Quality Control And Inspection Of Purchased Materials

Project and Seminar Material for Purchasing and Supply PS

Quality Control And Inspection Of Purchased Materials


Abstract


The application of the principal of quality control and inspection of a product is essential to any company’s future development and it is of increasing important if a company is to survive under increasing competitor and constant demand for more consistent and reliable product. The progressive manufacturing industries realign the contribution of quality control of quality of materials purchased.

Therefore, it is essential controlling the quality of materials supplier since the helps to a great extent in increasing the profitability of the firm. This is because if materials supplied do not measure up to the specification wanted and if the faults are not detected before feeding them into the reproduction plants, the will affects the quality of materials manufacture by the company. This will not only mean waste of money but also disruption in production lines, reductions of sales. Lowering of the reputation of the company concerned, and the items require may be in short supplier this will obviously affect the company adversely.

Knowing the right quality material required, the specification and standardization, selecting the right supplier for the quality required; inspecting the materials purchase and a list of there are important in controlling quality of martial purchased.

This will deals with in detail in chapter one which is the introductory part of the review of the related literature of the work chapter two is concerned with the review of the related literature of work the chapter thee is the methodology it discuss the method of data collection chapter four the analysis of the data collected and data discussion while chapter five is the summary, conclusion and recommendation.


Chapter One


Introduction

1.1 Background of the Study

Quality control and inspection of materials is becoming of vital importance in every pharmaceutical industry today become of the hung sum of money involved in the procurement of materials.

It is known that over half of every pharmaceutical company’s budget is on materials. It is therefore necessary that materials which meet the quality required are purchased.

The buyer, as a specialist, must function in one of the more sensitive areas of quality control and inspection since he represents his organization in the definition, negotiation and implementation of a legal contact- the purchase order.

Quality is a basic concept in modern buying and selling and is taking a high degree of priority in materials requirement.

In many application, the performance specification is very rigid and call for careful quality control and by inspection by both the buying company and the selling company.

Quality control and inspection of materials includes among other things

  1. The organization and procedure through which a producer measures and control the quality of the product manufactured.
  2. The on-site checking of the manufacturing process.
  3. The inspection and acceptance of the party materials and spares.
  4. The assurance of compliance on the part of the supplier with specified quality levels.
  5. Co-operating with vendors on quality problems.
  6. The handing of rejects materials
  7. The final and accounting aspect of rejection.

Quality control and inspection is the responsibility to some degree of the user department in an organization.

However, the buyer has the basic responsibility of adequately and accountably specifying the quality requirement of materials purchased especially when material concerted are not too technical in nature.

In turn, the supplier has the basic responsibility of satisfying the quality requirement in conformance with the mutual agreed price and time schedule.

The British standard institution defines quality more precisely as:- “The totality of features and characteristics of a product or services that bear on its ability to satisfy a given need”.

Deniability is an extension of quality it the ability of an item to perform required function under stated conditions for a stated period of item. Reliability can be expressed as a probability that a product will operate satisfactorily for the stated period of time.


1.3 Statement of Problems

In recent years, it been notices that purchasing has not been accorded the statue which it deserve in organization.
The major problem lies on the fact that in an organization everybody wants to buy in purchasing decision. It is also surprising that departmental manager or heads contract for the purchase of raw material even as furniture and the general manager apart from the part he play when capital items are concerns is interested to know the particular vendor to whom the contract is awarded to the selfish interest.

Company executives are not convincing of the procurement or service of an efficient and effective service render by purchasing department and the full benefit through purchasing department.

In some manufacturing the purchasing departments is not constituted with qualified people and therefore are not competent enough to tackle the trends in purchasing function.


1.4 Objectives of the Study

The researcher undertaking the study of the importance of efficient purchasing in manufacturing organization.
It highlight the functions of purchasing which centers on the co-ordination and control of material costs and maximizing profit therefore the purpose of the study with special interest and the manufacturing organization is narrowed down in the following point .

  1. To examine the caliber of staff employ for the performance of purchasing function.
  2. To ascertain the extend the purchasing important have been adopted
  3. To find out purchasing contribution of profitability and efficient running of the organization.
  4. To stress the importance of purchasing in a manufacturing organization
  5. To find out the relationship between the purchasing and other department

1.5 Significance of the Study

The importance of the study lies on the profitability contribution of the purchasing function to a firms operation especially in a manufacturing organization where material and service account for about 85% of its total input as it know that 4%saving in purchasing can contribute the same amount and mark- up of 20% on sales.

The significance of the study derives the usefulness in the following ways.

  1. To the company, it will highlight them on the impact of purchasing in profitability.
  2. Students or anybody that does not have an idea of the role of purchasing function and it’s contributions to profitability. If come across this project will also gain and have the knowledge as well. And also use this project as a research book
  3. Finally, It is hoped that the findings and recommendation will help other organization to begin to accord purchasing and supply function recognition if they must make profit.

1.6 Research Question

In the bid to achieve the objectives of this research work, the following research questions will be treated, thus;

  1. Does the role of the purchasing agents enhances the organizational needs for selecting suppliers, agreeing terms placing orders and also receiving service?
  2. Does the role of purchasing regarding to negotiation of the right price for the goods influences the productivity of the organization?
  3. Does the function of purchasing involve ensuring that goods arrived at the right time and place?
  4. Is effective purchasing power necessary for the purchase of raw materials used in the manufacturing industries?
  5. Does efficient purchasing ability promote the profitability and productivity of a manufacturing organization,
  6. Does purchasing ensure good source of supply?
  7. Do purchasers help in the evaluation of potential supplier before dealing with them for agreement into continuous supply of material to the organization?

1.7 Research Hypothesis

In the course of this research work, the following hypothesis will be tested, thus

  • Ho: There is no significant relationship between effective and efficient purchasing ability and the profitability of manufacturing industries.
  • HA: There is significant relationship between effective and efficient purchasing ability and the profitability of manufacturing industries.

1.8 Scope of the Study

The scope of this researcher work comprises all the factors that ensures efficient purchasing within the manufacturing organization. For the sake of coherency, specification, and distinctive, the study has chosen as a case study the Nigeria Bottling Company coca cola plot 82 industrial layout trans amadi Port Harcourt though the findings can vividly and validly be applied to all the business organization at large.


1.9 Limitation of the Study

The important limitation on this research factor is the time involvement in gathering facts and compilation especially the examinations the researcher are having other factors include financial problem, lack of text books and as well as the attitude of respondents in dividing information term as “classified”


1.10 Definition of Terms

It is pertinent to state here that words have meanings and there meanings are different according to their usage either directly or indirectly

Specification

This show the details description of service materials, parts and components to be used in manufacturing organization

Purchase Requisition Note

This is a document used by an authorized person in a company requesting the purchasing department to order or purchase particular items, materials stating the require quantity and quality

Local Purchasing Order [LPO]

A document used by a buyer to the supplier for ordering the supply of specified goods and service are generally specifying the quantity required and the price.

Quality Assurance Scheme

This means the process involved in ensuring that right quality materials are obtain in carrying out purchasing activities.

Vendor Appraisal

This is act of assessing the supplier capability to comply with organization specification.

Quotation Chart

This is a chart that shows supplier quotations on how they are evaluated and in most cases it also show the supplier that won the contract.

Goods Receive Note [G.R.N]

This represents a document that shows the receipts of goods from a supplier

Supply Market

This show the means on how different sources of supplier desire can be selected

Supply Markey Research

The process of examining the actual and potential sources which constitute a supply market.

Sourcing

This entails a proper identification of suitable source of supply or supplier

Contract

This refers according to the study that show the agreement reached by an organization purchaser and the supplier for supply of material component.


Chapter Five


Summary, Conclusion and Recommendations

5.1 Summary

This project has looked into the importance of efficient purchasing in a manufacturing organization by review the purchasing activities in the organization.

The researcher have carefully and systematically, survey, studied and analyzed the numerous variable standing as impediment towards the attainment of efficiently in purchasing activities in manufacturing organization.

Chapter one highlights the objectives of the study with the view of making suggestion. Chapter two deals with the importance of efficient in the purchasing department. Chapter three deals with the Methodology of the study, stating the research design and determining the population size. It also stated the statistical tool used in the analysis of data with its formula.

Chapter four is the analysis and interpretation of data collected, while the final chapter gives some usefully suggestion and recommendation as to improvement in the purchasing importance in the organization.


5.1 Conclusion

The importance of efficient purchasing in a manufacturing organization as said earlier cannot be over emphasized the purchasing importance is increasing and is become a specialized management function and every purchasing activity should be through research, judgment and decision.

In this project, the importance of efficient purchasing in a manufacturing organization has been designed to highlight what is practiced or carried on as activities in purchasing with a view of marking suggestion on improvement and finial instructing on better ways of carrying out the purchasing activities.

This study has also brought to limelight the importance of efficient purchasing as legalized way of were cost can be curtailed and profit made.

It is note worthy therefore that all those engaged in purchasing importance in quality professional in whatever capacity recognize the need for a professional approach to the importance of any purchase material to organization.

The trend towards efficiency and effectiveness on purchasing management, places a heavy responsibility upon the organization of the purchasing personnel.


5.3 Recommendations

The purchasing importance must be oriented towards the overall policy and objectives of the organization in order to make an effective contribution to the organization of which it is a part. Hence, purchasing responsibilities should be well define to ensure effectiveness and smoothness is operation within the organization

In effect, the research, after studying the purchasing importance the researcher decided to make the following recommendations.

  1. The purchasing department should have its own budget. Also the purchasing officer /executive should be involved in budgetary preparation and control especially as it concerns the purchasing department.
  2. The organization should engage its employees (purchasing) training and development schemers. This is necessary because it is dynamic function and therefore those that perform the purchasing activities should work in accordance with the trends.
  3. Management should ensure that suppliers are paid promptly so that they will be more determined to business with them and with this it enhance production.
  4. The organization should recruit professionally qualified personnel to man the various activities involved in the purchasing importance. It also ensures that to her sections that are material oriented in the organization have suitable qualified personnel in other to perform their duties creditable. Such qualification can be inform of possessing the following.
    1. As PS certificated of the institute of purchasing and supply management, London or Nigeria institute of purchasing and supply management (NIPSIM).
    2. National Diploma in purchasing and supply obtained for many of the accredited institution.
    3. Higher national diploma in purchasing and supply from many of the accredited institution of higher learning.
  5. Finally, the researcher would advise management to allow the purchasing department to be buying all the material including the raw material needed by the manufacturing except for some capital items which the management can better decide upon.

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