TABLE OF CONTENTS.
CHAPTER
ONE
1.1 INTRODUCTION
1.2 STATEMENT
OF PROBLEM
1.3 RATIONALE FOR THE STUDY
1.4 SCOPE
AND LIMITATION OF THE STUDY
1.5 LIMITATION
AND CONSTRAINTS OF THE STUDY
1.6 HISTORICAL BACKGROUND OF NIGERIAN
BOTTLING
COMPANY PLC, ILORIN KWARA STATE
1.7 ADMINISTRATIVE
ORGANISATIONS
1.8 DEFINITION
OF TERMS
CHAPTER
TWO
2.1 LITERATURE
REVIEW
2.3 IMPORTANCE
OF SOURCES OF SUPPLY
2.4 SOURCING
PROCESS
2.5 APPRAISAL AND SELECTION OF SOURCES OF
SUPPLY
CHAPTER
THREE
RESEARCH METHODOLOGY
3.1 RESEARCH
METHOD USED
3.2 INSTRUMENTS OR TOOLS USED IN COLLECTION OF DATA
3.3 RESEARCHERS
POPULATION USED! SAMPLE SIZE
3.4 SAMPLE
PROCEDURE EMPLOYED
3.5 STATISTICAL TECHNIQUES USED IN DATA ANALYSIS
CHAPTER
FOUR
4.1 PRESENTATION
AND ANALYSIS OF DATA
CHAPTER
FIVE
5.1 SUMMARY
OF FINDINGS
5.2 CONCLUSIONS
5.3 RECOMMENDATION
REFERENCES
CHAPTER
ONE
1.1 INTRODUCTION
Good supplier can be referred to as a
tangible asset to manufacturers. It would not be possible to operate without
supplier; this can be viewed for the aspect of division of labour or batch
production process whereby the successful completion of one process depends on
another. Therefore, I supplier fails to deliver materials especially raw
materials at the right time of the operation is bound to paralyze.
Sourcing by definition is a management
effort which is aimed at tie location or selection of effective and efficient
supplier who are willing to respond to the needs of a manufacturing concern in
the area of reliance supply of its raw materials, components and parts, quality
insurance with reasonable price.
Selecting suitable supplier is one of
the purchasing manager’s function or responsibility. The selection of supply
source must be critically examined by the purchasing manager. The buyer must
find the supplier who will furnish him with the optimum combination of good suppliers’
factors.
Sourcing involves much more than picking
a supplier for each other in isolation. It involves continuing relationship
both with preferred sources which are actually supplying goods and services and
with the potential sources which may have been passed over for the present but are
still in existence. There is no way a purchasing function could be carried out
without paying special attention to the source of suppliers within and outside
the environment with effective evaluation of such supplier.
One the problems facing most
manufacturing organization in Nigeria are how to source for the right supplier
and the rating of their performance. ‘[he careful planning of the buyer and
production planning can be jeopardize by a poor sourcing or sources selection,
It is already on cord that without knowing the source for the right supplier,
the end product cannot be of good and right quality because the inputs which are
the raw material may not be up to standard required for their production.
It is also on record that many
organizations have to reduce production or close down entirely due to lack of
source of supply of their raw materials (input) that will be processed to form
the output or the ultimate product that will be offered for sale.
However, it reflects that the extent to
which buyers search for supplier have received considerable attention in this
days of economic instruction. Every organization has to find ways of getting
adequate sources of materials for their operation.
1.2 STATEMENT
OF PROBLEM
This study or research work is aimed at
finding out the number of problems facing purchasing officers during the
process of “SOURCING FOR THE RIGHT SUPPLIERS’. There are certain problems which
usually faces the purchaser which ranges from determination of where source
either internal or external (i.e. local or international market), to
determination of who is best supplier and what system to be used in approving
and rating them.
Another problem usually encountered
while sourcing for suppliers include the situation where the purchasing officer
find himself in the monopoly market where there only one seller who as all the
power to exploit purchaser because there is no competition between seller.
1.3 RATIONALE FOR THE STUDY
First, the research work is carried out
in partial fulfillment of the requirement for the .award of ordinary national
diploma (OND), in business studies;
Institute of finance and management studies (IFMS) Kwara State Polytechnic, Ilorin, Kwara State.
This area of project work has also
attracted researchers because of the role it plays in any business. In view of
the stated problem area of the project, the basic objectives of the study are
stated as follows:
1. Find out
the nature of the problem facing purchasing officers when sourcing for their
inputs.
2. To
find out the importance attached to “sourcing” as one of the five principles of
good purchaser
1.4 SCOPE
AND LIMITATION OF THE STUDY
The scope of the study is to focus on
how manufacturing organization for their supplier for raw materials which is
the life-wire of any ion concern.
The research is therefore limited to
Nigerian bottling company Plc, Ilorin Kwara State as a case study and also to
other areas considered as important to the topic in question. At the end of
this project it is hoped that sourcing for the most suitable supplier for raw
materials would be dearly understood.
1.5 LIMITATION
AND CONSTRAINTS OF THE STUDY
The study of project is limited to
Nigeria bottling company Plc, Ilorin, Kwara State.
Researchers in Nigeria are often faced
with number of problems which are inherited in the society. The researcher here
was not exempted and so had a fair share of these constraints. These
limitations are mainly environmental problems some of which are described
below:
RESPONDENT PERCEPTION
While some of the respondent to oral
interview were very cooperative and made the researcher’s project others were un-cooperative.
The un-cooperative behavior range from
failure to keep dates h researcher, to outright refusal, to grant oral
interview or giving flimsy excuses. These acts of un-cooperative attitude
constituted a serious limitation to this project.
The attitude of the company as regards
provision of necessary data and records on has they go about their sourcing for
supplier was not all that encouraging enough and when investigation was
conducted on this (project) it was learnt that the company regard some of the information
as top secret which they may not want to pass to their competitors. The
research is also constrained by distance, time and insufficient finance.
1.6 HISTORICAL BACKGROUND OF NIGERIAN BOTTLING COMPANY
PLC, ILORIN KWARA STATE
Coca-cola bottling company first came to
Nigeria in 1953, when it’s first it was located in Lagos. It was the beginning
of an exciting story of the growth and development particularly during the past
ten years.
Nigerian bottling company is today
Nigerian’s number one bottler of soft selling more than six million (6,000,000)
bottles per day, a figure which is still growing with the continuous expansion
of the existing eighteen plant and with the opening of brand new plant in
various part of federation.
Fanta is by far the best seller in the orange
segment and Sprite, the most widely sold lemon lime drink in Nigeria. Other
products bottled by Nigeria bottling company include fanta ginger ,Fanta tonic,
Fanta Soda and Crest, bitter lemon.
The success of Coca-cola has brought
about the development of a number of sister industries all contributing to the
growth of the Nigeria economy. The Delta glass company in which supplies
millions of bottle required to keep a large bottling company in operation and
grown products factories in Ijebu-Ode and Kano which
manufacture the metal crown to seal the bottles, the Benin plastic company
which manufactures the plastic crates for distribution of the bottles.
In addition, the trucks which have a
familiar sight in many part of nation delivering drinks to more than eighty
thousand (80,000) supplier are also assembled in Nigeria. Nigeria bottling
company is also the largest manufacturer of Carbon-dioxide used to carbonate
soft drinks in the country. The Nigerian bottling company employs over (6,000)
six thousand workers who are Nigeria in all fields of operation. The manufacturing
process of Coca-cola is based on proper measurement of it content like sugar,
water and concentrate. The same standard is maintained all over the world.
The headquarters of Nigeria bottling
company is at Leventis building, lddo house, Lagos Island. The
various plant sited all over the Federation have currently been divided into
four different region, the west, East, South and Northern regions. Our case
study is an example of the Northern
region “ILORIN’.
Ilorin plant was constructed and
installed in 1979 and it was commissioned by his Honorable Excellency Connell
S.C. Ifere. It was the tenth establishment among the eighteen plants of
the industry.
The very plant is neatly located along
Old Asa- Dam Road, Ilorin. The Coca-Cola bottling company is one of the
multinational companies in the country which is well known to be owned by Leventis
Group of company now made up of share-holders.
1.7 ADMINISTRATIVE
ORGANISATIONS
The administrative organization of
Nigerian Bottling Company Plc is composed of the executive Chairman which is
mostly appointed by the share holder, next is the executive director who is the
overseer of the company, the General manager and the regional executives or
managers. After this are divisional executives who come from each overall
department in the Federation.
The branch plant is headed by a plant
manager who is the head of the plant and other managers like factory manager,
sales manager quality control manager, plant or branch accountant, the
microbiologists and the personnel manager, under them are the superintendent
and Supervisors officers.
A clear administrative organization is
better shown on the administrative chart.
1.8 DEFINITION
OF TERMS
SOURCING: The
identification or development of suitable sources of supply, the systematic
investigation and comparison of such sources, the sourcing decision, which help
supplier to patronize, how many to use on a given item, how to allocate
available business, what term to do business on.
RIGHT SOURCES: this
is the supplier that can meet the requirement of the buyer at any period time.
PROCUREMENT: This
term is defined as a whole process whereby all classes of resources (materials
facilities and services) required are obtained.
SUPLIER DEVELOPMENT: this
is the process where the buying company assist small or new supplier for them to
be able to supply product it’s required in the correct quantity, quality and
correct delivery schedules.
CARRYING COST: this
comprise of all cost that are incurred in holding a given level of inventory.
ORDER COST: This
is the total cost incurred in the process of acquiring a given level of
inventory.
ACQUIRES COST: This
comprises of cost of carrying stock and cost of placing order.
PROCESSING:
Sometimes called expediting, chasing or follow-up. An important part of the
suppliers management task is to ensure that goods and services are received as
at when required.
Many delivery problems can be avoided by
sound selection, even the most careful selected sources sometimes prove
unreliable in meeting agreed schedule.
LEAD-TIME: This
is the time when an order is fully recognized to the time when the goods are
delivered. We have internal and external lead- time.
PRICE ANALYSIS: This
is the process of examining of seller price without evaluation and examine of
separate elements of the cost and profit making up the price.
PUBLISHED PRICE LIST: is a
form of quotation that provides prices of standard commodities treated.
RECIPROCITY: When
buyers give preference to suppliers who are also customers, they are engaging
in a practice known as reciprocity.
SPECIFICATION: This
is very important. it is the detailed statement providing a complete
description or list of characteristic or requirement laid down for materials,
components, processed or services.
NEGOTIATION: This
is an agreement procedure aimed at decision making.
POLICY:-This is
a general statement or understanding which guides or channels the thinking and
action of management in decision making. RIGHT
QUANTITY: in purchasing, this term refers to the volume, size amount which
can be most economically purchased of any item at a particular time.
VENDOR: This means suppliers
who: supply: goods or services to the buying company.
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