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NEGOTIATION SKILLS AS A TOOL FOR ENHANCING TIMELY DELIVERY OF MATERIAL (A CASE STUDY OF NOCACO)

Chapter One

Introduction

This project work is titled Negotiation skills as tool for enhancing timely delivery of material. It is inevitable for every organization whether big or small, private or public to procure materials for production or for consumption. Such material can be raw material, finished goods or equipment which may cost an organisation a huge amount of money. In order to achieve the right materials at the right time of delivery and for the right place, negotiation should take place. In these research work, emphasis will be laid on stressing out the various negotiation techniques available in the field of purchasing and supply. The techniques will tremendously enhance the procurement of material at a very economic cost and shortest possible time of receiving the order of materials. Negotiation is very important in the course of buying materials or services because of enhancing timely delivery of materials.

1.1     Background of the Study

Negotiation is one of the important as well as the most interesting and challenging as part of supply management. In industry and at most level of government, the term “Negotiation” frequently, causes misunderstandings confused with “Haggling” and price chiseling”. In government negotiation is frequently per solved to be a nefarious means of avoiding competitive bidding and of awarding large contracts surreptatiously to forward suppliers.  Webster’s dictionary define negotiation broadly as “Conferring, discussing or bargaining to reach agreement in business transaction” Herb Cohen describes negotiation as a persuasive process in which people ultimately attempt to reach a joint decision on matters of common concern in situation in which there is initial disagreement. Thus a negotiation always requires both shared interest and issues of conflict. Obviously without commonality, there is no reason to achieve resolutions. To be fully effective in purchasing, negotiation must be utilized in its broadest context as a part of a decision making process. In this context, negotiation is a process of planning, reviewing and analyzing used by a buyer and a seller to reach acceptable agreement or compromises include all aspect of the business agreement not just price.

Negotiation differs from a ball game or a war. In these activities only one side can win, the other side must lose. In most successful business negotiation both sides win something popular usage calls this approach “win-win negotiation” the “winnings” however are seldom equally divided invariably, one side wins more than the other. This is as it should be in business. Superior business skills merit superior rewards. Increasingly, negotiations are conducted by cross. Functional teams, these teams must be well coordinated in order to function as an integrated entity.

1.2   Statement of the Problems

The economic situation of the country is currently undergoing transformation, especially with the introduction of new policy in procurement activities and operation in each and every ministries and private organization. With the implementation of this policy, each and every government ministries and private organization must have a procurement section or department which will have the responsibility of negotiation and awarding the contract on behalf of the organisation. By so doing, the organization must recruit a very good personnel with relevant skills and experience so as to help the organization to minimize the cost, get value of every naira spent and enhancing delivery time of materials for the organization. Negotiation is a critical task, most organizations are facing time delivery problem as a result of long process of negotiation and long time of the arrival of material order.

1.3   Purpose of the Study

This project is required as a pre-requisite for the award of Higher National Diploma (HND) in purchasing and supply department of Kaduna Polytechnic. And also the researcher is intended to achieve the following objectives:-

i. To identify various negotiation skills in an organization and their contribution in enhancing timely delivery of materials.

ii. To identify the resources required to support negotiation planning and execution.

iii. To highlight on the benefits of a good negotiation skills to the organization.

iv. To make relevant recommendation on how NOCACO can improve negotiation skills.

1.4    Significance of the Study

This research study is required as a partial fulfillment of the award of Higher National Diploma (HND) in purchasing and supply department, college of Business and Management Studies, Kaduna Polytechnic. However, the study is beneficial to the researcher in broadening his knowledge on the subject matter which is negotiation skills. The study will benefit the students of Kaduna Polytechnic to serve as a secondary source of data to any course and topic related to this study. The study will also benefit the organizations, especially NOCACO as the case study.

1.5   Scope of the Study

The research work discourse the negotiation skills as tool for enhancing timely delivery of material in NOCACO, Kaduna. The research makes use of some selected departments in the organization which includes management, accounting, production, marketing and procurement. This research is limited to the above mentioned departments only in the organization. This is because of the stipulated time by the purchasing and supply department to summit the project.

1.6   Research Question

The following questions will be asked in order to achieve stated objectives:

i. To what extent does a negotiation skill enhance timely delivery of materials?

ii. What resources are required to support negotiation planning and execution in your organization?

iii. What are the benefits of good negotiation skills on materials order?

iv. How can you improve negotiation skills to enhance timely delivery of materials?

1.7     Historical Background of Nocaco

NOCACA (Northern Cables Processing and manufacturing CO) was incorporated in June, 1978 production started in July 1980, with the aim of supplying vehicles plants with locally made cables harmess and to satisfy the Nigerian market with all kinds of electric cables and wires. Due to it’s technical nature the company equity shares are distributed, 40% to Nigeria shareholders and 60% to the foreign partner contained in the schedule III of the enterprise promotion degree. The Board of Directors has Mallam D.H. ABDU as the Chairman while Mr. E.H SCHNARE is the Managing Director. Starting with the strength of 26 in 1980, the company now employs over 240 staff. Today NOCACO is recognized as NO. 1 cable manufacturer in the northern part of the country producing in accordance with National and International; Standard and specify customer’s requirement.

The product ranges of NOCACO are approximately 300 different types of cable which include the ordinary wiring cable, conduct cable, insulated aluminum services cable. Aluminun over head lines both bare and steel, cords and drop and wire for telecommunication purpose. In the area of quality NOCACO places a high premium on the quality of its producte as the design and produces high quality product in line with internal and international standard i.e. Nigeria Industries Standard (NIS) British Standard (BS) and German Industrial Standard (VDE). And to specific customers requirement. NOCACO carried out rigorous quality control test on its products at every stage of the production process rather than at the final inspection so that its high standard are maintained throughout of the full length of the conductor cable.

However, as prove of high quality NOCACO is an ACIS gold award winner on PVC insulated (non-anoured) single and multi core cable and aluminum overhead line. The Capacity of NOCACO to produce very high quality cables that meets national and international standard at cost that represent value at all times his culminated in ability to be the first cable manufacturers in the northern part to design install and implement quality system which has been certified according to the requirement of international organization standardization otherwise known as 180 9001 2000 this is a quality system which aims at achieving total quality management (TQM) in the areas of production, installation servicing. Finally, NOCACO has been the first cable manufacturer in the north which is centered in the heart of northern state of Nigeria, Kaduna Below Are the Diagram of Nacaco

1.8   Definition of Terms:

Ø Negotiation: This is defined as a process of formal communication, either face to face or via electronic means, where two or more people come together to seek mutual agreement about an issue or issues.

Ø Purchasing: This term is used here as the process of buying in the markets. But in a broader sense, it is a professional term used when buying goods and services by industries, commerce and corporation by a professional buyer.

Ø Buyer: This is a person who buys goods at a particular price without the technicalities involved being taking into consideration. He is no regarded as a purchaser in a real sense.

Ø Specification: This is a detail description of how is should be design or made, this include the analysis of performance of the item need any other relevant characteristics.

Ø Delivery:         is the responding to customers needs by delivering products or making available services where they are needed and when they are need.

Ø Price:     Is the exchange value for goods and services

Ø Value: How much something is worth in money or other grounds for which it can be exchange.

Ø Bargaining: This is a discussion between two parties in order to achieve a compromise. Which will lead an agreement to buy, sale or exchange.

Ø Persuasion: This is a situation where one party knows best and therefore impulse his will on the other party.

Ø Capital Equipment: Is a fixed assets of a business not intended to resale which will be use in the production or running of the business.

Ø Lead-time: This is a time interval between placing the order and the time of its arrival.

Ø Skills: Skills is an ability and capacity acquired through deliberate, systematic and sustained effort to smoothly and adaptively carryout complex activities to job functions involving ideas or job functions.

Ø Tool:      can be defined as any item that can be used to achieve a certain goal, especially if the item is not consumed in the process. Informally tool can also be describe as a procedure or process with a specific purpose.

Ø Enhancing: Enhancing can be defined as to intensity or increase quality, value, power etc to improve augment.

Ø Material: Material can be defined as the matter from which something can be made. Material can include, but is not limited to raw and processed material, component, parts assemblies, and sub-assemblies.

Ø Timely: Timely can be defined as appropriate at the right time, convenient, judicious, opportune, prompt, propitious, punctual, seasonable, suitable well timed.

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