CHAPTER
ONE
1.1 INTRODUCTION
One of the major problems facing manufacturing
organizations in Nigeria is how to get raw materials for production.
It is on record that many manufacturing organization
have decided to reduce their production or close down as a result of inadequate supply or total lack of
raw materials, these has affected employees in these organizations. The
economic down turn which had led to the introduction of structural adjustment
programme had necessitated the introduction of such raw materials research and
development council (RMRDC) which was established in the yea 1981 with the
primary mandate to promote the development and utilization of Nigeria
industrial raw materials and to provide industrial support based investment in
all the states of the federation. The effort of the council has significantly
widened in respect of the raw materials base for the manufacturing and service
rendering organization.
It is then responsibility of the purchasing manager to
ensure that the materials are purchased and delivered to the organization at
the right time in order to carryout this function effectively, there is need
for although suitable market research to find a source or source from where the
material can be obtained through the sourcing technique.
1.2
STATEMENT OF THE GENERAL PROBLE
The most common and general problem
affecting sourcing in Doyin investment Nigeria limited, Ilorin are the
following.
1. Problem
of allowing the non professionals to function: this problem arises in a
situation where the organization is using
is using non professional for sourcing function resulting in poor
selection. Or the suppliers
2. The
problem of constraint price inflation by the suppliers on the pretence that
price has gone up
3. Problem
of specification: in accurate specification of materials leads to sourcing unerring
g or wrong materials which does not meet the organization latude for creating
an arms supplies and need. Co sequencing and arms suppliers and need.
Consequently considerable consist and effects and lost.
1.3 HISTORICAL
BACKGROUND OF DOYIN INVESTMENT NIGERIA LIMITED
The doyin investment Nigeria limited Ilorin
was sited along Asa-dam road, Ilorin Kwara State. The company which specialized
in the production of soaps extra power flash hi clean, vogue, dentol- clean and
wash right.
The company was incorporated in October
1984 by the federal government of Nigeria under commerce an the industry law in
1985, will the plants were required into the staff and the process of
installation stated immediately. The commissioning
of the industry was done toward the end of
1985. This industry is under doyin group of company, the head office is at Lagos.
Doyin is from kwara state. He decided to site, the industry in the state
capital for the purpose of reducing the problems of unemployment within and
outside the state. The organizational structure of the company shows the
forcing musical management who is at the head of the industry. The
responsibilities of the whole organization rest on him. He is the only person
that gives orders on any important issues may be when there is any purchase of
capital equipment of if they are going to purchase a large quantity of raw
materials involving thousands of naira.
After the general manager production
manager and auditing control manager are the next the technical manager is the
electronically engineering store. The store supervision port directly to the
technical manager whenever there is any need to purchase costly equipment or
tools.
a. The
production includes:-
i.
Flash cartoons for
packing the detergent in case.
ii.
Inner cases to which the scalp
or the detergent itself is being packaged
iii.
Policy product (wash
right bags) is used to pack the detergents that were not in to cartons it is
weighted in kilogram (500kg).
B.
The component of the raw materials stores.
i.
stop (sodium tripolifo stato)
ii.
Sodium silindicate
iii. Glue
iv. Blue
crop
v. Blue
dye
All these raw materials that are kept
for the production process in the raw
materials store until they came to request for them from the production shop
floor.
The quality control manager, in
collaboration with design and engineering department work on quality chemical
that should be used, the designing
packaging and packages. What types of colour will attract customers dimension
of the carton hardiness so that it does not just get pilled any how. The
quality control department forecast the amount of raw materials to be used as
it is always happing in all organization on stores department will supply the
entire documents connected with the purchase of raw materials and stationary to
the account department so that the necessary funds is given to them to buy from
outside organization. All these decumbent are not given to the accounts
department alone to supply money from the purchase but the account department
uses it for preparation of the annual budget.
In every department there are
supervisor monitoring the affairs of clerks and other cleanses
1.4 OBJECTIVES OF THE
STUDY
The primary aims of this research work
is to satisfy one of the award of Higher national Diploma (HND) certificate in
purchasing and supply department, institute of finance and management studies
Kwara state polytechnic, Ilorin. It is also aimed at widening the knowledge of
the people on significances of material sourcing in ensuring organizational survival
as relates to manufacturing companies.
Another objectives for the study is
that it will enable the researcher to know the reality and practicability of
the function (sourcing) in manufacturing organizations.
Also, it aims at enlightening the manufacturing
companies on the benefits and contribution derivable from effective sourcing.
1.5 SCOPE OF THE STUDY
This study will specifically cover
significance of material sourcing in ensuring organization survival in
manufacturing companies and the contribution it makes to them buying system and
the organization as a whole. The study will highlight sourcing practice in
doyin investment Nigeria limited only due to financial and time constraints.
1.6 LIMITATIONS AND
CONSTRAINTS
The successful condition of this
research work has not by any means been an easy task. The researcher was faced
with a lot of problems which almost threatened the success of the research.
Firstly, in view of limited time for
the research work, the researcher has limited the research to application of
sourcing in manufacturing companies.
Also, lack of enough and adequate
financial resources has made it quiet impossible for the researcher to visit
other similar companies scattered all over the county. Another problem faced by
the researcher was the uncompromising attitude of the management of the company
under study to release for the use of some of the essential fact that would
have aided this research study.
Finally, there were the problems of in
adequate and up to date statistical data in almost all department of the
company.
1.7 HYPOTHESIS
FORMULATION
Hypotheses are tentative statement or
assumptions made about the research topic subject to test. Null (HO) and
alternative (HI) hypothesis will be
employed in this project. Null hypothesis makes negative assumptions while
alternative hypothesis makes positive assumptions.
There fore, the hypothesis can not be
said to bright or wrong until it is proved.
Hypothesis of the study includes:-
Hi. i effective sourcing ensures select right
source of supplier.
Ho. i effective sourcing does not ensure select
right sources of supplies
Ho. 2
absences of effective sourcing does not necessarily deprive a company of
effective buying
Ha. 2 Absence of sourcing does deprive a company
of effective buying.
Hi. 5
a competent and well trained buyer is not necessarily an essential tools in
sourcing.
1.8 DEFINITIONS OF TERMS
Sourcing:-
An identification and department of offer to provide goods or services in response
to an invitation to tender for specified items.
Procurement:-
procurement is a term originated by the armed forces to define one of the
general supply functions involved in logistics in the broader since or it is
define as including the whole process whereby all closes or resources (people,
materials, facilities and services) requirement are obtained.
Reciprocate:-
when buyers give preference to supplier who are also customers, they are
engaging in a practice known as reciprocity.
Negotiation:- this is the idea of
having discussion for the purpose of coming to an agreement on issues.
Progressing:- sometimes called follow
up, of order of the purpose is to ensure that goods and services are received
as at when required. Many delivery problem can be avoided by shoveled source
selection, ever the most careful selected source sometimes prove unreliable in
meting organization goals.
Specification:- specification is a
detailed and completed description of materials or parts and unprompted in
components processed or product design.
Inspection:- is the process of
examines the incoming consignment for quality and quantity to ensure that they
conform to quality and quantity requirements.
Purchasing:- differentiate from procurements
in that it applies only to goods or services paid for with money or other
consideration
Provision :- this is defined as the
process determining in advance requirement of materials taking into consideration
existing stocks delivery times and rates of consumption so that the amount of stock
in hand at anytime will be in occurrence with the stock control policy.
Raw materials:- stock or items
purchase from suppliers to be input to a production process and which will
subsequently be modified or transformed into finished goods.