EVALUATION OF THE PURCHASING STRATEGIES OF A PROFIT ORIENTED ORGANIZATION
ABSTRACT
Management and staffs of Nigeria Bottling Company wee considered in the investigation. Relevant data were collected through the use of questionnaire and oral interview designed to elicit useful information for this purpose.
Major findings were that:
1. Purchasing strategies have much significant roles to playing the profitability of the profit oriented organisation.
2. Nigeria Bottling Company buy and do not make their raw materials.
3. Nigeria Bottling Company practice a centralized buying policy.
4. Centralized purchasing is more profitable
5. Purchasing policies of Nigeria Bottling Company is cost effective.
Based on the findings of the study, the following recommendations were made:
1. They company should revise her purchasing strategies.
2. They should professionalize purchasing department.
3. They should allow flexibility in their purchase decision.
1.1 BACKGROUNDÂ OF THE STUDY
A couple of years ago, there has existed some controversies about what constituted the purchasing strategies as a specialized tool for profitability. These controversies arose among planners, students, business executives and a lot more people.
Those who recognized the purchasing functions have concluded that it had been existence since the evolution of man. To start with, purchasing is often used in Industry, comer, public corporations and managements to demote the act of material procurements, supplies, and services. It involves for money spend the term purchasing simply describes the buying. It involves determining the material need, selecting the suppliers arriving at proper price, or order and following up to ensure proper delivery. It also involves an understanding of the nature of forces that operate in the market place, that is demanded and supplied.
It was in the 19th century that purchasing took its pride of place management function. The function of purchasing is to ensure the supply of raw-materials, products, equipment, components, spares, fuel and power consumable and service for use or resale by an organization in the right quantities, right quality, right place, right time, and at the right economic cost for increase in profitability. There are other purchasing strategies which involves requirement determination, taking procurement decision make or buy, bidding, vendor supplier selection, negotiation contracting, other processing expecting taking delivery, material handling storage and distribution with in the organization.
Furthermore, purchasing strategies also covers areas like supplier development, value analysis and harmonious relationship with other functional units like production, design, engineering, inspection, maintenance, finance, marketing, personnel and transport departments. Purchasing uses some managerial tools viz planning, co-ordination, organizing, directing and controlling to achieve the objective of its functions of uninterrupted or constant flow of materials to meet the needs of the user departments.
This makes for the contention that the task is one of considerable complexity, involving large scale planning and organization, the co-ordination of a divers range of professionals, technical and other services and daily problems of business management.
Some organizations that have faint knowledge of what purchasing is all about regards it as a function concerned with clerical duties and services function whose concern Is to spend the corporate purse. Because of this notion in mind, the function is usually relegated to the background by attaching it under the supervision
