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.
ii.  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,
iv.      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;
i.        The activities of
the workers in the purchasing and supply department inthe organization.
ii.      
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;
i.                   
Null hypothesis
ii.                 
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.
i.        Null 
Hypothesis
:
Purchasing management has impact on the productionactivities of coca-cola
Bottling Company.
ii.    Alternative Hypothesis: This slates
that: purchasing management has impact on the production activities of Coca-cola
Bottling Company.
2.  
   Null hypothesis: The second Ho and Hi
hypothesis stipulates that:
i.    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;
i.   oor purchasing
management is not the cause of failure in manufacturing industry.
Hi:     Hypothesis
stipulates that;

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

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