Purchasing Role In The Achievement Of An Organizational Objective

Project and Seminar Material for Purchasing and Supply PS

Purchasing Role In The Achievement Of An Organizational Objective


Abstract


Purchasing being a department that is responsible for procurement of all materials need in the organization and also making sure that all the materials procured are delivered on time to user departments in order to avoid stoppage of production.

In this research work, the contribution and roles of purchasing in the achievement of an organization are highlighted. Purchasing functions are not only to identify the organization needs, source for suppliers, select suppliers, place order, relieve goods, and deliver it to users department, it also contributes in the achievement of an organization through many techniques in order to make sure that goods produced are purchased at the lowest price that leads to increase in achievement of an organization.

These techniques are value analysis, decision materials are value analysis decision, materials management, suppliers source etc. all these are highlighted in this project.


Chapter One


1.0 Introduction

In the recent, part emphasis was only on the balance sheet report without cognizance of their factors that made up the inflow and outflow of resources that sustain the body mechanism of given firm. With recent emphasis on cost control in the face of the rising cost of input resources and subsequent spill over of high cost of output. It is very essential to discuss the contribution and roles of purchasing in the achievement of an organization.

After the civil war, the attendant boon in production resulting from the growth of private sector enterprises form Europe and America, began to awaken other management inputs for eventual profit. The reason I based on the sophisticated resources put 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 century, to include all those business activities relevant to the securing of materials supplier and equipment as well as services needed by business and industries. Furthermore, the evaluation of right materials has bought purchasing principle and management and its effect on storages high price of commodities and the allied improvisations have cause of problems of the materials and service to intrude into broad rooms of many organizations large or small public or private and even government agencies. As at date, the cost of materials and supplies for industrial and non-industrial purposes accounts for large proportion of the cost of these organization. In most of them, this represents ever 655 of their total expenditure.

Therefore, purchasing is referred to as the department which is concerned with the process of defining the organizations needs selecting suppliers, agreeing terms placing orders, and receiving goods and function which is oriented to providing complete supply function service for user within the organization. English oxford Advanced learners dictionary of current English, third edition, simply defined the world “Purchasing as just buying”. E will however, take purchasing mission to selected of materials or services agreement of process and acquisition items. A well organized purchasing is one of the criteria for a company to minimize cost at the same time increase profit.

The contribution of purchasing towards ensuring rapid growth of an organization’s achievement cannot be over-emphasized. It has been sample and proved that, a human in the filed of purchasing easily views purchasing function as more obtaining requisitions negotiating and placing order without the knowledge that purchasing goes beyond this areas of activities.

The activities purchasing have the primary purpose apart from procurement of right qualified from the right source at the right price. They distributed these materials or resources to the user department. To do this involves requirement determination, taking procurement decision make or buy decisions bidding, vender selection, negotiation, re-negotiation, awarding of contracts, contracting order processing, expediting, taking delivering, materials handling, storage and distribution within the organization.

For a company to succeed or to achieve it desired objectives, it means that those required to man the materials section of the organization should be highly trained and knowledge in the filed of purchasing. And other materials related functions, in order to harness effectives and efficient achievement to their organization. In view of numerous challenges of the profession requires a caliber of person that can exercise prudence and sound judgement for any naira spent at any given point in time, in order to minimize cost and increase profit.

Sincerely speaking, these cannot be achieved if the buyer is not professional buyer that should adhere, strictly to the ethnics of purchasing profession and techniques or purchasing practice. Quite unlike untrained buyer, a trained and professional purchasing executive is aware that he is bound by the ethnics of the purchasing profession. Therefore, his first and primary obligation is integrity in spending his company’s fund, showing professional competence in representing his organization outside etc. it is in line with this that the researcher tends to study the contribution and roles suing Nigerian Bottling company Plc.


1.1 General Overview Of The Study

This general induction cannot be concluded without giving a brief description of the company used in this reach. The Nigerian Bottling company plc. Producers of soft drinks or minerals in one of the numerous groups of companies owned by events Nigeria limited with their headquarters at Ikeja in Lagos state, which is controlled by an overall general manager.

The Owerri Plant, which is the rearcher’s area of concentration, is located along the Owerri-Onitsha road, off control post roundabout. The company produces assorted types of soft drinks ranging from Coco-Cola, Fanta orange Fanta tanic, ginger ale, club soda, sprite and krest bitter lemon.

The organization does not have a centralized purchasing department. They operate a decentralized system of purchasing. It has four different purchasing/stores limits/stores as follows.

  1. The various raw material sections.
  2. The spare and equipment section
  3. The various stationary section
  4. The finished product stores

The chief raw material; sugar chemical, crown cork and concentrates.

The company started operation in 1982 with a single production line, producing only fanta orange and later an added six (6) different products being the current number of products. The company sales coverage in Imo-State comprises, Owerri, orlu, Okigwe, Mgidi, Mbano and of course all part of Imo-State, like Umueneke ngor (Ngor Okpula Local Government Area) the products are sold though the two groups of distributors, group one are those appointed direct from Lagos and they are referred to as first class while the second group are appointed by the plant branch manager, is second class distributors. Under normal conditions and all things equal, the plant producer and average of 27 Thousand crates of minerals per day and work on two shifts.

Administrative

The company is made of five sections namely the production, the works section, the personnel section, the accounts section and the finished/sales section, which is headed by a plant manager is the administrative officer.

Production

The production division/section which is under the production manager plant the production process and controls the inventory analysis.

Works

The works sections what is under the spare parts manager performs the following functions:

  1. Plan the aspect of the company.
  2. Laborator and quality control
  3. Industrial safety and auxiliary departments.

Finance Section,

The account manager is not the job of the affairs and the reports to the plant manager and addition performs the following functions;

  1. Plans the financial aspect of the organization
  2. Plans and control budgets

The Sales Finished Products

  1. Plans the marketing and selling products.
  2. Logistics planning
  3. Sales forecast

The aim of this division is for efficient and effective operation. Though in some organization this does not obtain “thus” the purpose of operating a storehouse for these materials is distinctly different from that for savable goods.

The Stores,

The stores management lovers the following activities

  1. Holding, controlling and issuing the following activities.
  2. Control of all stores houses. Materials handling functions.
  3. Quality control activities
  4. Cervical administration of stores operation.

Plant Manager


1.2 Statement Of The Problem

The high inflationary trends records in Nigeria in recent times are never a thing of joy to companies, couple with the critical rain materials storages, component, parts etc; and no complete autonomy given to purchasing role department to exercise full control over its functions.

In some organizations purchasing role department lacks competent trained professionals that can effectively handled that task of buying what is required in the most economic manner with a view to increasing profit, knowing that any wise overall purchasing contributes to achievement like in many other profession continues staff training has been of immense importance for growth of effective purchasing, as a dynamic area of management discipline, requires well informed professionals that can keep abreast with the changing business environment in order to achieve success for the organization. It has become clear that organization must have an efficient and effective purchasing and supply function if they are to compete successfully with both domestic and international firms. The problem of this research is to analyzed the various areas of contribution of purchasing towards profit and growth of an achieving organization.


1.3 Objectives Of The Study

The objective of the study is to prove that purchasing contributes in the achievement roles as a specialized discipline is meant to satisfy the materials needs of an comers affairs where any body can come and do anything the way they want it. Many public sectors of our economy have operated over the years but 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 organization fund into private purse, thereby increasing the cost of the overall output variable.

It 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 individuals with little or no knowledge of the principles and practice of the function should encroach for selfish ends. Purchasing role, as a cost conscious department in any organization, ensuring that every purchasing made in the most economic manner so as to offer value for money therefore becomes the fundamental goals of efficient and variable purchasing science. This means that organization that wants to remain in business must purchase materials and components at the lowest cost consistent with quality and service requirements.

In the same way, the administrative cost of buying and maintaining inventory should be kept to the lowest level in order to achieve maximum efficiency with due to regard to economy. Understanding the fact that there are numerous advantages derivable from this management look deeply into the various contribution of purchasing towards profit creation and growth of an organization, and as such it is the objective of this research work.

  1. Understand how Nigeria Bottling Company Plc. Deport sees purchasing in all rainfication.
  2. To find out the purchasing role to the achievement of an organization.
  3. To further highlight any shortagings that may be hinged through ignorance and other device.
  4. This project is also meant to review that way achievement is being measured in Nigerian Bottling Company Plc.
  5. It is also to determine the degree of interference (if any) by top management or the department on purchase materials.

1.4 Scope Of The Study

  1. The study is on the contribution and purchasing role in the achievement of an organization of Nigerian Bottling Company Plc.
  2. The study was limited that Nigerian Bottling Company due to time and other resources raints the staffers to the company whose related to be this topic were interviewed.
  3. The study is standard in an achievement of Nigerian Bottling Company Plc.

1.5 Research Questions

  1. Does purchasing has any role to play in the organization?
  2. Is purchasing contribution to the profit of the organization?
  3. Is purchasing recognized in this organization?
  4. Is the purchasing manager solely responsible for buying materials and other items for your organization?
  5. Is the purchasing manager professional qualified in such areas the purchasing or is he/she just qualified through job experience?

1.6 Significance Of The Study

This study intends to be beneficial to there main categories of people that is the organization, the student, and researcher.

To the organization:

The findings of this study will acquaint. It and shall also discover through this study a competent and handle the task of buying or purchasing in the most economic manner hereby increasing the achievement and growth of the organization and reducing waste.

To 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, whenever they are to purchase materials, they must purchase materials high quality, but at a lowest cost.

To the research:

The findings of the study will help the researcher the more, the advantages, achievement of purchasing supply to an organization. To know or to identity problems areas in purchasing role function and develop strategies to solve them. The data gotten can be sued for reference purposes.


1.7 Limitation Of The Study

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

1. Finance

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

2. Time

The researcher, being a student and has a lot of academic work to pursue, and some other things, has time constraint, instead of examining all the variables in purchasing in most of the notable industries. Limits his study to only Nigeria Bottling Company Plc.

3. Non-Response

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


1.8 Definition Of Terms

Logistics Management:

Encompasses all material flows from the flow of purchased 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 esmented that hastening action in necessary to request suppliers to make early delivery.

Maximum Stock Level:

This is defined as the 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 not full.

Right Quantity:

This is defined as the value or amount of materials that can 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 far beyond simply buying materials.


Purchasing Role In The Achievement Of An Organizational Objective


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