Effective purchasing planning as a cost reduction tool in the manufacturing industry

Description

ABSTRACT

This research is centered on organization with principal attention to planning for the attainment of organization goals the management of an organization is carried out through the aim of several people that comprises the procedure of achieving the mission through transmission of organization requirement in which individuals working together.

Management is a process by which the organization set objectives are achieved through coordinated purchasing staff efforts. Purchasing personnel management is that part of the process of management that is concerned with the maintenance of resources and ensuring the physical nature of materials and equipment being employed to contribute to organization profitability.

The research consist of five chapters which shows how purchasing planning serves as a tools for effective achieving the organization objectives.

The chapter one will consist of the introduction statement of problem, significant of the study, objective of the study, scope and limitation of the study, historical background of the company and definition of the term.

Second chapter shows the literature review and how each-author deals with the mentioned topic.

The third chapter also mentions about the research methodology instrument or tool used, research size, technical used in analysis data, testing of hypothesis.

The fourth chapter deals with data presentation and analysis of data, discussion of result.

Chapter five will be summary and finding, finding, recommendation, conclusions and references, questionnaires.

TABLE OF CONTENTS

Title of page

Approval page

Dedication

Acknowledgement

Abstract

CHAPTER ONE

• Introduction
  • Statement of problem

1.2    Significant of the study

1.3    Objective of the study

1.4    Scope of the study

1.5    Limitation of the study

1.6    Historical background of nigeria breweries plc ikeja lagos

1.7    Definition of terms

CHAPTER TWO

• Literature review

CHAPTER THREE

• Research methodology

3.1    Instrument or tools used

3.2    Research size

3.3    Technical used in analysis data

3.4    Testing of Hypothesis

CHAPTER FOUR

• Presentation of data

4.1    Analysis of data

4.2    Discussion of results

CHAPTER FIVE

• Summary of findings

5.1    Findings

5.2    Recommendation

5.3    Conclusion

5.4    References

Questionnaires

CHAPTER ONE

1.0     INTRODUCTION

Purchasing planning as a managerial function as really come a long way In the past when materials component, parts, energy etc. were abundant and available at ridiculously low prices, purchasing was not given proper chance to operate. That is, purchasing was looked upon as unimportant function. However, now that materials are in short supply there is generally an existence of what is called “GALLOPING INFLATION”.

This results to high prices of materials or unfriendly supply market, it will be very unreasonable for any business firms and induced government to ignore purchasing planning function.

Based on the above reasons, purchasing tends to play an important role in any business organization whether profit or non profit oriented. In a nutshell the project is about the needs for any organization to focus it attention on the importance of purchasing planning functions.

To a layman, purchasing means the process of buying raw material component, part and services. But in a broader sense, purchasing can be defined as the procurement of the right quantity, the right quality, of goods at price from the right sources and delivered in good condition to right location as and when required.

1.1     STATEMENT OF PROBLEM.

Despite the company’s contribution to the promotion of industrialization in Nigeria generally some problems still face the establishment. Some of these problems are not known to the public and as a result of this, people try to understand that it is only the problem of finance they are facing.

The problems discovered in this study are as analyzed below.

1. The product supplied to the consumer are far below the requirement of the The customers complained bitterly of not getting enough products when demanded.
2. The N.B Ltd did not have enough storage facilities to store the product produced.
   This was why they were not able to meet the demand of their numerous customers.

The establishment complained    bitterly    of being starved of money by the & government and also  government intervention since it is money that can enable

them to discharge their duties well to their customers.

• SIGNIFICANCE OF THE STUDY.

The primary objective behind the research is for the researcher to be able to fulfill the pre-requisites for the ward of professional in purchasing and supply, since the project forms as aspect of the course,the secondary objective in writing this research is that, the researcher has been waiting to directing attention is key performance is improving.

Therefore, clearly stated and will understand. Purchasing planning objectives are pre-requisites to purchasing measurement and evaluation.

Generally, purchasing planning objectives which are typical to many industries or  organization include:

1. Supplier Development.
2. Lowest total material costs
3. Maintenance of adequate quality
4. Continuous supply of needed materials component and services.
   • THE OBJECTIVE OF PURCHASING PLANNING FUNCTION

What are the objectives and responsibilities of the purchasing department unit?

The classical definition of purchasing planning objective is to buy materials and services of the right quality to the right quantity at the r right price from the sources at the right time and delivered to the right place.

The following are some of the objective of purchasing:

1. Advising other function on the suitability and availability of supplies to meet material needs.

b         advising of formulation  of all policies affecting or affected by the purchasing function .

c          Developing good relationship with other department thus creating greater efficiently and material trust, confidence and understanding .

d          carrying out all activities involved in purchasing function in an efficient and business manner .

1. Providing the organization with steady flow of materials to meet its needs and management at the material times.
2. Developing and maintain good relationship with both existing and potential suppliers to order create a reliable and confident services to the organization. This assists greatly in building up suppliers’ goodwill. “~

1.4     SCOPE OF THE STUDY

This study covers the activities of purchasing officers in a large retail organization as a case study of Nigeria breweries Plc Lagos, since the company is the overall controller of other distributors and departmental stores in the state. The facts collected in this project only covers the activities performed in the chosen organization.

1.5    LIMITATIONS OF THE STDY

There can not be any successful research of this nature without encountering some difficulties which might cause its success or failure. The following are some of the dangers encountered:

• Difficulties are some of the dangers encountered :-

some valid information relating to the object matter.

• Collection of relevant data is noted to consume

time and funds.

• Another problem faced is lukewarm attitudes of some officers who supposed to attend and give reasonable response. The occurred with the view that such
  a research can serve as a deterrent to items forgetting that it may be immense improvement in their performances.

1.6      HISTORICAL   BACKGROUND   OF   NIGERIA   BREWERIES   PLC IKEJA LAGOS.

The Nigeria breweries Plc Ikeja was incorporated on 16^th November 1946, under the companies ordinance, Cap. 36, as Nigeria Brewery Limited on 7^th January 1957, the name of the company was changed to Nigeria Breweries Limited in 1990, when the companies and Allied matter. Act of that year came into force, the name of company further changed to Nigeria Breweries Plc.

Nigeria breweries Plc is and interest in the quality of Nigeria breweries Plc was the imakes of Gulder, Maltina, Legend, Star, Extra Stout, Amsted Malta .

The company consolidated its principal activities of brewing during the year under review, Nigeria Breweries Plc brand remained very strong and well sought-after, with their strong equities ensuring our continuing broad leadership in the larger , and malt categories and stout segment differentiation during the year under review .

Nigeria Breweries Plc Lagos board consists of seven executives Directors and seven executive Directors (including the chairman).The board also has a formal scheduled of meeting annually meet full time in the course of the year review.

The issued and fully paid-up share capital of the company was 3,7,8,1, 203, 924 ordinary share of 50 kobo each.

According to Nigeria Breweries   the Lagos register  of member,   only Companies within the Heineken group having 2,045,630,426 share (representing 54.10%) Gold more than 10% of the issued share capital as at that date. The remaining I, 735,573,498. Shares were held by Nigeria citizen and association and the represent 45.90%. None of the Director has notified the company for the purpose of section 277 of the companies and allied matters Act Cap. 59, how of the federation of Nigeria 1990, of any discloseable interest in central with which the company is involved, either at 31^st December or as 9^th  April, 2003.

Nigeria Breweries has valid and subsisting agreement with the following organizations.

1. Heineken Technical Services B.V.
2. Premium Beverages International B.V.
3. Amstel Beverages B.V.

The agreement was covered by the National Official for technology Acquisition and promotion.

The company has 150 key distributors and wholesalers it products. Nigeria Breweries Plc Lagos.         Also provides employment opportunities to disable person. This goes beyond the need to ensure that there is no discrimination against disable person but also conies from a belief that they have a contribution to make in nation building at present, we have thirteen (13) disabled person in employees.

1.7   DEFINITION OF TERMS.

RESEARCH: The act of investigating to get facts about something from variety of sources.

2. RESEARCHE : The individual also undertake to carryout investigation to discover facts about something from many sources.

•     EXPEDITING:- The process of evaluating that goods ordered by the buyer and delivered at the required time to the correct place as promised by the suppliers.

4. EVALUATION: – Evaluation in purchasing is required to ensure that progress is being made toward objectives, according to plan of evaluation is part the control
5. PURCHASING REQUISITION : This document contain all the necessary information about the item or goods needed by the user department before being sent to the purchasing department.
6. INSPECTION: – This is the process of ascertain whether or not the goods delivered are of specified quality, quantity etc.
7. ENQUIRY: – Tin’s is an invitation to suppliers requesting him to submit price of goods and services.
8. BONDED STORES :- Bonded stores could be described or is used to describe goods held in a special store house on a separate exclusive within store house awaiting clearance by the inspection personnel
9. STOCK CONTROL: – Tin’s is the means by which materials of the correct quantity and quality is made available as and when required with due regard to economy in storage cost and ordering costs purchase price and working capital.
10. OBSOLESCENT: – An items said to be obsolescent when it is getting out of use but is not yet completely unusable.
11. OBSOLETE: – An item is regarded as absolute when it is no longer in use i.e completely out of use.
12. REDUNDANT; – When the quantity of an item in store is more than reasonably necessary to provide an adequate service to the production or operational activity, the excess over the normal holding is said to be redundant.

CHAPTER TWO

2.0    LITERATURE REVIEW.

According to peter  Druccaer (1961) described planning as the corporate planning as a continuous process of making entrepreneur decision, systematical  and the best possible knowledge or futuristic organizing , systematically  the effort    needed to carry out decision and measure the result against expectation through organized systematic feed back .

2.1    King Shorlt (1995) suggests that all purchasing planning is concerned with the review of ways and means of achieving given objective. This necessitates a listing of actions which need to be taken and resources required to implement the strategy which is selected. Furthermore, the plan should include a statement of standards of performance which are necessary in order that should the business be moving off course, corrective action be taken or the objective amended.

From the foregoing conclusion. We can draw the general conclusion that a different set of characteristic will identify the planning strategy development task the buying role. However, it is important to remember that the organization system and procedures which are developed will reflect e.g