PURCHASING AS A COST SAVING FUNCTION IN A MANUFACTURING COMPANY

PURCHASING AS A COST SAVING FUNCTION IN A MANUFACTURING COMPANY

CHAPTER ONE

0.1 INTRODUCTION
This work has introduced purchasing as a cost saving function in a manufacturing company. It has endeavored to provide a breef insight to the readers and managers and students and professional men and woman in purchasing and supply management, what purchasing as a cost saving function should internal relationship that leads to understanding and harmony among the various units of the expected goal of the company.
The researcher should not or cannot conclude the introduction with out giving a brief description of one of the companies that is been used in this research. All basic produces Nigeria Limited Umuahia, producers of juice, Bottled water and satchet water is one of the numerous groups of companies owned by Basre Services Nigeria Limited at No: 14 Umugima Road, P. M. B 1736, Aba, Abia State which is controlled by an overall general manager. The umuahia factory is the researcher’s area of concentration, at all the types of soft drinks and bottle/sachet water ranging from Viral Sachet Water, Nnela Bottle Water 0.5., 0.7 and 1.5cl
The organization operates the purchasing department as follows.
a) Department A Buying unit
b) Department B Buying unit
c) Department C Buying unit
d) Department D Buying unit
The chief – raw – materials are sugar, water, chemicals, crown corn and lemon. The company started operation in 2002 with a single production line, producing only Vinel sachet water, Nuela bottle water 1.5 and later on, the company added the 0.7 and 0.5 bottle water being the current number of products. The company has depots in every state. For instant in Imo state, the depots are situated at No 2 Mbaise Road Owerri, Achingale Obowo, Isinweke Ihitte – Uboma, e t c. the products are distributed through two types of distribution system, group one are those appointed right from umuahia and are called first class white the second group are appointed by the distributors a second class under normal conditions and all things being equal, the company produces an average of (2) two thousand bags of sachet water per day 10 crates (carton) water per day working on two shifts.
ADMINISTRATION
The company is made up of five sections namely,
The production section, accounting section, purchasing Sections, stores section and marketing sections and which is headed by a general manager as the Administrative officer.
NB: THE PRODUCTION SECTION
The production department is headed by the production manager who plans the production process and controls the Inventory analysis. The work section which is under spare parts manager, performs the following functions
I. Maintenance and founding
II. Laborating and quality control
III. Industrial safety and Auxiliaries departments
 THE FINANCE SECTION
The chief accountant is at the helm of affairs and he is popularly called (fm) finance manager who in addition performs the following functions.
I. Plans the financial aspect of the company
II. Plans budget and control
 THE PURCHASING SECTION
The purchasing officer or the chief purchaser is at the helm of affairs in purchasing section and his activities covers.
I. Management
II. Buying
 Follow up / Expediting
III. Strategic planning and Research work
IV. Chemical activities
 THE STORES SECTION
The person that sees the helm of affairs of the stores unit is the chief stores officer affair. He performs the following activities
a) Holding, controlling and issuing stocks.
b) Control of all store house, materials handling functions
c) Quality control activities
d) Chemical Administration of stores operations.

PURCHASING AS A COST SAVING FUNCTION IN A MANUFACTURING COMPANY