IMPACT OF A GOOD BUYER/SUPPLER RELATIONSHIP TO THE PURCHASING AND SUPPLY CHAIN MANAGEMENT

IMPACT OF A GOOD BUYER/SUPPLER RELATIONSHIP TO THE PURCHASING AND SUPPLY CHAIN MANAGEMENT

ABSTRACT

The primary goal of this project is to learn about the importance of a strong buyer/supplier relationship in purchasing and supply chain management. This study seeks to determine whether the company has a positive (cordial) relationship with its suppliers and product buyers. Certain reasons, such as ineffective sourcing, a lack of specialists in the field, neglect of purchasing and supply functions, and document falsification to undermine the profession’s reputation, were identified as problems in this study. Based on these findings, it is recommended that several forms of sourcing be employed to determine which is best for the organisation, and that purchasing supply professionals be consulted.

Chapter one

Introduction

1.1 Background of the Study

A Brief History of Star Paper Mill Limited.

It was formed by one industrialist, Chief Nnanna Kalu, a former Federal Republic officer. The company was founded in 1977, with a facility in Aba dedicated to the production of exercise books, envelops, writing pads, and typing sheets, or stationery.

By 1984, when the company began to grow, another production line was established, as well as a facility in Owerenta for tissue paper production. The tissue paper mill also makes serviette tissue, or serviettes.

They created around three types of the product: unique white or double wrapper, blue wrapper, and red wrapper. Prices fluctuate in the end analysis based on the input of the production process.

The structure is administered by the board of directors and managing directors, who communicate with the workers. The board’s decisions are channelled through administration, which is represented by the human resources manager, who also serves as the department’s leader.

The company employs human resources managers, a production manager, an administration manager, and a chief accountant in both Aba and Owerenta, as well as engineers and technical support teams.

Its other divisions are in Abuja, Onitsha, Lagos, Kaduna, and Kano. These divisions serve as both serving points for finished items and collection centres for raw materials such as waste paper.

The purchasing section reports to the production department. The company’s numerous units each have their own purchasing officer, such as the purchasing officer for transportation, the purchasing officer for production, and so on, who all report to the overall boss of the unit.

Many of their raw materials are procured locally via a selective tendering method in which invitations are sent to a small number of contractors. Another source of raw materials is waste collected from stationery products

which adds value to the production of tissue papers; they purchase raw materials in bulk and store them in the storehouse to avoid operational risk and to ensure continuous production to satisfy their large number of customers.

1.2 Statement of the Problem

The challenge commonly connected with this search is efficient and effective sourcing. A fundamental to obtaining a successful purchasing function is twofold: sourcing in organisations in both the public and private sectors of the economy, and attaining purchasing with sourcing in both the public and private sectors of the economy.

With dismay, one realises that practically every employee in an organisation is involved in mismanagement and squandering public or taxpayer money; contracts are arbitrarily inflated, as are production-related supplier costs, all of which contribute to the current high cost of living.

Problems arise while selecting where to acquire the greatest information about eligible potential vendors. How can we judge a supplier’s long-term stability, and how can buyers deal with the risks of buying from start-up companies that lack a track record to aid in their purchasing decisions?

These issues can, however, be addressed by hiring trained and professionally certified buyers to conduct the critical role of sourcing. Untrained and unqualified purchasers should not be permitted to enter the profession.

According to Mr R. E. J. Nwannka, a senior lecturer in the department of purchasing and supply management, in one of his articles in purchaser 1999, pg 19 which he captioned “purchasing and supply profession

The way forward 1999,” he aptly referred to people who encroach into the profession without adequate knowledge and experience as uniformed generals in purchasing practice whose only interest in forcing and bulldozing their way in through the purchase seat is to che

One of the problems related with purchasing is neglect, in which purchasing as a profession has not been given a prominent place in organisations. In some organisations, it is considered a regular, inconsequential duty, whilst in others, it is regarded as a key management role that significantly contributes to profitability.

It should be highlighted, however, that in current times of high material prices and shortages, inflation, and an unpredictable supply market, it is not advisable for any corporate organisation to overlook purchasing and supply activities.

There is also a shortage of specialists in the subject. This has led to incompetence and inefficiency in the purchasing and supply functions. The acquisition of goods and services is handled by skilled professionals. They would use their knowledge and experience to source products and services in an efficient and effective manner.

1.3 PURPOSES OF THE STUDY

It should be noted that sourcing is a critical component of purchasing and supply. If it is done properly and successfully, the purchase goal of getting the lowest price from the best quality supplier will be met. The study’s purposes are:

a) Analyse and identify the approach that drives an organization’s effectiveness in raw material sourcing.

b) To highlight how organisations source raw resources.

c) Make recommendations as needed to improve the industry’s raw material purchasing system.

d) To demonstrate the importance of the sourcing function in purchasing, revealing what is necessary and the capabilities of the persons who should be involved.

e) To investigate the infrastructure required for effective raw material purchase management.

1.4 Significance of the Study

This study will introduce the researcher to the importance of effective and efficient sourcing, which is critical to a successful purchasing function.

It will also aid the customer in receiving the appropriate material at the right time, in the right quantity, from the right source, and for the right price.

This research so seeks to investigate how effective and efficient sourcing for products and services might contribute to the buying organization’s profitability while decreasing waste, expense, and obsolescence.

1.5 RESEARCH QUESTIONS.

In doing this research, the following questions were addressed:

i. Do poor sourcing decisions cause to issues at Star Paper Mill Ltd Aba?

ii. How can customers deal with the risks of purchasing from a startup company?

iii. Does assessing the supplier’s long-term stability cause problems or help?

iv. How does one pick where to get the greatest information on possible suppliers?

1.6 Hypothesis.

This investigation is guided by the following testable null and alternative hypotheses:

i. Ho: Sourcing will have no good effect on purchasing and supply chain management.

ii. Hi: Sourcing will have a favourable impact on procurement and supply chain management.

1.7 Scope of Study

This article examines the procedures used by numerous organisations in Nigeria to seek, survey, and evaluate the performance of suppliers, with a focus on Star Paper Mill Ltd Aba, Akaraka Industries Ltd Mbaise, and Dunhill Industries Ltd Mbaise.

1.8 Limitations of the Study

When doing this investigation, the researcher encountered some defaults. Due to time constraints, the researcher was unable to visit or contact the company or libraries regarding various tasks that needed to be completed at the time.

Furthermore, the research project was not fully financed due to budgetary constraints; most of the company’s employees were so busy that they were unable to devote the time allotted to data collection and analysis.

The power Holdings’ continuous disruptions of illumination had an impact on the progress of this research. Domestic activities had a significant impact on the progress of this research study, as it was the first time searching for and composing a project.

1.9 Definition of Terms

1. SOURCING: Is described as the process by which a buyer or purchaser searches, surveys, and finally analyses suppliers in order to set policies that pertain to those who can best meet the needs of this endeavour.

2. QUALITY: This refers to all of the traits and attributes of a product or service that affect its capacity to meet stated, provided, or implied needs.