Project Materials

PROJECT ON PROFESSIONAL SOURCING FOR MATERIALS A KEY TO SUCCESSFUL PURCHASING PRACTICE

Chapter one

Introduction

1.1 Background of the Study

The selection of a vendor is the most important aspect of the buying process and serves as an acid test for good purchasing. The process comprises ongoing monitoring of the relationship between the provider and the buyer in order to maintain mutually satisfactory levels of cooperation and interest. Uzor 2004.

Purchasing decisions affect not only a firm’s economic success, but also the livelihoods of suppliers and the overall efficiency of the economy. Sourcing is a key component of purchasing, and a buyer’s job is more effective when he works with a trusted supplier or suppliers.

The first stage of sourcing is frequently influenced by the buyers’ experiences with various providers. The buyer’s principal obligation is to identify and maintain a suitable source of supply in order to receive the appropriate material quality and pricing.

Any organization’s purchasing department should devote adequate time and resources to investigating and analysing current and future suppliers. They should conduct a continual assessment of the suitability and performance of suppliers to guarantee that they always deliver suppliers in accordance with specifications.

There are numerous benefits to supporting known suppliers, but commercial considerations such as the right price, time, and delivery to the right place dictate that buyers seek out all available sources of supply for the product range for which they are responsible.

Sourcing policies can and should vary. When sourcing, elements to examine include business activity, market segmentation and size, geographical scale of operation, and problem scope.

However, sourcing entails carefully seeking and surveying suppliers to ensure adherence to the buying company’s policy in terms of meeting the purchasing target, which is to purchase at the right time, in the right amount, from the right source, and at the right price.

To attain the aforementioned goal, the buyer must be trained in the technique and practice of purchasing sourcing, which is the responsibility of the trained professional who tries to get better commercial terms for his organisation.

This research will investigate how effective and efficient sourcing for goods and services can contribute significantly to achievement, ultimately contributing to the profitability of the buying organisation by lowering waste costs and osslence.

A brief history of Star Paper Mil Limited: It was started by one industrialist, Chief Nnanna Kalu, an ex-officer of the Federal Republic. The company began production of exercise book envelops, writing pads, and typing sheets, also known as stationery. By 1984, as the company grew, another production line was added, and the facility now produces serviette issues such as the serviette.

They produce around three types of double wrappers: blue wrappers and red wrappers. Their values change as the examination of production inputs advances. The board of directors manages the structure, while the managing director is in charge of communicating with the workers.

The board’s decisions are channelled through the administration in the person of the human resources manager, who also serves as the department head. The company employs a team of managers.

The HR manager. The chief accountant at both Aba and Owerri-Nta provides additional information about the engineers and technical support team.

The purchasing section reports to the production department. The many units of the corporation have their own purchasing officers for transportation, production, and so on, all of whom report to the unit’s general manager. Many of their raw materials are supplied locally through a small group of contractors.

Wages earned from waste products generated during the production of tissue papers are another source of raw materials. They buy their raw materials in bulk and store them in the house to eliminate operational risks and ensure continuous manufacturing to meet the demands of their many customers.

1.2 Statement of The Problem

Problems arise in determining where to acquire the best information about eligible potential suppliers, how to assess a supplier’s long-term stability, and how buyers should deal with the risks of 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 individuals should not be allowed to enter the profession.

The goal of this study was to create empirical data that could address inefficiencies, non-standardization of skills, and other problems related with the purchasing function, particularly in the areas of sourcing and source certification.

1.3 PURPOSES OF THE STUDY

It should be noted that sourcing, as an important and integral part of the purchasing and supply function, should always be implemented while keeping in mind that if we do not source efficiently for suppliers of the lowest price in the right time, quality of materials at the right time, quantity, and from source

it will affect the complete avoidance of awarding contracts to untrustworthy and incompetent people who will divert funds to their personal pockets.

For example, in most organisations, public personnel who had been placed in positions of trust misappropriated millions of naira into their pockets.

There were several examples of embezzlement of monies for critical necessities, particularly into their pockets. When they finally chose to buy commodities, they did it with a great deal of inexperience and negligence.

Professionals should be in charge of sourcing materials and providing services in accordance with their ethics and practices.

a. To emphasise the need of allowing only competent and knowledgeable persons to execute the duty.

b. To emphasise the need of allowing only competent and knowledgeable persons to execute the duty.

c. To demonstrate the importance of the sourcing function in purchasing by disclosing what is required and the level of persons who should be involved.

1.4 Significance of the Study

1. This study will educate researchers on the importance of effective and efficient sourcing, which is a critical component to success in the purchasing function. This will aid buyers in obtaining high-quality materials at the appropriate timing, price, and source.

ii Without this study, it will be difficult to assess how effective and efficient material and service sourcing contributes to the achievement of a more successful purchasing function, which in turn contributes to the buying organization’s profit ability by reducing waste, cost, and obsolescence.

1.5 SCOPE OF THE STUDY

This article covers the methods adopted by various organisations in searching, surveying, and evaluating the performance of suppliers in Nigeria; however, because to the vast range of population, the researcher limited the study largely to star paper mill.

Aba’s other organisations covered are airline Nigerian Limited, Aba AKARAKA Industries Limited, and Dunhill Industries Limited, for simple comparison and collecting.

1.6 RESEARCH QUESTIONS.

1 Is efficient purchasing an essential factor in determining your organization’s profitability?

2. What approach do you use to retrieve your component?

3 Are your buying officers professionally prepared, i.e. academically, or did they gain their experience on the job?

4. Is buying responsible for order placement and execution?

1 Is there a good relationship between the purchasing department and the other departments in the organisation in terms of material requirements?

1.7 Hypothesis.

Given the study’s aims, limits, and challenges, the researcher established a null and working hypothesis to ensure the correctness of the data collected during the research process.

During the study process, the researcher must verify the accuracy of the data collected. In carrying out the research, the researcher will employ both Null (Ho) and alternative (Ha) hypothesis to find out whether effective and efficient sourcing, a crucial to attaining a successful purchasing function, has an effect on the organisation.

HA; effective purchasing contributes to the organization’s profitability.

Ho; efficient purchasing does not increase the organization’s profitability.

HA; A friendly interaction exists between the purchasing department and other departments in the organisation in terms of material requirements.

HO There is no cordial contact between the purchasing department and other departments in the organisation in terms of material requirements.

1.8 Limitations of the Study

The researcher was mostly confined by the amount of available data; it was difficult to locate suitable resources for this task, thus the researcher had to run around various libraries in order to make a profit.

Finally, it was tough to convince respondents to take all of the questions, but they eventually accepted, despite budget and time constraints that the researcher subsequently overcomes.

1.9 Definition of Terms

The following terminology, as used in the context of this project, are defined here to help you understand the research. PURCHASING is defined as the management function in charge of procuring items through purchase. Lease or other material supplies and services required by an endeavour for use in production (i.e. utility creation) (Uzor 2004).

SOURCING involves selecting suppliers who are willing and able to give consistent quality, service (i.e. delivery, and price) (UZOR 2004).

RIGHT QUALITY; This represents the degree or grade of quality that is appropriate for a specific purpose (O.K. Oyeoku and R.E.J. Nwanneka 2001).

RIGHT QUANTITY; this refers to the total quantity used in a given period or the availability of items in relation to needs.
The right timing refers to when an order is placed to receive requirements at the lowest possible cost or when the requested requirements are to be delivered.

EXPECDITION; This involves expediting the delivery of purchased foods (according to BEN O NEKE) (COLLINS).

SPECIFICATION; A detailed description of any objective material or process that allows its maker to reproduce it identically.

LEAD period is the period between when an order is placed and when the supplier delivers the ordered item.