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THE IMPACT OF PURCHASING MANAGING IN MANUFACTURING INDUSTRIES IN NIGERIA

TABLE OF CONTENT

Title page

Certification

Approval page

Dedication

Acknowledgement

Abstract

Tables of content

CHAPTER ONE

1.1     Introduction

1.2     Historical Background of Nigeria Bottling Company Plc Ilorin

1.3   Problem Identification

1.4   Objectives of the study

1.5     Significance of the study

1.6     Scope of the study

1.7     Limitation of the study

1.8   Hypothesis

1.9     Organizational Chart

CHAPTER TWO

2.0   Literature Review

2.1     Purchasing management objectives

2.2     Global Sourcing                                           .

2.3     The relationship of purchasing with other departments

2.4   Procedures of Purchasing

2.5     Purchasing Management Function

2.6     Problems of Purchasing Management in Manufacturing Industries

2.7     Purchasing Documents

CHAPTER THREE

3.0     Research Methodology

3.1     Population Size

3.2     Sample Size

3.3     Questionnaire

3.4     Primary Data Collection

3.5     Secondary Data Collection

3.6     Reliability

3 7     Validity

3.8     Statistical Method of Analysis

CHAPTER FOUR

4.1   Data Analysis and Presentation

4.2.1 Response to Questionnaire

4.2.2 Personal Interview with the Purchasing Executives

4.3   Interview with Head of Purchasing Management Department

4.4   Test of Hypothesis

CHAPTER FIVE

5.1   Summary

5.2   Findings/Conclusions

5 3    Recommendation

Appendix

 

 

 

ABSTRACT

 

As a result of unawareness of the impact of purchasing management in manufacturing industries, the purchasing management activities of some industries has turned to be uneconomical and unsuccessful significantly. So, the aim of this write-up is to provide a comprehensive coverage of the impact of purchasing management in a manufacturing industry. The objectives of this study is primarily to highlight the roles, problems and the foreseeable prospects of purchasing management, especially, in manufacturing industry of a prospective buoyant and dominant economy and to look into the activities of the management of the company in relation to purchasing of materials. The write-up reveals the test of hypothesis which contains the null hypothesis and the alternative hypothesis. The null hypothesis is rejected while the alternative hypothesis is accepted which states that purchasing management affects the productivity and profitability of a manufacturing industry. Therefore, it is recommended to manufacturing industries that high standard of business relationship should be maintained, competent performance of purchasing objectives should be set, and there should be efficient and efficient administration of purchasing management department in a manufacturing industry.

 

CHAPTER ONE

11     INTRODUCTION

Purchasing management: as a new profession is maiden to other professions like; Accounting, Marketing, Banking, Business Administration, Law and so on hence, its difficulty in acceptance in most organization today. Most practitioner in this field are non-professional and therefore do not know the principles and techniques involved in purchasing. The trained professionals are now finding it difficult because their positions have been occupied by people in Administration Accounting and other allied professions. To be a practicing purchaser one has to be trained in the arts and science of buying, it is only by this, that one can contribute effectively to the practicability of the organization.

In -most organization today, the cost of materials is the last remaining cost that is actually variable as all other costs are either fixed or tend to be semi fixed. Reduction in the cost perse would clear after the opportunity for profit improvement especially when material cost in a typical manufacturing .company represents more than 50% of total cost.

In order to realize all material cost factors, there must be a well co­ordinated and controlled system oriented material management department. Many people, even in other disciplines, think that buying is the same thing as purchasing.

Buying is, however, not the same as purchasing. Buying covers examining and auctioning purchase requisitions, obtaining quotations. Quotation analysis, purchase order or contract and ensuring that the company’s specification are metby the suppliers.Buying is a state of balance concept. Industrial buyers have often faced those who say that job of a purchaser is where many suppliers will be eliminated and replaced, few may be retained based on their performance

Other areas include; variety reduction, standardization, suppliersmarket research, pricing research, measuring and monitoring supplier performance. (supplier rating) and ensuring a. high degree of effectiveness in managerial performance.

However, purchasing takes place in diverse circumstances and in various undertakings in both the private and public sectors of the economy. The term “purchasing” is widely used in private sector, purchasing management include buying, interviewing, salesman negotiating with vendors, analysis bids, making, awards, selecting suppliers, issuing purchasing orders, making adjustments with suppliers and keeping appropriate records.

1.2    HISTORICAL     BACKGROUND.   OF     NIGERIA    BOTTLING COMPANY PLC ILORIN

Coca-cola first came to Nigeria in 1953, when Nigeria Bottling Company set up its first place in Lagos, it is Nigeria number one bottler of soft-drinks, selling more than 6 millions bodies per day.

Nigeria Bottling Company Limited, Ilorin the manufacturer of coca-cola was established at Ilorin in 1979. The existing story of growth and development particularly during the past 15 years was attributed to the efficient application of effective purchasing system in the industry.It was gathered from the reliable source that coca-cola product is the world leading soft-drinks sold in more than 145 countries.

However fanta is by far, the number one best seller in the orange segment and sprite is-the most widely sold Lemon-Lime drink in Nigeria. Other products bottled by Nigeria Bottling Company includes; Fanta, Ginger -ale, Fanta Tonic,-Fanta Soda, Fanta   Lemon, Schwepoes and Krest Bitter Lemon.

The manufacturing process of coca-cola product based on a. carefullymeasured combination of raw materials. The major raw materials are   theconcentrates which are being imported from foreign countries and also sugar,Water and carbon dioxide (Co2) which are manufactured locally and foreigncarbon dioxide are produced in large quantity by the company. Sugars are supplied locally by Basifa Sugar Comply, while some are imported from abroad.

The Delta Glass Company in Vglielli, Nigeria supplies the millions of bottles require to keep at larger Bottling Company in operate and grown products factories in Ijebu -Ode, also Kano manufactured crown to seal the bottles. The most efficient method used in issuing raw-materials to different section and sub-sections of the factory is the standard cost.They are used by a measure with which the actual cost can be ascertained and be compared. The method is most appropriate because its uniform in the accounting system.

Moreover, the factory makes use of labour intensive in their operation because human effort accounts for over 50% of the operation. As a result, N.B.C. employers over six thousand Nigerians in all fields of operation. The source were locally the junior staff are from the immediate environment while the senior staff-are directly from the head office in Lagos.

1.3.    PROBLEM IDENTIFICATION

In thisresearch work with NBC as a case study, the following was put into die   researchers   notice   as   problem   identification   which   the   purchasing management in the company is encountering are as follows:

i       The cost of carrying out purchasing management activities in the company.

  1. The financial resources of the company is not in the sufficient aid of thepurchasing management, activities of the company.

iii. Critical material shortages which seriously interfered with their orderlyproduction activities,

  1. There are so must stress and pressures on the purchasing managementof the company.

vThere are no sufficient mechanical .devices like computer, ‘adding machines., mechanical handling equipment and so on, to enhance its effectiveness.

 

 

1.4     OBJECTIVES OF THE STUDY

The objective of this study is primarily, to highlight the roles, problems and the foreseeable prospects of purchasing management especially in manufacturing industry of a prospective buoyant and dominate economy, such as Nigeria.

It is also, hoped that this write-up will examine the impact of purchasing management in manufacturing industry taking “NEC” florin as a case study. More so, the easy will in addition examine the following;

  1. The activities of the workers in the purchasing and supply department inthe organization.
  2. Assess the effect of activities of the management of the company in relation to purchasing and supply of their materials.

iii.     Make recommendation which will be used on the observation of thestudy.

 

1.5     SIGNIFICANCE OF THE STUDY

The researchers believed that the results obtained from this research work will look into the impact of purchasing management in cocoa-cola Bottling Compaq to anticipate, forecast the direction and intensity of changes in the environment and then adjust to these change.It will also be of help and guidance to scholars who may be reading or writing topic(s) relates to this study in future. This write-up is furthermore expected to play a crucial role in thedevelopment and growth of oilier related organization and the economy as awhole.

1.6     SCOPE OF THE STUDY

The scope of this write-up will be the purchasing department of Nigeria Bottling Company, Ilorin. It shall review the store unit the store keeper’s activities of the workers in the store to keep procurements.The products produced in the company shall also be examined. The opinionof the customers of the products will be sought and discussed.Additionally, efforts would be made to cover other departments like; finance, marketing and production to see how they have been affected.

1.7     LIMITATION OF STUDY

In carrying out this research work, there are some problems encountered of which are:

The collection of data information needed for the project work, the time is too short to write more elaborately and extensively, on the topic. There was also {he problem of finance logistic.

1.8     HYPOTHESIS

Hypothesis is something which is assumed to be true and may not be true oil which au argument may be based. In reaching a decision about a problem, we may attempt to make assumptions about the said term;

  1. Null hypothesis
  2. Alternative hypothesis

NullHypothesis : This is the one formulated within the hope of rejecting it, if it is not true, it is usually dominated by HO.

AlternativeHypothesis: This is the one formulated or to be accepted when thenull hypothesis are as follows.

  1. Null Hypothesis : Purchasing management has impact on the productionactivities of coca-cola Bottling Company.
  2. Alternative Hypothesis: This slates that: purchasing management has impact on the production activities of Coca-cola Bottling Company.
  3. Null hypothesis: The second Ho and Hi hypothesis stipulates that:
  4. Poor purchasing management is not the cause of low productivity andprofitability in manufacturing industry.

Alternative hypothesis: This stipulates that,

iii.     Poor purchasing management is the cause of low productivity andprofitability in manufacturing industry.

OR

Ho Hypothesis stipulates that;

  1. oor purchasing management is not the cause of failure in manufacturing industry.

Hi:     Hypothesis stipulates that;

  1. Poor purchasing management is the cause of failure in manufacturingindustry.

 

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Updated: October 1, 2017 — 1:54 pm

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