PROJECT ON PROFESSIONAL SOURCING FOR MATERIALS A KEY TO SUCCESSFUL PURCHASING PRACTICE
CHAPTER ONE
1.0 INTRODUCTION
The selection of a vendor is the most crucial concern in the buying process and an acid test of good purchasing. The process includes the continuing surveillance of the relationship between the supplier and the buyer to maintain mutually satisfactory condition of co-operation and interest. Uzor 2004.
In selecting sources of supply, purchasing makes decisions that influence not only a firm’s economic success, but also the livelihood of the suppliers and the efficiency of the entire economy.
Sourcing is an important aspect of buying and buyers job would be effectively done when he deals with reliable supplier or suppliers. The first stage in sourcing is often conditioned by the experiences of the buyers with various suppliers. The primary responsibility of the buyer is to seek and maintain suitable source of supply in order to ensure he obtains the right quality of materials and at the right price.
The purchasing department of any organization should allocate enough time and effort in investigation and evaluating present and potential suppliers. They should embark on a continuous appraisal of the suitability and performance of the suppliers to ensure they always deliver sup0plierrs to ensure they always deliver suppliers according to specification. There exist numerous advantage in supporting suppliers known to the buyer, but commercial consideration like – right price, time, and delivery to the right place dictate that buyers should seek out as a matter of routing all available source of supply for the product range for which they are responsible.
Sourcing policies can and must vary. Business activity, market segment and size, geographical scale of the operation and scope of problem are factors to considered when sourcing. However, Sourcing involves a careful seeking and surveying of suppliers in terms of ensuring adherence to the buying company’s policy as regards the satisfaction of the objective of purchasing which is to purchase the right time, in the right quantity, form the right source, and at right price. In order to achieve the above objective, the buyerr must be erained in the technique and practice of purchasing sourcing should be the responsibility of the trained professional who strives to achieve better business terms for his organization.
This project therefore, attempt to examine how effective and efficient sourcing for materials and service can contribute immensely to the achievement which will ultimately contribute to the profitability of the buying organization thereby reducing waste cost and osslence.
1.1 BACKGROUND OF THE STUDY
A brief history of star paper mil limited it was founded by one industrialist chief Nnanna Kalu can ex – officer of the federal republic. The company set – up in the production of exercise book envelops, writing pads typing sheets that is to as production of stationeries.
By 1984 as the company was progressing another production line was opened and the factory also produces napkin issues ie the serviette. They product about three categories of the double wrapper, the blue wrapper and the red wrapper. Their vary as the analysis is based on the input of production progresses.
The structure is managed by the board of directors and the managing director through whom the staff are reached. The decision made by the board are channeled through the and of administration in the person of the human resources managers who is also the head of the department. The company operate a with sets of managers. The human resources manager. The chief accountant both at Aba and Owerri – Nta pules other clues of engineers and technical support team.
The purchasing unit is under the production department. The various units of the company have their own purchasing officers for transport, purchasing officer for production etc all report to the hear of unit overall boss. Many of their raw materials are sourced locally though selected number of contractors.
Another source of raw materials is the wages gathered from waste products from the production of tissue papers. They buy their raw material in bulk which is stored in the house to avoid operational risk an gor continuous production to satisfy their numerous customers.
1.2 STATEMENT OF PROBLEM
Problems are encountered in deciding where one can find the best information on suitable potential suppliers, how do we assess a supplier long – term stability and how buyers can cope with the hazards of purchase decision.
These problems can however be solved by employing trained and professionally qualified buyers to handle the important task of sourcing. Untrained and unqualified persons should not be allowed to encroach into the profession.
The problem of this study was therefore to generate empirical data capable of addressing inefficiencies, in competencies non standardization and other deficiencies associated to purchasing function, mainly in the area of sourcing and source accreditation.
1.3 PURPOSE OF THE STUDY
It should be noted that sourcing being an important and integral part of purchasing and supply function should always be implemented while bearing in mind that if we do not source efficiently for suppliers of the lowest price in the right time quality of materials at the right time, in the quantity an from source, it will affect should be complete avoidance of award of contracts untrustworthy and incompetence people who would divert funds to their private purses. An example of this was the problem encountered in most organization were public officers were public officers who had managed to be placed in a position of trust, diverted millions of naira into their pockets. There were so many cases of misappropriation of funds for essential commodities especially into their pockets. When they actual decided to buy commodities, it was done with much inexperience and carelessness.
Source for materials and service should be left in the hands of professionals who would procure materials in accuracy with the ethics and practice of the professional.
a. To stress the importance of permitting only qualified and inform personnel to be involved in performing the function.
b. To stress the importance of permitting only qualified and inform personnel to be involved in performing the function.
c. To indicate the relivance of the sourcing function in purchasing there by revealing what is required and the quality of personnel who should be involved.
