The Impact Of Purchasing And Supply Management In A Manufacturing Company (A Case Study Of Nigerian Brewery Plc)

Project and Seminar Material for Purchasing and Supply (PS)

The Impact Of Purchasing And Supply Management In A Manufacturing Company (A Case Study Of Nigerian Brewery Plc)


Abstract


Impact of purchasing and supply management in a manufacturing company. A case study of Nigeria Brewery plc is the topic of the project work. This is in partial fulfillment of the requirement for the award of Higher National Diploma (HOD) in purchasing and supply.

Purchasing and supply is one of the management functions in a manufacturing organization involved in buying and selling of goods and also the management of stock.

The study covers up to five chapters. Chapter one deals with the background of the study, chapter two deals with literature review, chapter three talks about the research methodology and chapter four is on the presentation and analysis of data while chapter five is the summary, recommendations and conclusion of the study.


Table Of Contents


Preliminary Page(s)

  • Title
  • Declaration
  • Approval
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Content

Chapter One

1.0 Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of Problem
  • 1.3 Purpose and Objective of the Study
  • 1.4 Research Questions
  • 1.5 Statement of Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope and Limitation of the Study
  • 1.8 Definition of Terms

Chapter Two

2.0 Literature Review

  • 2.1 Storehouse/Stockyard security
  • 2.2 Inspection
  • 2.3 Storage of Materials
  • 2.4 Methods of Materials Handing
  • 2.5 General Inventory System
  • 2.6 Custody of Keys
  • 2.7 Marking the Stores
  • 2.8 Staff/material Security
  • 2.9 Protective Clothing for Stores
  • 2.10 Maintenance of Equipment
  • 2.11 Accounting for Stock
  • 2.12 Marshaling of Goods
  • 2.13 Discrepancies Investigation

Chapter Three

3.0 Research Methodology

  • 3.1 Research Design
  • 3.2 Research Design
  • 3.3 Population of the Study
  • 3.4 Sampling Method
  • 3.5 Determination of Sample Size
  • 3.6 Method of Questionnaire Distribution

Chapter Four

4.0 Data Presentation, Analysis and Interpretation

  • 4.1 Return rate of Questionnaire
  • 4.2 Analysis of Response
  • 4.3 Testing of Hypothesis

Chapter Five

5.0 Summary, Conclusion and Recommendations

  • 5.1 Summary of Findings
  • 5.2 Conclusion
  • 5.3 Recommendations
  • 5.4 Suggestion for Further Study
  • Bibliography
  • Appendix

Chapter One


1.0 Introduction

In the recent part, emphases was only on the balance sheet report without cognizance of other factors that made up the inflow and outflow of resource that sustain the mechanism of a given firm. with recent emphases on cost control in the face of the rising cost of input resources and subsequent spill over of high cost of purchasing and supply management in a manufacturing company.

After the civil war, the attendant from in production resulting from the growth of private sector enterprises from Europe and America began to awaken other management inputs for eventual profit. The reason is based on the sophisticated resources part in by these multinationals into the mechanism of our business sector.

It is imperative to note that the concept of purchasing has been broadened since the turn of the country, to include all those business activities relevant to the securing of materials suppliers and equipment as well as service needed by business and industries.

As at date, the cost of materials and supplies for industrial and non-industrial purposes accounts for a large proportion of the cost of these manufacturing company. In most of them, this represents over 65% of their total expenditure (Oyeoku O.K. 1993).

Therefore, purchasing is referred to as department which is concerned with the process of defining the manufacturing company’s needs selecting suppliers, agreeing terms placing orders receiving goods and function which is oriented to purchasing complete supply function which is user within the manufacturing company (R.E.J. Nwanneka).

English Oxford Advanced Learners Dictionary of current English, third edition, simply defined the world purchasing as just buying. We will however, take purchasing mission to be selection of materials or services agreement of prices and acquisition items. A well organized purchasing is one of the criteria for a company to minimize cost at the same time increases profit.

The impact of purchasing and supply management towards ensuring repaid growth in a manufacturing company’s cannot be over emphasized. It has been sampled and proved that, a layman in the field of purchasing easily views purchasing function as obtaining requisitions negotiating and placing order without the knowledge that purchasing goes beyond this areas of activities.

For a company to succeed or to achieve its desired objectives, it means that those required manning the materials section of the manufacturing company should be highly trained and knowledge in the field of purchasing. And other materials related functions, in order to harness effectives and efficient profitability to their manufacturing company. In view of numerous challenges of the profession requires a caber of persons that can exercise prudence and sound judgment for any naira spent at ay given point in time, in order to minimize cost and increase profit.

Sincerely speaking, these cannot be achieved of the buyer is not a professional buyer that should adhere, strictly to the ethics of the purchasing profession and techniques of purchasing practice. Quite unlike untrained buyer, a trance and professional purchasing executives is aware that he is bound by the ethics of the purchasing profession.

Therefore, his first and primary obligation is integrity in spending his company’s fund, showing professional competence in representing his manufacturing company outside etc. it is in line with this that the researcher tends to study the impacts using Nigeria Breweries company plc.


1.1 Background Of The Study

This general introduction cannot conclude without giving a brief description of the company used in this research.
The Nigeria Breweries plc in Nigeria dates back to thirties and is an imported technology, the indigenous drinks in Nigeria include palm wine, pitokaika, brukutu etc. through strike new in some quarters, beer is gradually replacing these traditional drinks in celebrations such as marriage, birth, ceremony, funeral which were seldom celebrated in the past beer.

The only way these indigenous drinks were promoted in the past was by the testing method, consumers then were allowed and even now to take various palm wine brought to the market by different producers and sellers and it s served as a means which determine consumer patronage decision. This is because palm wine and burukutu were generic not until recently that they were being branded. Bottled beer was firstly marketed in Nigeria by the Nigeria Breweries limited launched in 1949, thus marked the beginning of a buoyant industry that at present markets about six (6) brands of alcohol and non alcohol beverages.

Today social norms as they related to the use of alcohol in ceremonies have changed and beer is used instead. In some cases, they are exclusively used while in other for example social clubs, a particular brand may be favoured by established norms. The beer industry in Nigeria presently has matured into an interesting competitive market with about 28 brands of beer brewed by more than 27 breweries.

Nigeria Breweries plc, Aba makers of star beer, Guilder Maltina etc has embarked on many sales promotional activities of strategies have had a lot of impact on purchasing and supply management.

As reliably gathered these products do not have the problem other competitors products do have is because of well organized sales promotional activities. This is in line with saying that a community that sees it benefiting from a particular is bound to patronize such company.


1.2 Statement Of The Problem

The high inflationary trends records in Nigeria I recent times are never a thing of joy to companies coupled with the critical raw materials shortages, component, parts etc, and no complete autonomy given to purchasing and supply department to exercise full control over its function.

In some manufacturing company’s purchasing and supply department lacks competent trained professional that can effectively handled the task of buying what is required in the most economic manner with a view of increasing profit, knowing that purchasing contributes to profitability.

Likely in many other professionals continuous staff training has been of immense important for growth of effective purchasing, as a dynamic area of management disciple, requires well informed professionals that can keep abreast will the changing business environment in order to achieve success for the manufacturing company.

The problem of this research is to analyze the various areas of impact of purchasing and supply management toward profit and growth in a manufacturing company.


1.3 Objectives Of The Study

The objectives of the study is to prove that purchasing and supply management contributes toward profit and growth in a manufacturing company, purchasing and supply as a specialized discipline is meant to satisfy the materials need in a manufacturing company and it should not be seen as all comers affairs where anybody can come and do anything the way he want it.

Many public sectors of our economy have operated over the years but still deny the profession the rightful position it deserves. Lack of proper placement of his function in the bands of professional has contributed immensely to the flagrant wastage and unscrupulous diversion of manufacturing company fund into private purses, thereby increasing the cost of the overall output variable.

If is against this background that efforts should be made to ensure that there is no encroachment of other professionals into the purchasing activities. This is because purchasing as a profession has aims and objectives to be achieved and should not be seen as a gold wine where individual with little or on knowledge of the principle and practice of the function should encroach for selfish ends. Purchasing and supply, as a cost conscious department in any manufacturing company, ensuring that every purchasing made in the most economic manner so as to offer value for money therefore because the fundamental goals of efficient and variable purchasing science.

This means that manufacturing company that wants to remain in business must purchase material and component at the lowest cost consistent with quality and services requirements. In the same way, the quality and services of buying and maintaining inventory should be kept to the lowest level in order to achieve maximum efficiency with due regard to economy.

Understanding the fact that there are numerous advantages derivable from this management function, it becomes the researcher intention to look deeply into the various impact of purchasing and supply management towards profit creation and growth a manufacturing company and as such it is the objectives of this research work.

  1. Understand how Nigeria Brewery plc depot sees purchasing in its entire ramification.
  2. To find out the purchasing impact to a manufacturing company
  3. To further highlight any shortcomings that may be hinged through ignorance and other device
  4. This project is also meant to review the way profitability is being measured in Nigeria Brewery plc.
  5. It is also to determine the degree of interference (If any) by top management or other department on purchase materials.

1.4 Research Questions

  1. Does purchasing have any role to play in the manufacturing company?
  2. Is purchasing contributing to the profit in the manufacturing company.
  3. Is purchasing recognized in this manufacturing company?
  4. Is the purchasing manager solely responsible for buying materials and other items for your manufacturing company?
  5. Is the purchasing manage professional qualified in such areas the purchasing and supply management or is he/ she just qualified through job experience.

1.5 State Of Hypothesis

In this pact of the research study, the researcher would be concerned with the empirical testing of hypothesis.

  1. Ho: Purchasing impact does not improve the effacing and productivity of the manufacturing company.
    Hi: Purchasing impact improves the efficiency and productivity of the manufacturing company rejecting Ho and accepting Hi.
  2. Ho: Manufacturing Company does not permit the purchasing manager/ officer to make most of purchasing decision.
    Hi: Manufacturing company permit the purchasing manger/ officer to make most of purchasing decision.

1.6 Significance Of The Study

This study intends to the beneficial to three main categories of people that is. To the manufacturing company, the student and researcher.

To The Manufacturing Company

The findings of this study will acquaint it and shall also discover through this study a competent and well trained professional who can effectively manage and handle the taste of buying or purchasing in the most economic manner hereby increasing the profitability and growth of the manufacturing company and reducing waste.

To The Student

The findings of this study will enable the student to appreciate the course the more, it will also make them to be more economical, wherever they are to purchase materials, they must purchase materials in high quality, but at a lowest cost.

To The Researcher

The findings of this study will help the researcher the more, the advantages, impact of purchasing and supply management in a manufacturing company. To know or to indentify problems area in purchasing and supply function and develop strategies to solve item. The data gotten can be used for reference purposes.


1.7 Scope Of The Study

  1. The study is an impact of purchasing and supply management in a manufacturing company of Nigeria Brewery plc.
  2. The study was limited to the Brewery Company due to time and other resources constraints the staffers to the company whose works relate to this topic were interviewed.

1.8 Limitation Of The Study

The researcher in the course of carrying out his research work has contended some factors that limited in one way or the other against the zeal posed, they include the following.

Finance:

The research being a full time student at the time of making this research found it difficult to make ends needs with the little savings he made while working.

Time:

The researcher being a student and has a lot of academic work to pursue and some other things, has time constraint, instead of examine all the variables in purchasing n most of the notable industries, limits his study to only Nigeria Brewery plc.

Non- Response:

Most people interviewed were ignorant of what is called research, so they failed to give elaborate information about their manufacturing company despite the fact that the researcher told them that all information given would be confidential. Again, I found it very difficult to find good books relating to purchasing in the Federal Polytechnic Library, so I had to run round to many places for data collection of this undertaking.


1.9 Definition Of Terms

Logistics Management:

encompasses all materials flows, from the flow of purchasing materials into facility through the manufacturing process and out to the customer.

Hastening Stock Level:

It is the amount of stock expressed in units of issue at which it is estimated that hastening action in necessary to request suppliers to make early delivery.

Maximum Stock Level:

This is defined as amount of stock expressed in units of issue above which the stock should not allow to rise.

Minimum Stock Level:

This is defined as the lowest level expressed in quantity below which stock must fall.
Right quantity: This is defined as the value o amount of material that can be most economically purchased at a particular time.

Ethics:

It is referred to as a set of principles or values (what is right and wrong)

Quality:

It is referred to fitness merit and excellence.

Purchasing:

Is a managerial process that goes for beyond simple buying materials.


Chapter Five


5.0 Summaries, Conclusion And Recommendation

5.1 Introduction

This chapter is a very essential part in the research work because from this chapter any interested researcher or industry concerned will quickly glance through without many difficulties as this would act as a guild in the purchasing impact in manufacturing company.

This is why the researcher has carried out proper evaluative reference to the problem statement, its solution and objectives, in line with the above established fact. The researcher has view it necessary to reasonably draw conclusion, summary and make some meaningful and suggestive recommendations in this chapter.


5.2 Summary Of Findings

This research project is on the impact of purchasing and supply management in the manufacturing company with the reference to the Nigeria Brewery plc which has been in business for the past twenty years. The choice of this project could be attributed to the fact that Nigeria Brewery plc as a consumer oriented from exemplified by its product has continued to enjoy consumer’s patronage all these years. The achievement so far has been due, largely to the efficient duties carried out by those who have been manning the purchase /stores impact on the manufacturing company. The second chapter of this project direct on the review of the related literature of various authors in relation to the topic chapter four talks on the discussion and the findings. He also proves the need for purchasing specialist in such manufacturing company especially those fully qualified and are professionals as this plays in manufacturing company. The researcher also draws his conclusion and recommendations in chapter five.


5.3 Conclusion

The findings in this study, however, provides some support that purchasing impact is fully regarded as a majo function units in the Nigeria Brewery plc, and that it can be a source of increasing manufacturing companys profit. The findings equally revels that the presence of purchasing department throughout centralize in the manufacturing company plays a vital role towards the profitability of a manufacturing company a purchasing is given management status backed with adequate purchasing responsibilities in order to perform buying function efficiently.


5.4 Recommendation

A function that begin with clearly stated objectives at the end of application of all resources possible must deduce what has been achieved and that other things need to done.

In the right of the discussion and findings dust had, the researcher recommends that.

Staffing

More establishment of a separate purchasing department does not solve the problem. The department needs to be staffed with trained used in manufacturing company strategic decision making with regard to co-operate resource management. The company will know what business they are in and where they ought to be and whether they have the needed materials resources to be there. Adequate responsibility should be given to the purchasing personnel in the manufacturing company so that appropriate skills would be used in performing purchasing function.

Autonomy

Department so established and staffed must be given free hand to perform.

Purchasing Practitioners

The researcher in a self – criticism observes that conspicuous ignorance exists in manufacturing company as to the worth of purchasing. The blame party rests on the purchasing practitioners themselves. Much has not been done in terms of enlightenment crusade. Articles need to be written, journals and books need to published and seminars need to be organized.

Based on the above, the researcher tries to correct the impression in most public and private sectors that anybody can be a purchase irrespective of his area of specialization and that purchasing department is where money is spent and not made.

Recognition

This work recommends that Nigeria Brewery plc should recognize purchasing function not only by giving the separate department but by giving than full authority and responsibility.


The Impact Of Purchasing And Supply Management In A Manufacturing Company (A Case Study Of Nigerian Brewery Plc)


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