REQUIREMENTS FOR CHARTERED INSTITUTE OF PURCHASING AND SUPPLY CHAIN MANAGEMENT OF NIGERIA
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REQUIREMENTS FOR CHARTERED INSTITUTE OF PURCHASING AND SUPPLY CHAIN MANAGEMENT OF NIGERIA
Chapter One:
Introduction
Background of the Study.
Management is on the approach of making a significant breakthrough in understanding how the interplay of information, materials, money, manpower, and capital equipment affect the success of industrial and public organisations (Forrester 1958).
Supply chain management is complex because it accounts for 80% of their revenue, which includes purchased goods and services (CIPS, 2013). Procurement is a critical component of the supply chain that determines the success or failure of public and commercial organisations.
Public institutions and state-owned firms must buy goods, services, and works in order to carry out their responsibilities and tasks. The total amount of public procurement, which is the government activity of purchasing commodities, services, and works, is reported in all countries throughout the world.
The financial operations of government procurement are estimated to be between 10% and 30% of GNP. On the other hand, acquisitions of outside goods and services have traditionally played a key role in the corporate cost structure, accounting for up to 80% or more of the total cost of items sold in some industries (Matthew G. Anderson and Paul B. Katz, 1998).
Public procurement has evolved into a highly complex government function that accounts for a significant portion of public expenditures (which can reach 70% of total government expenditure, according to numerous World Bank reports) and procurement expenditures (or “spends,” as used in numerous reports and publications).
Public procurement accounts for around 15% of global GDP (Development Assistance Committee, 2005). It is also estimated that public procurement accounts for 9%-13% of the GDP of emerging countries.
Public procurement accounts for 58% of total spending in Angola, 40% in Malawi, and 70% in Uganda (Thai, 2001). In Nigeria, public procurement expenditures account for the vast majority of the annual government budget.
It required 64% of the annual budget, or 15% of GDP (PPD Report, 2014). In general, both public and commercial organisations rely heavily on procurement.
Currently, the majority of procurement processes in public and private organisations are carried out through a bid/tender method. Even if one of the primary goals of procurement is to lower costs through competition
promote transparency, protect public and private finances, and reduce and eliminate corruption, the bid/tender method has numerous problems in meeting the needs of organisations.
Public and private organisations have similar value for money, but they differ in terms of acquiring products and services through long-term supplier relationships, which are critical for procuring quality goods and services, reducing delivery time, and lowering costs while maintaining transparency and accountability.
However, in today’s economic environment, every company must build strong, mutually beneficial partnerships with strategically chosen partners. The longer the connection lasts, the better for everyone involved.
The benefits include improved performance, increased cost efficiency, and assisting firms in developing. The ultimate purpose of governmental procurement and business enterprises’ purchasing systems is to spend money efficiently and properly in order to get the best value for money.
1.2 Statement of the Problem
The notion of a competitive bid/tender-based procurement system is recommended in order to buy goods and services that provide value for money, however it is not consistently implemented. It is referred to as adversarial practice.
According to (Shapiro, 1986; Amihud, 1976; Marquardt, 1988) as quoted by (Joseph P. Cannon Christian Homburg, 1988), adversarial techniques entail bidding procedures that pit numerous suppliers against one another in an attempt to drive down prices.
The conventional antagonistic relationship is defined by a price focus and short-term contracts. This combative relationship is mostly centred on cost breakdown.
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