Effectiveness Of Purchasing Planning And Control In A Manufacturing Organization

Project and Seminar Material for Purchasing and Supply PS

Abstract

This study is on effectiveness of purchasing planning and control in a manufacturing organization. The total population for the study is 200 staffof (ANAMMCO), Enugu state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made of electricians, engineers, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

Chapter One

Introduction

1.1 Background of the Study

Looking ahead and prepare for future is better than to look back and regret. An organization especially a manufacturing in a very competitive needs to examine how it can effectively develop plan and strategies for serving its purchasing.

The aim of any purchasing operation is to make the future happier. But this was not well recognized by most firms initially so job that should be handled by experts in the field of purchasing were given to less qualified personnel’s and in most case this shorten the life of most business.

Planning is the management function of setting target or objective to be achieved and detailing out ways by which the target will be achieved.

Planning is sometime greater than first thinking ahead. In manufacturing organization (Anammco) purchasing planning and control show who is to do the job (qualified purchasing personnel’s) how the qualified purchasing personnel’s will carryout the job and when the job will be done.

Purchasing planning and control share with the others activities of the purchasing mix the distinction in commerce of being a dynamic element in operation of business. The effective of purchasing planning and control in a manufacturing organization enable the organization to absorb possible shock emitting from purchasing environmental change.

The subject matter is chosen by the researcher to explain the foregoing Anamco marketing planning and control in other to know its effectiveness.

According to Adirika (2003, P.11) in this lecture note, “purchasing planning is an exercise of analysis for and to increase the effectiveness of purchasing. Or drawing from the past to decide in the present what to do in further in other to achieve the purchasing objective enterprise efficient effective.

Purchasing planning does not depends on only theory or book knowledge. In other to plan effectively we need to understand and know about our own environment (Macro – and Mirco environment) where the purchasing plan will operate.

For purchasing planning and control to be effective the qualified purchasing personnel that carried out the purchasing and control may consider some element or feature such as time.

Purchasing planning and control will be effective if the plan has a stated time, for completion, the estimate of time may be varied depending on the product or firm.

For purchasing planning and control to be effective the money for material needed for the effective planning must be available and human resources.

The qualified purchasing personnel’s would have a group of consumers or target markets in mind and then position the organization’s or company’s product on this target market or segment.

Purchasing control played a vital role in a manufacturing organization. If all purchasing programme or plan along with other sub function are ideal and well harnessed but lack control it will be likened to driving a well structured comfortable vehicle without a steering on a very busy road.

Control is the vital follow – up process which is complementary to planning while purchasing planning is deciding in advance what needs to be done, how and when it should be done.

As clearly recognized decade ago in an undertaking control consist on verifying whether everything occurs in conformity with the plan adopted, the instruction issued and principle established. It has for object to point out weakness and error in order to rectify them and present recurrence.

Purchasing control as concerned with establishing and maintaining appropriate procedure and apparatus for monitoring and measuring the implementation of purchasing plan and strategies set out to active purchasing objective and taking necessary corrective action.

1.2 Statement of the Problem

It has been said that planning is determining the future ad control what have been planned.

In having good and effective purchasing planning and control in a manufacturing organization, some basic problem confront purchasing management.

One of the problem is availability of funds to the purchasing department, the company may lack adequate finance to carryout set purchasing planning and control effective. The absence of funds at the right time to back the plan means incapacitate by the executive in implementing the plan and ensuring that deviation are connected.

Another problem may be problem of recruitment of qualified personnel to handle the planning and having experience person to execute the set plan.

Frequent change of purchasing personnel may also contribute or improve the effectiveness of purchasing planning and control in a manufacturing organization.

In looking at this, one would want to know the effectiveness of purchasing planning and control in a manufacturing organization how it can be effectively implemented and also the various ways to improve on it effectiveness to achieve organizational goals and objective.

1.3 Objective of the Study

The primary objective of this study is to know the effectiveness of purchasing panning and control in a manufacturing organization (ANAMMCO)
This study will enable the research to know some basic problems that develop in the process of having good purchasing planning and control in a manufacturing organization.
This study will provide the researcher some solution to the problem and reduce bottleneck in planning process of the particular organization.
To know the benefit on good purchasing planning and control in a manufacturing organization.
This research can equally serve as a base for further study on topic related to the subject.

1.4 Research Hypotheses

H₀: there is no effectiveness of purchasing planning and control in a manufacturing organization (ANAMMCO)
H₁: there is effectiveness of purchasing planning and control in a manufacturing organization (ANAMMCO)
H₀²:there is no benefit on good purchasing planning and control in a manufacturing organization
H₂: there is benefit on good purchasing planning and control in a manufacturing organization

1.5 Significance of the Study

The significance of the stud is to draw the attention of other researchers in the field of business especially purchasing to be interested in the conduct of more indept research in the area of the Purchasing planning and control effectively.

The idea will act as a framework ie to put the plan together to direct market managers on how to put the plan together so s to make it effective in formulating good Purchasing planning and control over foreign investor in Nigeria.

The study will also induce business managers, entrepreneurs, purchasing managers, and sales managers to take proper care to develop a purchasing pan and control that will be devoid of the problem identified by the research in the study. This write up is also expected to teach young learners to serve as history for them during their own time of learning.

Based on the findings, the researcher will work within his scope to provide some solution to the research problems and reduce unavoidable ones.

1.6 Scope and Limitation of the Study

The scope of the study covers effectiveness of purchasing planning and control in a manufacturing organization. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.

1.7 Definition of Terms

Planning:

Is deciding in the present what to do in the future.

Control:

A process of monitoring what has been planned

Strategy:

Is the pattern of major objective purpose of goal and essential policies and plan for achieving those goal stated.

Effectiveness:

To be able to bring about the result intended.

Manufacturing Organization:

Those companies that produced good either consumer goods or industrial goods for consumption or for further product.

Qualified Purchasing Personnel’s:

They are those purchasing that are competent in carrying out purchasing activities in an organization.

Goal / objectives:

What the company intends to achieve.

Potential Customers:

Those people that may be the company’s products

Market:

Is the set of all actual and potential buyers of the company product

Market Opportunity:

Is an area of buyer need in which a company can perform profitably.

Purchasing Mix:

Is the set of purchasing tools that the firm uses to pursue its purchasing objective in the target market.

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
Chapter three deals on the research design and methodology adopted in the study.
Chapter four concentrate on the data collection and analysis and presentation of finding.
Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain effectiveness of purchasing planning and control in a manufacturing organization.In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challengesof purchasing planning and control in a manufacturing organization

5.2 Summary

This study was on effectiveness of purchasing planning and control in a manufacturing organization. Five objectives were raised which included:The primary objective of this study is to know the effectiveness of purchasing planning and control in a manufacturing organization (ANAMMCO), this study will enable the research to know some basic problems that develop in the process of having good purchasing planning and control in a manufacturing organization, this study will provide the researcher some solution to the problem and reduce bottleneck in planning process of the particular organization, to know the benefit on good purchasing planning and control in a manufacturing organization, this research can equally serve as a base for further study on topic related to the subject. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staffof (ANAMMCO), Enugu state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made of electricians, engineers, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

5.3 Conclusion

The purchasing function within an organization contributes as much to the success of the organization as other functions in areas such as marketing, finance and accounting, engineering, and operations. (ANAMMCO), the purchasing department consumes about 50% of the company’s Cost of goods and services. The impact of its strategic approach to buying helps in reducing cost of purchases and thus enhances the company’s profit. The department is highly recognized by the top management and its activities are heavily considered in the corporate planning process.

5.4 Recommendation

The strategic purchasing strategy adopted by an organization depends on the nature and industry it belongs to, and should suit its activities. In (ANAMMCO), the strategic approach to buying implemented in the company is in line with its nature and well befits its activities. In addition, the profitability created by the impact of the strategic purchasing approach of (ANAMMCO), extends beyond the monetary gain, and includes large discounts for bulk purchases, competitiveness among suppliers leading to production of high quality products, and hiring of highly qualified personnel who enables it to stand toe to toe with suppliers are all steps in the right direction.

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