CHAPTER ONE
1.0 INTRODUCTION
Purchasing as a subject and as a business function
has really come along way. In the past when material, component part energy etc
were abundant and available at ridiculously low price, purchasing was not given
proper chance to operate that is why procurement was looked upon as having
unimportant function.
However now that material is in short supply there
is generally on existence of what is called galloping inflation.
These result to high price of material or unfriendly
supply market. It will be very unreasonable for any business firms and indeed
government to ignore purchasing function.
With these reason purchasing tends to play an
important role in any business organization whether profit or non profit
oriented. In a nutshell, the project is about the need for a company to involve
international procurement.
To a layman purchasing means the process of buying
raw material, component part and service. But in a broader sense procurement
can be defined as the purchasing of the high quality of goods at the right
price from the right sources and delivered in good condition to the right
location and when required.
Procurement these days for organization especially
profit oriented company has become very difficult because of the international
operation involved. The company has to buy international to make its product.
This nowadays firms in African countries or content can now produce their
material requirement and service from few distance sources in American
continent.
The researcher case study of Global Soap and Detergent
Limited Ilorin will at the long run benefit in the are of appraisal made by the
researchers on how foreign buying activities are accomplished. At the end of
the research work, recommendation to solve the problem can be employed by the
company to improve its purchasing performance especially in the area of
international buying.
To the reader, especially non professional
colleagues knowledge concerning foreign purchasing would be gained and various
reason for foreign buying would also be gain.
To the professional colleagues, how international
buying is practically carried out in a company would be learnt in addition to
the theoretical knowledge gained in the classroom.
Finally, the society as a whole has its share or
benefit to be achieved from the project.
1.1 OBJECTIVE OF STUDY
The research work is of importance to the researcher
because if forms part of the requirement for the award of Higher
National
Diploma in Purchasing and Supply in the Department of Purchasing and Supply
Institute of Finance and Management
Studies
Kwara Poly.
The research study will attempt to inform the
organization under the study on the roles and immense contribution of
international buying.
However, at the end of the research work, it would
help to convince the management of Global Soap and Detergent Limited llorin,
that Purchasing contribution is essential the overall corporate the
organization lack of this may cause total collapse of the company corporate
plan.
1.2 STATEMENT OF THE PROBLEM
The research study deal with international
procurement and its justification in a company. An international buying
involves more complex procedure relating to local buying. There is tendency for
some problem to arise during the practice. Among some problem encounter by the
company are how to locate foreign supplier, how to get traveling document,
licensed, importation duties. More so, fluctuation in exchange rates, instability
in rate of exchange is one of the problems frustrating the industry in which
the cost important becomes higher.
Lastly, the distance between one nation and another
may so great that it makes the cost of transportation high.
1.3 SCOPE AND LIMITATION OF THE STUDY
This research works will cover buying for
organization. Thus its scope will be based only on international buying aspect.
Also, the study will be restricted to the chosen
company Global Soap and Detergent Ilorin by analyzing the various procedures
involved in international procurement. The study will start right from origin
of needs and ends with clearing of the goods at what or port of entry.
They researcher faced some problems in the course of
carrying out the research work, which range from financial problem and time
factors. The researcher was also denied some accessibility to copies of various
document use in the organization when sourcing abroad for security purpose.
Also the attitudes of the respondent create much problem. Most of them schedule
a time in which they will never be around whenever you are there.
Lastly, the organization lack purchasing library in
which
secondary
data can be yet for the researcher.
·
Theoretical Scope:
this refers to the area to be covered during the period of research work. The
area to be discussed shall be limited to purchasing and supply.
·
Geographical Scope:
The researcher shall offer useful suggestions where necessary so that the
organization could be able to advice much for progress and make valuable
contribution to see the economic depression of this great nation.
·
Industrial Scope:
The researcher will focus more attention on the purchasing department with
particular reference of Global Soap and Detergent Industry as regard their
activities.
·
Time Scope:
This is where the researcher would use his time to spend for collecting data
from the organization in order to get facts from them.
1.5 SIGNIFICANCE OF THE STUDY
If international buying is effectively and
efficiently carried out, it is possible to derive vital in gain from it. Global
Soap and Detergent llorin derives the following important from overseas buying.
1. Better
quantity material: Material of best quality are got from overseas due to their
technological advancement.
2. Increase
in prefer to buy foreign goods because it is mostly cheaper when compared to
local source because of lower wage, longer runs, better product, better plant
and some other important which might at long run reduced the amount to be paid
for the gods. In this wise, this tends to increase the profitability of the
company used as a case study, Global Soap and Detergent Ilorin.
3. Better
quality material spark parts, component are got from international market.
1.6 HISTORICAL BACKGROUND OF GLOBAL SOAP AND
DETERGENT INDUSTRIES
LIMITED COMPANY PROFILE AND CITATION
INTRODUCTION
Global Soap and Detergent Industry Limited is a
member of the Doyin Group of Companies and the first indigenous company
licensed to manufacture soap and detergent in Nigeria. It was in corporate on
8th October, 1984 with head office at Lagos and the factoring situated at Amuda
Aluko way llorin, Kwara State.
OWNERSHIP
AND MANAGEMENT
The company is operated managed and directed by full
blooded Nigerians. Owned by courageous and experienced industrial 1st prince
(Dr) Samuel Adedoyin who led for many years been championing indigenous
technology, backward integration and the use of local raw material in Nigeria.
Global Soap and Detergent Industry was established
in response to the call of the Kwara State Government in industrializing Kwara
State. Price Adedoyin is the chairman and managing director. The affairs of the
company are managed under the Leadership of Mrs. Omolola Olobayo, the Executive
Director. Member of the management team also include a list of manager with
Engr T. N Njoku as the general manager.
The company operates the following department:
personal and administration, technical, production, accounts, sale, marketing,
audit, purchasing laboratory/quality control raw materials silicate,
sulphonation and distribution department.
FACTORIES
The company has greatly contributed to the growth of
the Nigeria economy through industrialization. Despite the economy downturn,
the company has metamorphosed from its one detergent factory and a pioneer
staff strength of 40th in 1985 to the present conglomerate of seven factories
with a staff strength of over 1000.
THE
DETERGENT PLANT
The detergent plant is a Sabiz Italian plant. In
1993 it was up graded to a 10 ton per hour capacity. The product are mainly
detergents and the following one the brands presently being produced: flash
blue detergent (200gm) bold detergent (10kg, 5kg,lkg, poly and sack) wash
(10kg, 5kg, 2kg,lkg poly and sack) and super deal (200gm).
SULPHONATION
PLANT
This is a 10 ton per hour plant commissioned in 1994
upgraded to 1.6 ton per hour. The main product is sulphonic acid which is a raw
material used for the production of detergent powder and detergent bar.
SOAP
PLANT
This soap comprises 1.0 per hour each of toilet soap
and laundry soap. The plants were commissioned in 1990. The product are Hielean
bar soap (600gm), Bold tablets (110gm) Bold tablets (200gm) vogue toilet soap
(95gm) grand tablets (150gm) vogue quest soap (30gm) med soap antiseptic soap
(25gm).
GLYCERINE
PLANT
The glycerin plant uses lye which is a by product of
soap
production
as a raw material to produce glycerire. The plant is a 0.1 ton per hour capacity
and was commissioned in 1992.
DETERGENT
BAR PLANT
The detergent bar plant which has a capacity of 1.0
ton per day commissioned in 1994. The product is bold detergent bar (400gm).
SILICATE
PLANT
This furnace produces sodium silicate which is a raw
material for the production of detergent, soap and detergent bar. The plant
which is a 10.0 ton per day was commissioned in 1993 two similar furnace are
sited in Lagos.
SCOURING
POWDER PLANT
This is 1.0 ton per plant within the detergent
plant, it was commissioned in 1989 and produces Hiclearn scouring powder
(600gm). Ninety nine percent of the raw material used to produced scouring
powder are obtained from Kwara State.
SALES
AND MARKETING
The company’s range of product has confirmed to
enjoy good patronage from Nigerians due to the consistently high quality, it is
on record that global soap and detergent industries is the first company to
have received the NIS certification mark for quality within its first 3 years
of operation. The company’s products which have NIS certification mark for
quality are flash blue detergent, super deal blue detergent, wash rite blue,
detergent and vogue toilet soap.
As a way of researching the nooks and crannies of
the country the company has 22 sales deports located all over the federation
viz Aba, Abeokuta, Benin, Enugn, Gombe, Ibadan, liorin, llupeju Lagos,
Marinland, Jimeta, Jos, Kaduna, Kano, Maiduguri, Gusau, Katsina, Ondo, Onitsha,
Sokoto, Uyo, Minna and Ado Ekiti. In addition, their product have been
introduced to countries within the ECOWAS sub-region as a way of earning
foreign exchange for the country. This is achieved through direct consumer
contract opening of depots and encouraging distributors.
1.6 DEFINITION OF TERMS
C.I.F: This simply means Cost Insurance Freight
which indicate that the seller is responsible for the goods until they get to
the port of destination and the selling price includes ocean freight and
insurance up to that point.
Duty: Payment made to the government either for
import or export.
C and F: Cost and Freight This is similar to C.I.F
except that buyer has to pay for insurance charges.
Bill of Lading: This is a document similar to delivery note
used in shipping. The sender retains one copy is held by the master of ship and
note also for consignee.
Port of Entry: This is importer! buyer country part i.e
through which consignment will entre its country of destination.
E.T.D Estimated Time of
Department: This
is a note send to the importer stating the time the vessel leaves the port of
exporter.
E.T.A Estimated time of
Arrival: It
is a note send to the importer given him the time consignment will arrive at
his country port.
CRFClean
Report of Finding: Pre-shipment
inspection of goods to be shipped to Nigeria must be ensured that they are of
correct quality and that only normal contract material importer are shipped.
Carrier:
This is a company offering the service
of transporting good from one area to another.
F.O.B Free on Board: This is a contract in which good are
delivery t the ship (no board).
Consignment Note: A note accompanying consignment of goods
indicating quantity, description, number of package in the consignment.
Consignee: The person or company to whom goods are
addressed or sent.
Commercial Invoice: The invoice is often employed as basis for
custom clearance at the port importation.