PROBLEM FACING MANUFACTURING ORGANIZATIONS IN NIGERIA (A CASE STUDY OF DOYIN INVESTMENT NIGERIA LIMITED)
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.
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