ABSTRACT
This study
is a survey on the need for effective of vendor selection and rating of some
Nigeria companies, a case study of Nestle Food Nigeria Plc.
The study is aimed at identifying, assessing and
analyzing the various available methods of selecting suppliers in purchasing
department, for the best of store keeping and material handling.
The study also includes the examination of roles
of sales strategies and improvement on the prospect.
Primary data was collected by the means of
questionnaires analyzed and interpreted mainly with the use of simple statistics
and percentages.
The finding shows that own warehousing brokers/agent
VSRs, Rental outlet etc increase the rate of sales. In view of these findings some
recommendations were made. Suggestions were also offered for further studies.
TABLE OF CONTENTS
Approval page - - - - -
Dedication - - - - -
Acknowledgement - - - - -
Abstract - - - - -
Table of contents - - - - -
CHAPTER ONE
1.0 Introduction - - - - - -
1.1. Background
of the study - - - - -
1.2 Statement
of the problem - - - - -
1.3 Objectives
of the study - - - - - -
1.4 Research
questions - - - - - -
1.5 Relevance
of the study - - - - -
1.6 Scope
of the study - - - - - -
1.7 Limitation
of the study - - - - -
1.8 Definitions
of terms - - - - - -
CHAPTER TWO
2.0 Literature
review - - - - - -
2.1.1 What is sourcing and why do firms source -
2.1.2 Types of source - - - - - -
2.1.3 Sourcing methods - - - - - -
2.1.4 Methods of evaluating the sources of
suppliers
2.1.5 Sources of supplier selection - - - -
2.1.6 Suppliers catalogue - - - - -
2.1.7 Trade register and
directors - - - -
2.1.8 Trade Journal - -
- - -
2.1.9 Regional and
National trade show - - -
2.2 Sale Personnel - - - - - -
2.3 Filling of mailing process - - - - -
2.3 Other purchasing department in other companies
2.4 Need for effective vendors selection - -
2.5 Condition of selection of suppliers - - -
CHAPTER THREE
3.0 Research design and methodology - - -
3.1 Introduction - - - - - -
3.2 Research
design - - - - - -
3.3 Method of
data collection - - -
3.4 Population
and sample size - - - - -
3.5 Sample
techniques - - - - - -
3.6 Method
of data analysis - - - - -
CHAPTER FOUR
4.0 Presentation
and analysis of data - - -
4.1 Introduction - - - - - -
4.2 Presentation
of data - - - - - -
4.3 Analysis
of data - - - - - -
4.4 Test of
hypothesis - - - - - -
CHAPTER FIVE
5.0 Summary - - - - - -
5.1 Conclusion - - - - - -
5.2 Recommendation - - - - - -
References
Questionnaire
CHAPTER ONE
1.0 INTRODUCTION
Nestle Food Plc, case study of my project topic
is well known for it vendor selection and rating. The study of purchasing and
supply management can not be complete without proper selection of vendor and rating
of their performance.
The progressive manufacturing industries
realizing the contribution of supplies department of profit, have this
department to make the selection of supplier in order to maintain company’s own
competitiveness which will also enhance better supplier relationship, reliable
supplier performance, easier administration and fewer supply problems.
Vendor selection and rating is becoming of vital
importance in every manufacturing organization today in that it need for
effective cannot be over looked of every manufacturing company’s budget. Is on
materials, it is therefore very
necessary that materials which meet organization taste as regards to sources,
quality, price and delivery be given consideration. Prior to this, it is
therefore of great importance to ensure that proper supplier are selected and
rated according to their performance so as to ensure that proper suppliers are
selected and rated according to their performance so as to ensure the need of
the organization. It is therefore the
responsibility of purchasing and supply department to select the best supplier,
identify the major sources of information about potential supplier, through the
use of trade journals, exhibitions, sales representative, colleagues in the
company, professional associates, chambers of commerce and costly international
sources, these sources of information can be very useful to the success of
vendor selection.
The organization must function in one of the most
sensitive areas of vendor performance and rating. LAMER LEE JE AND DONALD W.
DOBBLER, in their text said upon completing of list of all potential suppliers,
a buyers (firm) next step is to evaluate each
of these suppliers individually. By process of elimination, a selected
list of vendors negotiate or solicit bids.
The vendor list should be comprehensive enough to
bring to best to every of competition desired, price technological competition
service competition etc.
Evaluation of company’s vendors is considered as
an effective tool for improving their
ability to serve more satisfactorily as a basis for making future purchasing
decision.
Finally, when suppliers have been selected, organizations
have ensured that they maintain and create a good relationship with their
suppliers as to maximize profit.
Management
must therefore ensure that proper supplier are selected and rated
periodically in order to contribute to the profit ability of the organization
so that purchasing and supply department will be accorded a high degree of
honour.
1.2 STATEMENT
OF PROBLEM
1. The
organization does not attach a lot of importance to vendor selection and
rating.
2. There
no qualified personnel available to handle the job vendor selection and rating
in the organization.
3. The
firm fears if is very costly to handle the issue of vendor selection and rating.
4. The
firm’s organization structure has negative effect on the effective performances
of vendor selection and rating.
OBJECTIVES
1.
To find out
whether the organization attach a lot of importance to vendor selection and
rating.
2.
To find out whether
the organization has qualified personnel available to handle the job vendor
selection and rating in the organization.
3.
To also find
out whether organization is fear of vendor selection and rating, because it is
very expensive to handle.
4.
To find out
whether the organization structure of the firm
has negative impact on the performance of vendor selection and rating
1.3 OBJECTIVE
OF THE STUDY
Research being a careful and systematic study
which aims at producing facts, information and solution to problems, so the purpose
of this study is to find out the important of vendor selection and rating in an
organization, it becomes imperative to this researcher that there is need to go
through the review of existing literaily works, which will help to know the
importance of using this technique (tools) vendor selection and rating.
Futhermore, this reserch work also will help to
find out the strategies of vendor selection and rating in Nigeria manufacturing
industriesso as to conduct an empirical finding into how suppliers are sourced,
selected, evaluated, rated and developed. It is also intended to highlight on
the development of goods supplier relationship, these area of exploration will
help to contribute to organization profitability. It is believed that after
this study, manufacturing companies which are not using this, will make
effective use of it.
Lastly, this work will also identify its draw
back and how to alleviate them and make
suggestion and recommendations that might help them.
1.4 RESEARCH
QUESTION
What is vendor selection and rating?
What are the tools (techniques) used in selecting
vendors?
To what extent can they be rated?
What are the strategies used in selecting
vendors?
How can vendor selection be of help to an organization?
Does vendor selection bring profitability to an organization?
What contribution has vendor selection made in an
organization?
1.5 SIGNIFICANCE
OF THE STUDY
This study
will be relevance to all organization viz:
Manufacturing industries because proper
selection, reliability, competitive price, long-term stability.
Selection and rating of supplier will enable
organization to maximize profit, since a huge sum of money is being invested in materials procurement,
strict adherence to the process of selection and rating of suppliers by the
firm.
Some of the managers were reluctant to give out
information fear of the information being traced back to them and consequent
loss of their job from the company.
This study is therefore important in the
following ways:
(i) It
will review the different strategies of vendor selection and rating.
(ii) It
will help manufacturing industries to select the right supplier and accurately
evaluate their performance.
(iii) It
will search as source of information/materials to other researcher’s who may
carryout research on the topic or similar topic.
(iv) Finally,
the work also help to increase the researcher’s knowledge on vendor selection
and rating.
1.6 SCOPE
OF THE STUDY
the geographical are study is Lagos. Lagos his undisputed
number of suppliers through which these products get to the buyers and finally
the end users. It has the highest concentration on purchasing activities in
Nigeria.
The study is limited to Nestle Foods Nigeria Plc
a major food processing company in the country. The level of participating
worker in this study is of managerial level senior managers and some selected
segment purchasing and supply staff.
1.7 LIMITATIONS
OF THE STUDY
Time and money are the great constraint of this
study. Consequent to the limitation of time and funds, the information for this
study was obtained mostly from Lagos. But for time and money a more comprehensive and in-depth study covering the
whole country would have been embarked upon. Also, because of time constraint and
the tradition of many Nigerians organization to regard certain information as confidential,
this study relied mainly on published documents.
Some of the managers were reluctant to give out
information for fear of the information being traced back to them and
consequent loss of their job from the company.
1.8
DEFINITION
OF TERMS
(1)
LEAD
TIME: It is not only the
possibility of lead time can itself be a factor in deciding order quantity. The
length of lead time can itself be a factor in deciding order quantity for
instance, it may be feasible to order a week’s supply at a time of some regular
requirement on a one-week lead time, but
it would be unreasonable to do this on a fifty-week lead time, with fifty small
order for the one item outstanding at any one time.
(2)
MINIMUM
ORDER QUANTITY: This is a
process by which the inventory is not allowed to fall below this level. In
order words, it supply men the minimum amount of stock that should be allowed
in the store.
(3)
LABOUTR
RELATION; This is very importance
factor the buying company to take into account. If labour discontent exists,
the buyer’s company could investigate the supplier’s wage structures and
suggest ways of improvement.
(4)
QUANTITY: it is not just to accept to make. The question is,
can the company meet capacity or engage in mass manufacturing so as to reduce
cost throughout economic production. When quantity is too small for economic
production, it is world wide to buy such a component.
(5)
QUANTITY CONTROL: It is necessary to have the assurance of quality control and
supervision when the process of fabricating the component are performed. The
desire to certain quality is very important.
(6)
VENDOR
SOURCES: It also very important, a
good supplier has well-developed sources or raw materials and components that
will ensure continuity of production during periods of fluctuating business
conditions.
(7)
SOCIETAL
CONCERNS: The extent to which a
vendor is evaluated in terms of it’s employment,
abatement policies, and resource conservation is the most controversial and
subjective aspect of vendor selection decisions.
(8)
LOCATION
OF THE SOURCE: It is very important
to know where the source is located. The distance will help the buyer adjust
lead time and prepare for transportation cost. It will also help the buyer to
identify the nearest branch or depots if they exist.
(9)
INVENTORIY
TURNOVER RATIO: This ratio is
the cost of goods sold divided by the average inventory. It indicates the
degree of efficiency in inventory management and the freshness and salability
of the inventory. If the ratio is low the firm is either over-inventionized or
undersold.
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