The Effects Of A Well Planned Purchasing Functions In The Attainment Of Organizational Desired Objectives (A Case Study Of Nigerian Bottling Company Plc, Ilorin)

Project and Seminar Material for Purchasing and Supply PS

The Effects Of A Well Planned Purchasing Functions In The Attainment Of Organizational Desired Objectives (A Case Study Of Nigerian Bottling Company Plc, Ilorin)


This Project work will examine the effects of well planned purchasing functions on the attainment of organizational desired objectives. (A case study Nigerian Bottling Company PLC, Ilorin)

The project will consist of five chapters as follows: Chapter one will focus on initial introduction, historical background of the case study, objectives of study, significance of the study, scope of the study, limitations of the study, hypothesis formulation, and definition of terms. Chapter two contains literature review. Chapter three consist of research methodology, research design, sources of data, data collection tools, research population and sample size, sampling procedure employed , method of data analysis. Chapter four contains data presentation, analysis of data, and proof of hypothesis. Chapters five consist of summary of findings, conclusion, recommendation and reference.

Chapter One

1.0 Introduction

Business all over the world owes success prospects, existence and growths to the effective application of the purchasing concept to their operations. A business usually start with an awareness of what is really needed for manufacturing and finding out what these needs are whether major or minor, they would them develop the idea of how to get it.

Purchasing as the name denotes is the procurements of the right quality of material in the right quantity, at the right time, from the right source at the right price and delivered to the right place.

These six rights are basic things which purchasing deals with responsibility of purchasing in achieving organizations objectives is not well recognized because many people assume that the function is just a sample exercise of processing requisition and placing orders which is critical task involved in buying.

However, it is a value creating functions and the role of the buyers is to ensure that the value of money spent reflects not only on the price paid but also the subsequent cost of receiving stores, replenishing and expediting.
In some cases there is some cost incurred when the supplier fail to meet delivery and satisfy the quality of material required, it is obviously agreed that about sixty-five percent (65%) of company’s total expenditure goes to the procurement of various materials and this has made it so clear that any for the organization without materials no cannot operates effectively as expected.

An efficient purchasing and supply management is the pre-requisite for formal and efficient management of materials, manpower and stock in an organization.

1.1 Historical Background of Nigerian Bottling Company’s Plc

The Nigerian Bottling Company Plc came into existence on 22nd November 1881 the company was founded by late A.G. Leventis and was the fairest in the country to be Franchise by an international “Soft Drink Firm” the first plant which was sited in Lagos went into operation in March 1955 with 6 Coke. This had a very modest success and the company decides to stick to this by monitoring the good reputation.

Coke was the first soft drink to have its own designed shaped bottle which was different from the common bottles in 1972, the company went public by issues of 372 compliance with the Nigerian Enterprises complies promotion Degree of 1972. The company offers 650 ordinary shares for 50 kobo per share.

The company offered 1.4million shares for subscription and added 81.921 shares, which was transferred from non-resident share holders to 14,000 when the company first started the operation distribution of its product to the Northern parts of the country’s this was made possible by A.G. Lenventis made this possible. Group companies of which Bottling Company is a number in other to meet the demand of the customers, additional plant s were established Ibrahim Plant, Port-Harcourt, other area of locations are Apapa, Jos, Kano, Benin and Kaduna in fact the ultimate objective of the company is to establish a factory in each of the state in Nigerian.

The share was said to have growth by 15 times in the 70’s and with higher hope for 80it is a huge sales recorded for the first half of 90’s every high sales record is being made.

The subsidence includes Delta Glass Limited, Ugheli which produce the bottle for company use Ijebu Ode. The plastic create are made by NBC in the plastic division of Benin.

However, the Ilorin plant was established in the year 1976 after a lot of delibration on how day, the Ilorin plant as one of the plant, has offa Okene, bida, Jebba, Oshogo, Ogbomosho as its depot.

The 20th year of the establishment of Ilorin plants will be marked in his year 1996. It has located at Coco-Cola Road industrial Estate Folawiyo Road Ilorin.

There is the administration block at the right side of entrance into the company’s compound followed by the production binding/department the company is well situated for easy movement and locations within the company’s compound.

1.2 Statement of the Problems

During the course of the study, the research discovered that purchasing function of the company under study was faced with some problems, some of which includes.

One of the major problem identified by the research was the failure of the organization to recognize the purchasing functions this results to the personnel of other department, handling productive job who have little knowledge of what purchasing is all about.

Another problem facing the purchasing function in achieving its set goals and objective is the general financial instability of the organization release fund to buy the required materials at the right time. This may so affect the ability or the buyer supplier in settling supplier bills and consequently obtaining better terms and conditions of the contract

1.3 Objectives of the Study

The primary objective of the research study is to satisfy one of the basic conditions for the award of Higher National Diploma Certificate (HND) in purchasing and supply awarded by the Purchasing and Supply Department, Institute of Finance And Management studies, Kwara State Polytechnic, Ilorin.

Another objective of is to examine the contribution of purchasing towards the attainment of the organizational goals objective.

1.4 Significance of the Study

The study is significant because it will help to focus the attention of the management of the organization to the problems militating against purchasing activities in the course of its day to day operations.

The Project is also signification in that it will serve as reference points to future researcher writing on similar topics.

1.5 Scope of the Study

This study will focus on the effects of well planned purchasing functions in the attainment of an organization desired objectives.

The scope will be Limited of Nigerian Bottling Company Plc, Ilorin.

1.6 Limitations of the Study

In the course of this study the researcher encountered following problem.

i. Financial Constraints:

The economic situation in the country today has an adverse effect on the financial aspect of this research work. The cost of investigation, in terms of printing of questionnaire, transport fares binding materials and typing of the project was very exorbitant that the researcher cannot afford to incorpate all necessary data relating to purchasing activities into this project.

ii. Time Constraint:

This constitutes a fundamental factor in the project based on the fact that times available didn’t allow for in depth treatment of the topic, lack of Full Corporation from officers of the company under study, they are reluctant in relating some information relating to procurement function of the country.

1.7 Hypothesis Formulation

A hypothesis is an assumption made about the researcher is trying to verify. Two major hypothesis will be formulated in the course of this study. The null hypothesis and the alternative hypothesis.

  • Ho: A well planned purchasing function has no effects on the attainment of organization desired objective.
  • Hi: Alternative hypothesis a well planned purchasing functions has positive effect on the attainment of organizations desired objective.

1.8 Definition of Terms

Purchasing can be defined as the process of procuring goods and services of the right quality at the right quantity, at the right price, at the right time, from the right suppliers or sources and to be delivered to where it is required (place).

i. Purchasing Requisition

A purchasing is the document used to record details of users requirement for the purchasing action.

ii. Sourcing

Sourcing is the process and procedure by which the buyer survey and evaluate suppliers and determines policies relating to those who can most suitably meet the requirement of the buyer.

iii. Negotiation

This is the act and science by which the buyer and seller (usually by personal discussion) resolve exact terms and conditions for a contract; the terms and conditions are analyzed, discussed and a common understanding is reached between be the parties.

iv. Expediting

This is the process of ensuring that relied goods are promptly delivered on time to meet the production schedules. Expediting is otherwise known as progressing, chasing and follows up. It is an important part of supply management task whose aim is to avoid late delivery of materials.

v. Value Analysis

Is the study of the relationship of design function and cost of any product, material with the objectives of reducing it cost; through modification of design material specifications, manufacture by more efficient process or change in source of supply.

vi. Value Engineering

Can be described as a systematic effort directed to analyzing the functional requirement of systems equipment facilities, procedures and supplies for the purpose of achieving the essential functions of the lowest total cost consistent with performances reliability and quality.

Chapter Five

5.0 Summary of Findings, Conclusion and Recommendation

5.1 Summary of Findings

Nigeria Bottling Company Plc. Ilorin is the largest manufacturer of soft drink in Nigerian.

The researcher’s findings focused on the effects of a well planned purchasing function in the attainment of organizations desired objectives.

However, the researcher is not intending to expose the purchasing and supply activities of the company to the entire public but to offer constructive criticism in order to bring improvement to the purchasing criticism function of the organization.

During the course of the study, it was observed that purchasing was a cost saving centre with a positive contribution to the profit objective of the organization. It was also discovered that there is a separate department of own.

During the course of the study, the researcher discovered that appropriate records were used to document purchasing activities this facilitates efficient purchasing activity.

Other findings mad as at the time of investigation are that purchasing department was responsible for the preparation of specification.

It was also observed that appropriate facilities were available in purchasing department for an effective performance.

It was also gathered that both centralized and decentralized method of operation were employed. The current economic downturn has produced an adverse effect on smooth operation of purchasing activities.

It was also observed that both manual and automated purchasing systems were adopted. The company under study has established programme for staff training. Adequate safety and security facilities were put to place in purchasing programme.

5.2 Conclusion

From the findings made so far, one can reasonably arrive at the following conclusion. From the management point of view, it is under stewable that current success enjoyed by company was as a result of staff performance it also can be concluded that purchasing function is a paramount exercise which required a greater attention of the organizations if its objectives is to be achieved.

5.3 Recommendations

In order to solve the problems identified in the course of invest the researcher recommends the following points as actual measured to improve the efficiency of purchasing, there should be constant assessment of the department to ensure that nothing but the best is obtained from it always. It must be managed by a qualified personnel in the field so that all the purchasing activities can be carried.

However, it is not enough to create purchasing department but also adequate authority should be given to the personnel to design purchasing policies and procedure.

There should be regular training and seminar for the purchasing staff in order to update their skills more qualified staff should be recruited to the department.

The Effects Of A Well Planned Purchasing Functions In The Attainment Of Organizational Desired Objectives (A Case Study Of Nigerian Bottling Company Plc, Ilorin)

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The Effects Of A Well Planned Purchasing Functions In The Attainment Of Organizational Desired Objectives (A Case Study Of Nigerian Bottling Company Plc, Ilorin)


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