ROLE OF PURCHASING IN THE ACHIEVEMENT OF ORGANIZATIONAL GOALS
ABSTRACT
This topic, purchasing role in the achievement of an organizational goals has been chose in order to bring to focuse the explicit importance of purchasing in any business environment organization. Chapter one embrace the introduction background of study, objective of the study, scope of the study significance of the study and the limitations. Chapter two deals with literature review roles of purchasing on an organization, objective of purchasing and importance of purchasing in an organization Chapter three deals with the research design and methodology, introduction, research design, source/ method of data collection, population and sample size, sample techniques, validity and reliability of measuring instrument and also method of data analysis. Chapter four equally gives the findings, presentation and analysis of findings and discussion of findings. Chapter five on the other hands deals with the summary, conclusion and the recommendation. This project will be of immense important to student on research work, but most to student of purchasing and supply and colleagues in the field of purchasing and supply.
CHAPTER ONE
1.0 INTRODUCTION
The evolution of mass production which so much relieves upon a continue flow of right materials has brought an impact and the need to improve purchasing participles and management. Furthermore, the effects of shortage, high price of commodities and allied improvisation have caused the problem of materials and services to introduce into beard rooms of many organization be it large or small, public or private and even in government agencies. As a result of this cost of materials and supplies for industrials and non- industrials purpose account for large proportion of the cost of the organization expenditure. When purchased items accounts for such a high proportion of the organization expenditure, when prices of goods are fluctuating widely, when numerous diverse items are constantly needed and when the quality of the materials a services appreciably influence the cost of service than an organization purchasing role becomes particularly very attention. “(Oyeoku)”. The purchasing role is to see that material and services are provided at the lowest cost which is in correspondence with suitable quality and safty.
Purchasing must work with other department of the organization as it’s role involves other factors some prior or subsequent to the actual ordering. Those factors include the investigation and selection of sources of supply, working for alternative materials the expenditure or follow up order wide will eventually enable the buyers ensure prompt deliveries the transportation and packaging aspect. The transportation, storing and issuing the materials so received. It has thus becomes a complex function and needs the help of practitioners to be effectively carried out and required adequate training in purchasing and supply management techniques. Practitioners need to belong to the appropriate purchasing and supply institutes.
1.1 BACKGROUND TO THE STUDY
It is important to note that the institution is guided by purchasing manual bearing employed. Purchasing in federal polytechnic Nekede is an act of procuring materials, supplies and services to further the services rendered for the consumption of the public. The function has to be executed within the frame work of the law of the institution or the particular agency, which might be otherwise executed in the private sector without fear of running foul of the law. The institutional purchasing office has advantage, which is not available to those in the industry.
However the rector of the institution in recent years has given much attention to the direct contribution which purchasing activities can make to the savings of the federal polytechnic Nekede. The purchasing function has a whole wide lot to offer it cuts across all through the different department in federal polytechnic design engineering production, marketing, and finance, the maintenance of cordial relationship with these departments become increasingly important. Besides, the “quantity” “quality” and the time factors are usually defined for the purchasing department by these department or others that may be responsible for specifying procurement requirements.
1.2 STATEMENT OF THE PROBLEMS
The purchasing department play a very important role to the success of any organization whether in the public or private sector. The function is responsible for buying all the equipment, raw materials and supplies of the right quality of the quantity, from the right source, at the right time and at the right price. Successful purchasing depends to a large extent on the ability to understand the various environment in which they operates. The should be fully aware of all legal requirements relating to purchasing practices within their organization with particular to its activities in federal polytechnic Nekede Owerri. To solve this problems in purchasing especially with the external environment the need to understand the relationship among the most critical of the variables, constraints and premises that beat upon the objective sought is very important.
Purchasing decisions result out of research investigation and findings which is a vital aspect of a typical research. The purchasing manager or anyone concern with any branch of purchasing is faced with the problem of what to buy, where to buy form, at how much and in what quantity. This question can be answered when data has been collected and analyzed for dependable information. It is wise to undertake reliable research before decisions are taken because most of this decision are made under dynamic conditions.
1.3 OBJECTIVE OF THE STUDY
To use quantitative statistical analysis method to derive the purchase volume for nay of the sessions and if possible to ascertain the direct effect on contribution statement of any savings in purchase cost either directly in price or in efficiency of handling materials. Also, to define and evaluate the duties and performance of the purchasing unit and to review it’s methods of operation so as to recommend a better procedural operation for the unit.
To know of purchasing unit has fulfilled it’s mission buying the goods and services that will satisfy the desires of the user departments.
Purchasing objective can be divided into two main strains
General and specific objectives:
GENERAL OBJECTIVE
The general objective concern the task of obtaining the right quality goods and services in the right quality and at the right price and time from the right supplier and delivered at the right place. This is described as the “rights” of purchasing or more technically stated as the “purchasing mix”
However, these right may remain statements of intend and look static.
In today’s sophisticated and competitive markets, the environment is no more static but very dynamic. Obviously therefore, purchasing objectives will require to be constantly updated and revised so as to much the even changing conditions. It may be possible to obtain goods of the right quality but not at the right price. The situation is so because most good suppliers are usually the busiest as well as being the dearest as it relates in federal polytechnic Nekede.
SPECIFIC OBJECTIVE
Specific objectives on the other hand, tend to point at specific issue which will enable the institute to achieve specific results. These objectives are set and monitored so that any change in the circumstance is visited and corrected. This specific objectives are set through:-
(i) Producing purchasing budgets for materials requirements for a specific volume of output. This will be compared from time to time with that set by the sales and production departments over the trading period. Variations are reported and corrective
(ii) Preparations of standard material costs which will be related to the specific items which are based on the standard specifications and quantities of materials to be purchased. Variations in material price and detual price paid for them can then be easily ascertained and corrections effected accordingly.
(iii) Setting target for specific areas of activity mind monitor same from time.
It may possible to set a target aimed at reducing materials costs or even inventory quantity by a given percentage.
1.4 SCOPE OF THE STUDY
The project focuses particularly on the release of purchasing function as it relates to the federal polytechnic Nekede More of the information needed for the study were received from questionnaire and interview administration to various department in the institution especially the bursary division where the purchasing unit is placed in other to ascertain the relevance of purchasing function in the institution.
1.5 SIGNIFICANCE OF THE STUDY
The function performed by the purchasing department is concerned with the process of defining the organizations needs, selecting suppliers agreeing on terms, placing order and receiving goods and services. It is by its nature of a function oriented to providing a complete supply function service for users within the organization. In most manufacturing organization producing consumer goods, purchasing is of primary importance and must be considered as on the major functions alongside marketing, production and accounting. However, the importance of purchasing and its activity may not be the same for all organization. In manufacturing organization which materials and services account for about 85 percent of its total input, there is no doubt that purchasing will become a very important function since it is known that if percent saving in purchasing can contribute the same amount as a mark up of 20 percent on sales.
1.6 LIMITATION OF THE STUDY
A number of limitation are encountered in the process of writing this project.
Limitation simply means a point beyond at which something does not continue. So below are some of the limitation which are encountered.
TIME CONSTRAINT: At first when I was about to start the project, I felt that all was going to be easy, but later, I discovered that the time I had was not enough because I had to combine writing the project with normal day lectures. Another limitation encountered in the process of writing this project is also,
CORRECTION OF MISTAKES MADE: Due to the fact that there is no time to waste, I had to be a little bit faster so as to meet up with my project in the process I made some mistakes which was later corrected by my supervisor.
FINANCIAL PROBLEM: Financial problem was another limitation I encountered in the process of writing this project. For the fact that I’ m not doing anything to raise money to carry on with my project had to drop the work and continue with my study until money was sent to me by my parents in other to carry out some necessary research.
1.7 DEFINITION OF TERMS
(1) EVALUATION: To form an opinion of the amount, value or quality of something after thinking about it carefully
(2) AUTONOMY: The ability to act and make decision without being controlled by anyone else
(3) EXPENDITURE: The act of spending or using money
(4) INVESTIGATION: An official examination of the fast about a situation crime
(5) SOPHISTICATED: Having a lot of experience of the world and knowing about fashion culture and other things that people think are socially important
(6) PRACTITIONERS: A person who regularly does a particular activity, especially one that requires skill
(7) RECOMMENDATION: The act of telling somebody that something is good or useful or that somebody would be suitable for a particular job
(8) REMUNERATION: An amount of money that is paid to somebody for the work they have done
(9) OBJECTIVE: Something that you are trying to achieve
(10) SPECIFICATION: A detailed description of how something is or should be designed or made
(11) LIMITATION: The act or process of limiting or controlling somebody or something
(12) FLUCTUATE: To change frequently in size amount quality etc especially from one extreme to another
(13) IMPROVISATION: To make or de something using whatever is available usually because you do not have what you really need
(14) OBSERVATION: The act of watching somebody/ something carefully for a period of time especially to learn.
