AN ANALYSIS OF THE IMPORTANT OF EFFICIENT PURCHASING IN A MANUFACTURING COMPANY

ABSTRACT

Negotiation as a reduction technique in material procurement is to ensure that high cost incurred in material procurement is managing hence the negotiation is one of the tool in spend cost management to optimize profit in every organization. Lack of knowledge to some guide when negotiating by procurement manages lead to high cost of finished product and it makes the product not to compete well with its competitors in the market. The impact expected at the end of negotiation is to minimize cost and maximize profit of the organization. In both private and public sectors between 50% to 80% of the total expenditure is spend on acquiring either materials or services. The high percentage of charges by company’s agent could lead to additional cost of production over invoicing and overpayment. What else can be done, and what other mean can be used to acquire raw materials without incurring high cost. To reduce high cost, negotiation is one of the technique of spend cost management to arrive at a mutually acceptable bargain by planning. Objectives and strategy in order to arrive at an agreed pace term and condition of service between a procures and supplier. To ensure prudence and judicious utilization of the limited resources available in an organization. To expose ideas to procurement manager on how to achieve the objectives and enhance the profitability of organization as materials procured when adequately negotiated reduce cost incurred in acquisition of material for production process. To expose purchasing manager to possible tools of spend and cost management. The major research question of what re the techniques for negotiation the strategies for effective negotiation, the rate of material availability, how coordination and management of suppliers to ensure cost reduction and constant flow of materials to avoid interruption at the point of production. The research Design would be descriptive and analytical in nature. Interview would be conducted on selected staffs of Production, Stock Control section, Human Resources and Procurement Department. The Instrument for data collection are Questionnaire, Record, Interview, Observation. This work also comprise of summary of findings, conclusions and recommendation.

TABLE OF CONTENTS

Title 

Approval

Declaration 

Dedication 

Acknowledgement 

Abstract 

Table of contents

List of table’s 

CHAPTER ONE: 

Introduction 

1.1 Background of the Study

1.2 Statement of the Problem 

1.3 Objectives of the Study 

1.4 Significance of the Study 

1.5 Scope of the Study

1.6 Research Questions 

1.7 Definition of Terms

CHAPTER TWO:

Literature Review

2.1 Negotiation 

2.2 Preparation for Negotiation

2.3 Negotiation Techniques 

2.4 Objectives of Negotiation

2.5 When to Negotiate 

2.6 Importance of Negotiation in Relation to Procurement 2.7     Cost Reduction     

2.8     Negotiation Process.

2.9     Qualities of a Good Negotiation.

2.9.0 Material Procurement  

CHAPTER THREE: 

Research Methodology

3.1 Area of Study

3.2 Research Design

3.3 Population of the Study

3.4 Sample, and Sampling Technique

3.5 Instruments for Data Collection

3.6 Administration of the Instrument 

3.7 Techniques for Analyzing Data  

CHAPTER FOUR: 

Presentation and Analysis of Data

4.1 Presentations of Results 

CHAPTER FIVE: 

Summary, Discussion, Conclusion and Recommendations

5.1 Summary of Procedure 

5.2 Discussion of Findings 

5.3 Implication of the Findings 

5.4 Conclusion 

5.5 Recommendations 

5.6 Suggestions for further Studies

5.7 Delimitation of the study  

Bibliography

Appendix