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EFFECTIVENESS OF PURCHASING PLANNING AND CONTROL IN A MANUFACTURING ORGANIZATION

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

Looking ahead and prepare for future is better than to look back and regret. An organization especially a manufacturing in a very competitive needs to examine how it can effectively develop plan and strategies for serving its purchasing. The aim of any purchasing operation is to make the future happier. But this was not well recognized by most firms initially so job that should be handled by experts in the field of purchasing were given to less qualified personnel’s and in most case this shorten the life of most business. 
Planning is the management function of setting target or objective to be achieved and detailing out ways by which the target will be achieved. Planning is sometime greater than first thinking ahead. In manufacturing organization (Anammco) purchasing planning and control show who is to do the job (qualified purchasing personnel’s) how the qualified purchasing personnel’s will carryout the job and when the job will be done. 

Purchasing planning and control share with the others activities of the purchasing mix the distinction in commerce of being a dynamic element in operation of business. The effective of purchasing planning and control in a manufacturing organization enable the organization to absorb possible shock emitting from purchasing environmental change.  The subject matter is chosen by the researcher to explain the foregoing Anamco marketing planning and control in other to know its effectiveness. 

According to Adirika (2003, P.11) in this lecture note, “purchasing planning is an exercise of analysis for and to increase the effectiveness of purchasing. Or drawing from the past to decide in the present what to do in further in other to achieve the purchasing objective enterprise efficient effective.  Purchasing planning does not depends on only theory or book knowledge. In other to plan effectively we need to understand and know about our own environment (Macro – and Mirco environment) where the purchasing plan will operate.  For purchasing planning and control to be effective the qualified purchasing personnel that carried out the purchasing and control may consider some element or feature such as time.

Purchasing planning and control will be effective if the plan has a stated time, for completion, the estimate of time may be varied depending on the product or firm. For purchasing planning and control to be effective the money for material needed for the effective planning must be available and human resources. The qualified purchasing personnel’s would have a group of consumers or target markets in mind and then position the organization’s or company’s product on this target market or segment.  Purchasing control played a vital role in a manufacturing organization. If all purchasing programme or plan along with other sub function are ideal and well harnessed but lack control it will be likened to driving a well structured comfortable vehicle without a steering on a very busy road. Control is the vital follow – up process which is complementary to planning while purchasing planning is deciding in advance what needs to be done, how and when it should be done.

As clearly recognized decade ago in an undertaking control consist on verifying whether everything occurs in conformity with the plan adopted, the instruction issued and principle established. It has for object to point out weakness and error in order to rectify them and present recurrence.  Purchasing control as concerned with establishing and maintaining appropriate procedure and apparatus for monitoring and measuring the implementation of purchasing plan and strategies set out to active purchasing objective and taking necessary corrective action.

1.2 STATEMENT OF THE PROBLEM

It has been said that planning is determining the future ad control what have been planned.  In having good and effective purchasing planning and control in a manufacturing organization, some basic problem confront purchasing management. One of the problem is availability of funds to the purchasing department, the company may lack adequate finance to carryout set purchasing planning and control effective. The absence of funds at the right time to back the plan means incapacitate by the executive in implementing the plan and ensuring that deviation are connected.

Another problem may be problem of recruitment of qualified personnel to handle the planning and having experience person to execute the set plan. Frequent change of purchasing personnel may also contribute or improve the effectiveness of purchasing planning and control in a manufacturing organization.  In looking at this, one would want to know the effectiveness of purchasing planning and control in a manufacturing organization how it can be effectively implemented and also the various ways to improve on it effectiveness to achieve organizational goals and objective.

1.3 OBJECTIVE OF THE STUDY

1) The primary objective of this study is to know the effectiveness of purchasing panning and control in a manufacturing organization (ANAMMCO)

2) This study will enable the research to know some basic problems that develop in the process of having good purchasing planning and control in a manufacturing organization. 

3) This study will provide the researcher some solution to the problem and reduce bottleneck in planning process of the particular organization. 

4) To know the benefit on good purchasing planning and control in a manufacturing organization. 

5) This research can equally serve as a base for further study on topic related to the subject.

1.4 RESEARCH HYPOTHESES

1) The presence of unqualified purchasing personnel’s makes Purchasing planning and control ineffective.

2) Due to frequent change of purchasing personnel’s, Purchasing planning and control in ANAMMCO becomes ineffective. 

Lack of effective improvement and change in Purchasing plans and control doesn’t led to lose of market to other competing firms by Anamco.

1.5 SIGNIFICANCE OF THE STUDY 

The significance of the stud is to draw the attention of other researchers in the field of business especially purchasing to be interested in the conduct of more indept research in the area of the Purchasing planning and control effectively. The idea will act as a framework ie to put the plan together to direct market managers on how to put the plan together so s to make it effective in formulating good Purchasing planning and control over foreign investor in Nigeria. The study will also induce business managers, entrepreneurs, purchasing managers, and sales managers to take proper care to develop a purchasing pan and control that will be devoid of the problem identified by the research in the study. This write up is also expected to teach young learners to serve as history for them during their own time of learning. Based on the findings, the researcher will work within his scope to provide some solution to the research problems and reduce unavoidable ones.

1.6 DEFINITION OF TERMS

Planning: Is deciding in the present what to do in the future. 
Control: A process of monitoring what has been planned 

Strategy: Is the pattern of major objective purpose of goal and essential 
Policies and plan for achieving those goal stated. 

Effectiveness: To be able to bring about the result intended. 

Manufacturing Organization: Those companies that produced good 
Either consumer goods or industrial goods for consumption or for further product. 

Qualified Purchasing Personnel’s: They are those purchasing that are  Competent in carrying out purchasing activities in an organization.

Goal / objectives: What the company intends to achieve. 

Potential Customers: Those people that may be the company’s products 

Market: Is the set of all actual and potential buyers of the company 
Product 

Market Opportunity: Is an area of buyer need in which a company can perform profitably. 

Purchasing Mix: Is the set of purchasing tools that the firm uses to pursue
its purchasing objective in the target market.

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