35.00 on a closed circuit television installation than the buyer really located was specified. In achieving clarity care must be taken to ensure that the specifications are not written around specific products so as to eliminate competitive opportunities.
  5. It was mentioned earlier that specifying unreasonable tolerances is another serious problem. Unnecessary precision inflate costs, increase production cost, and more rejects are certain. To avoid this situation it is best to adhere to the most economical method of manufacture while using standard specification by the standards specification by standard institutes and organization is necessary to bring in line with the every increasing change in consumer taste an industrial growth.
  6. The fact that an industry is efficient in relative terms of purchasing and manufacturing.

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