1.1 Introduction
For the survival of any organization, be it public or private the efficiency is the most vital factor. Therefore means the coordination and maximum contribution from each basic function of the organization such as creation, finance, personnel, conversion and distribution, especially the purchasing, function towards the success of the entire organization. However, efficient performance of the purchasing function is important to the smooth operation of may organization and as a result the role of purchasing is latent and conspicuous.
It is a basic responsibility of purchasing function to obtain material of services, to ensure that the flow of production is not interrupted. As has been described “purchasing and organization “and also, “competent purchasing is one of the basic requirements for a company to cult cost and thereby increase profits. When one contemplates that for every sale there must be a buyer and than other side of coin is buying, one begins to realize the significance and the function had been especially in the public sector stripped. The reason for this stems sometime aroma the wrong interpretation given to the art of purchasing plays an unquantifiable role in field of management activity and contributes highly to profitability. The words Geoff Lancaster, in the journals 1984 edition of purchasing should acknowledge it latent role as being much broader in its traditionally recognized role of merely being, requisitioning facility.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.
1.2 Background of Study
Nigeria bottling company plc was originated as a soda function beverage in 1886 selling for five least. Early growth was impressive, but it was only when a strong bottling system that coca-cola become the world Famous Brand It Is Today. 1884 – A modest start for a bold idea. Since the emergence of this organization, it has snifter to the market and consumers different types of soda fountain beverages. The number of soda fountain beverages sent to our market by this bottling company plc, in doubt has made tremendous impact on the reduction of the micro economic variables problems in this country through generating to our economy, creation of job opportunities etc the management of Nigeria bottling company plc is a public liability company. Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Role of Contribution of Purchasing and Supply in the Profitability of an Organization.
1.3 Statement of Problems
Business conditions during the recent past placed much strain and pressure on the purchasing management function and roles. Critical materials shortages, worldwide inflation and arbitrary action of government seriously interfered with the orderly operation of business.
Materialism is the source of out present day Nigeria society and people who are responsible for purchasing function in Nigeria bottling company plc Aba, and other good (public) companies however, purchasing management and its allied subject are the newest course read full-time in some higher institution of higher learning, and more than seventy percent of firms in Nigeria are yet to embrace this in its most meaningful and realistic dimensions.
Much corporate management has been made painfully aware of the shortcomings of the operation of their firms' materials management function. Indeed, it is among the best of the specialized business functions, to be centralized and given the responsibility and authority for making profit progress in this area of business management is thus just beginning. The development of purchasing role and function in the (public sector) Nigeria Bottling Company PLC Aba has been badly affected by the “buying syndrome”.
1.4 Aim and Objectives of Study
The aim of the study is to scrutinize the Role of Contribution of Purchasing and Supply in the Profitability of an Organization. In achieving this aim, the following specific objectives were laid out as follows:
- To examine the various, role of contribution of purchasing and supply management profitable of an organization available and evaluate their application.
- To make critical study of problem in the services offered by the firm and suggest solutions to these problem.
- To formulate the role of purchasing strategies that would be.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Does purchasing department have adequate number of customers?
- Do you find out reason why customer waster much time in the company?
- Does the place of purchasing impact an organization negatively?
- What are the Duties and responsibilities of purchasing and supply?
- What are the Role of Contribution of Purchasing and Supply in the Profitability of an Organization?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: There is no significant factor affecting the place of purchasing and supply in an organization
- H1: There is a significant factor affecting the place of purchasing and supply in an organization
Hypothesis Two
- H0: There is no significant impact of the Role of Contribution of Purchasing and Supply in the Profitability of an Organization
- H2: There is a significant impact of the Role of Contribution of Purchasing and Supply in the Profitability of an Organization
1.7 Significance of Study
This research project in all its tendencies aim at correcting many professional lapses and undue encroachment by unqualified personals in both private and public sectors, it is intended that the research will keep both the government and industrialists, in setting up their industrial to realize that without efficient purchasing officer the envisaged profit will remain that no previous study was been carried out on purchasing activities in the public sector, but this will in particular reshape the financial profitability of Nigeria. This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.
1.8 Scope of Study
The study of the role contribution of purchasing of supply management profitability of an organization of an organization covers very complex areas. But in the case of our study it is narrowed to soda fountain beverages production.
1.9 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.10 Definition of Terms
Purchasing: Is the process involving planning, and strategy designed to obtain value for money spent.
Vendor: This focuses on the knowledge of selling and buying the person that supplies goods to the buyer is the vendor.
Negotiation: Negotiation is a conference between one party or person with another party or person with a view to arriving at a consensus.
Material Handling: This is the process by which materials are being moved, handed and stored with in and around an establishment with the use of hand or mechanical equipment.
Organization: An organization is a group of people who from a business with the aim of making profit or achieving an objective.
Store House: A storehouse is a building designing to keep materials until when there are needed by the uses.
Storekeeper: Is a person who keep or operation the systematic procedure of recording transaction in the storehouse so that materials held in store will be safeguarded.
Storekeeping: Storekeeping is a systematic procedure of recording transaction in the store, so that at any given time, the stock record we show the actual stock position of each material held within the store organization.
