PURCHASING IN THE PRIVATE SECTOR(Taimacon Aluminum MFG. Co LTD)
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Purchasing is concerned with the “process of defining the private sector needs, selecting suppliers, agreeing terms, placing order and receiving goods and services. It is by it’s nature of service” function oriented to providing a complete supply service for users within the organization.Purchasing according to Oyeoku (1993) is referred to as function of business that enters into contracts with the privet sector suppliers and the final places orders with them. Where the function of procurement is emerged with that of store, the receive and pay for the goods and service in other to received on behalf of the private sectors. purchasing can also be define according to oyeoku (1993) as the act of accomplishing through identifying and comparing the suppliers as well as their supplier that are available to organization through the process of negotiation with the sources available to them with sole intention of arriving at an agreed term in order to limit cost and improve the organization profit.
According to Lyson (1984) he defines privet sector purchasing as that function that is responsible for obtaining by purchase, equipment, material, lease or other legal means, supplies and service required by an undertaking for production use.In this definition, the word purchasing has been used in an economic sense of definition the function of creating utilities goods and service that satisfy human wants.Purchasing does not confined to manufacturing output but also applied to even distributing, and services organization.
The importance of efficient purchasing to manufacturing organization cannot be over- emphasized, ‘that is’ it is to created efficient supply of equipment, fuel raw materials, component, power and other consumable service for use by industries.Long ago buyers where employed to buy production material without a proper research on market to obtain the right quality at the right price, and with a high increase of profit to organization.Today purchasers are trash to have privet sectors need in an efficient economical and wiser from for equipments to organization. This approach was only successful when services or goods are not many substitutes, when there was an abundant material and when many managers took resources for granted.
According to Baily (1987) organizational purchasing is the process by which privet sector define the needs for goods and services, and compare the supplies and suppliers available for them, and arrive at agreed terms of trading and make contracts and place orders, also accept, revise and pay for the goods and service supplied.The numerous diverse item that are constantly needed and when the quality of material influences the cost of manufacturing the final product, then an privet sector purchaser function becomes particularly very important and this demand close attention.Therefore public sector should realizes the fact that the buyers is the custodians of organization purser and hence economists are derived purchasing provide direct saving on cost and contribute to cash increase flow.According to the institute for supply management purchasing is defined as a major function of required material service and equipment.
1.2 HISTORICAL BACKGROUND OF THE STUDY AREA
Taimacon Aluminium MFG. Co Lt started out as an aluminium products manufacturer over 43 years ago, and expanded into other sectors such as food and spices, textiles and more. The group is committed to quality and highly adept in identifying new business opportunities and challenges. After Taimacon Aluminium, its flagship company, Taimacon Aluminium also established a textile unit, Kitex. The ScooBee Day and Trawellday Bags division under Kitex caters to the constant demands for school bags, travel bags and similar products. Saras Spices, launched in 1979, is a major player engaged in the processing and distribution of spices, branded curry powders and masalas. Taimacon Aluminium has always been focused on expanding its possibilities through diverse products and brand portfolio. From fast selling Aluminium utensils to much-in-demand anodized aluminium extrusions, Anna Group is consistently developing its potential. The company’s state-of-the-art manufacturing units produce Aluminium sheets which are in high demand in the construction industry
1.3 STATEMENT OF PROBLEMS
In recent years, it been notices that purchasing has not been accorded the statue which it deserve in privet sector.The major problem lies on the fact that in privet sector everybody wants to buy in purchasing decision. It is also surprising that departmental manager or heads contract for the purchase of raw material even as furniture and the general manager apart from the part he play when capital items are concerns is interested to know the particular vendor to whom the contract is awarded to the selfish interest.Company executives are not convincing of the procurement or service of an efficient and effective service render by purchasing department and the full benefit through purchasing department.
In some manufacturing the purchasing departments is not constituted with qualified people and therefore are not competent enough to tackle the trends in purchasing function.
1.4 OBJECTIVES OF THE STUDY
The researcher undertaking the study of the need for the efficient is purchasing and store management in privet sector.
It highlight the functions of purchasing which centers on the co-ordination and control of material costs and maximizing profit therefore the purpose of the study with special interest and the privet sector is narrowed down in the following point .
- To examine the caliber of staff employ for the performance of purchasing function.
- To ascertain the extend the purchasing important have been adopted
- To find out purchasing contribution of profitability and efficient running of the store management.
- To stress the importance of purchasing in an store management in privet sector.
- To find out the relationship between the purchasing and other department
1.5 SIGNIFICANCE OF THE STUDY
The importance of the study lies on the profitability contribution of the purchasing function to a firms operation especially in store management in privet sector where material and service account for about 85% of its total input as it know that 4%saving in purchasing can contribute the same amount and mark- up of 20% on sales.
The significance of the study derives the usefulness in the following ways.
- To the company, it will highlight them on the impact of purchasing in profitability.
- Students or anybody that does not have an idea of the role of purchasing function and it’s contributions to profitability. If come across this project will also gain and have the knowledge as well. And also use this project as a research book
- Finally, It is hoped that the findings and recommendation will help other organization to begin to accord purchasing and supply function recognition if they must make profit.
PURCHASING IN THE PRIVATE SECTOR(Taimacon Aluminum MFG. Co LTD)
