THE SUPPLIERS AND BUYERS RELATIONSHIP IN A MANUFACTURING ORGANIZATION (A CASE STUDY OF DANGOTE FLOUR MILL, ILORIN)


THE SUPPLIERS AND BUYERS RELATIONSHIP IN A MANUFACTURING ORGANIZATION (A CASE STUDY OF DANGOTE FLOUR MILL, ILORIN)  

ABSTRACT

This project is to focus on the supplier’s and buyer’s relationship in a manufacturing and a case study of Dangote flour mills Ilorin. For easier understanding of the research work, the research will be divided into five chapters. Chapter one of this research work will contain introduction, objectives of study, statement of the problem, objective of the study, scope of study, limitation of the study, and definition of terms. Chapter two will contain the conceptual fraud work and literature review, introduction, definition of product, classification of products, products quality and value, products mix and products line, definition of packing, types of packaging, function of packaging characteristic of good package, factor contributing to packaging growth, and problem associated with packaging as promotion tools. Chapter three entails the research methodology, historical background, type of data used and method of data collection and population size. Chapter four contain the presentation and analysis, data presentation, analysis and interpretation, data analysis and testing of hypothesis. Chapter five contains the recommendation, summary, and conclusion, summary of findings, conclusion, and recommendations.

TABLES OF CONTENTS

Title page i

Certification           ii

Dedication          iii

Acknowledgement          iv

Proposal v

Table of contents          vi

CHAPTER ONE- INTRODUCTION

1.1 Historical background of the case study 1

1.2 An organization structure of Dangote flour plc 4 

1.3 Statement of the study 5

1.4 Aims and objective 6

1.5  Significance of the study 6

1.6 Scope and limitation of the study 7

1.7 Limitations and constraint 7

1.8 Definition of terms  8

CHAPTER TWO- CONCEPTUAL FRAUD WORK AND LITERATURE REVIEW

2.1 Introduction         12

CHAPTER THREE- RESEARCH METHODODLOGY

3.1 Research design         30

3.2 Sources of data         31

3.3 Population and sample size         31

3.4 Instrument used in data collection        35 3.5 Sampling procedure employed        33 

3.6 Statistical method of data analysis         33     

CHAPTER FOUR- DATA PRESENTATION AND ANALYSIS

4.1 Presentation of data analysis         35

CHAPTER FIVE- SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of finding         43

5.2 Conclusion         44 

5.3 Recommendation         45

References

Questionnaire

CHAPTER ONE

BACKGROUND OF THE DANGOTE FLOUR MILLS PLC.

Dangote flour mills plc recommenced operation in 1999, as a division of Dangote industries Limited [DIL]. One of Nigeria’s largest and fastest growing conglomerates. Following the strategic division of DIL to  unbundle its various operations. Dangote flour mills was incorporated in 2006, the restructuring was completed in January, 2006 when the federal High Court sanctioned a scheme of arrangement where in all the assets, liabilities and undertaking of the erstwhile flour division of DIL was transformed to Dangote flour mills.

From the initial installed capacity of 500MT per day at its Apapa mills, Dangote flour has expanded rapidly by opening in quick succession three other flour mills in Kano [2007]. Calabar [2001] and Ilorin [2005]. Each of the mills started with an installed capacity of 500MT per day but all of them have subsequently expanded resulting in a total installed capacity of 500MT per day distributed as follows:.

Apapa- 1,000 MT per day

Kano- 500 per day

Calabar- 1,500 per day

Ilorin- 1,000 MT per day

These expansions were in response to a national demand for flour and flour based products in addition to the company drive for increased market share.

Thus from a modest beginning the company has grown to become one of the industry leaders within a six-year period. The company has 3 wholly owned subsidiaries, namely Dangote agro sacks limited, Dangote pasta limited and Dangote Noodles limited.

1.1 HISTORICAL BACKGROUND OF DANGOTE FLOUR MILLS PLC.

The groups milling business was commissioned in 1999 and consists of facilities in Lagos-Apapa, Ikorodu, Kano and Ilorin. All mills have a combined milling capacity of 2.7 million metric ton per annum. The company imports hard wheat from the U.S which is then milled into 50kg bags of flour. The company also produces confectionery flour, semolina and Alkama – a grain consumed in Northern Nigeria. The flour milling business was operated as a division of DIL until January, 2006 when it was spain-off as Dangote flour mills plc [DFM].

The division has three wholly owned subsidiaries Dangote pasta limited, Dangote Noodles limited and Dangote Agro sacks limited.

BOARD OF DIRECTORS:- which comprises executives directors i.;e those involved in the day to day running of the company business and (external) directors who do not partake in the daily running of the company but have voting power at board levels on top company decisions.

The chairman is assisted by the vice chairman has size (6) executives director namely.

Mr. Olakunle Alake Operating officer

Mr. Knut Ulvmoen Managing director

Alhaji Abdul Dangote Logistic and distribution

Alh. Sada Ladan-Baki Transport manager

Alh. Tajudeen Sijuade Accountant 

These directors formulate policies in their directorate that the adjudge would facilitates efficient running their directorates. The directorates are divided into division and the division are divided into smaller units called department assistant managers and supervisor.

Each manager performs specific and report to his divisional heads who will brief the manager director and Deputy managing director.

Problems are solved at the directorate level except a major policy shift is imminent before the managing directors are involved.

Below is the organizational structure.

MANAGING DIRECTOR

DEPUTY

MANAGING DIRECTOR

INVESTMENT

PERSONNEL

PRODUCTION

COMMERCIAL

FINANCES

1.2 AN ORGANIZATONAL STRUCTURE OF DANGOTE FLOUR PLC.

DIRECTOR DIRECTOR DIRECTOR DIRECTOR     DIRECTOR

SURPLIER MANAGER PURCHASING MANAGING  STORE

MANAGER CLEARING MANAGER

ASSISTANCE ASSISTANCE ASSISTANCE

PURCHASING MANAGER STORE MANAGER CLEARING MANAGER

PURCHASING CLERK STORE ATTENDANT  OFFICE ASSISTANT

Buyer and supplier relationship is a continuous exercise and when carried out this programme, there certain problem being faced by the company under study.

One of the problem is the rating of supplier on the basis of service depends on the buyers institution which is not from bias.

Another problem facing the management of the company under study is how to evaluate suppliers on the basis of service thereby eliminating unfair judgment by the buyer. In addition, another problem which the writer is agitating is that whether supplier evaluation has a positive impact on the procurement function. The problem is question are:- 

How can a buyer enjoy better services?

Does supplier evaluation enhance effective procurement?

More so, inefficient sourcing buying and suppliers system make for inefficient sourcing management of the organization, this affects the production and profit level and the high increase of exchange rate in the foreign materials have an adverse effects on the level of production and on the level of effective sourcing performance in Dangote flour mills.

1.3 STATEMENT OF QUESTION

Statement of question; this study is conducted to address the gap in the literature. It offers three important questions that had not been previously investigated in other studies and in the Dangote flour mills. What is the extent of Dangote Flour Mills management practice in Dangote flour mills. Does Dangote flour mills practice affect firm performance?

1.4 AIM AND OBJECTIVES OF THE STUDY

Dangote flour mills are committed to best practice and procedures in corporate governance overseen by the Board of Directors. Corporate under review in line with the dynamics of the business environment. The corporate governances policies adopted by the Board of Directors are designed to ensure that the company’s business is conducted in a fair honest and transparent manner which conforms to high ethical standard.

1.5 SIGNIFICANCE OF THE STUDY

The researchers work was designed to know the cordial relationship between buyer and supplier in a manufacturing organization, also the research work will be useful to aspiring student of purchasing and supply in the polytechnics and universities.

The recommendation at the end of this research study will be relevance to the organization chosen as a case study of Dangote flour mill plc Ilorin.

1.6 SCOPE OF THE STUDY

The research work is based on the supplier and buyer relationship in manufacturing organization with the consideration to purchasing activities of Dangote flour mills plc, Ilorin Kwara State.

The scope of the research centers its attention on the supplier and buyer relationship. The objectives of the purchasing in achieving organizational goal. The sources if materials used, buying decision. Also, it covers the review of literature text books where the contribution of different authors, scholars, and professional concerning the study were reviewed and acknowledge.

1.7 LIMITATION AND CONSTRAINT

In any research work there must be one or two problems to be encountered before having a successful finding. 

One if the problems faced was the lack of co-operation from staff of Dangote flour mills plc.

Find and time has been one of the major constraints in carrying out this research work, another problem faced was that staff of Dangote flour mills are afraid of gin=ving accurate information in other not to expose them.

1.8 DEFINITION OF THE RELATED TERMS

In the process of reading this project, one will come across some words or phase which may not be familiar. It is useful to keep the record of such expressions in the future project from the time to time. Quality control is a procedure or set of procedures intended to ensure that a manufactured product or performed services adheres to a defined set of quality criteria or meets the requirement of the client or customer.

AN ORDER

An order can contain a variety of information such as item information, subtotal, shipping, discount and tax information total order cost customer name address currently used, the date the order was place.

DELIVERY

Delivery is the process of transporting goods which can be through road, air, seas or rail.

INSPECTION

An inspection is an organized examination exercise, it involved the measurement, test and gauges applied to certain characteristics in regards to an object or activity. 

STANDARD

Standard is the performance levels and characterized that have been determined as a general expectation for a given commodity.

SPECIFICATION

A specification that make requirement for technical aspect of  a commodity, which eliminates competition.

WAREHOUSE

This is a structure designed for storage materials.

QUALITY

In the purchasing context , it refers to the suitability of items for its intended purpose. It is related to suitability of items for its intended purpose. It is related to suitability of items for its intended purpose. It is that which can be purchased at the lowest post to fulfill the need or satisfy.

QUOTATION

This can be determined by present market price. It is the exact price at which the supplier is ready to dell out their materials to the buyer.

SUPPLIER

Any individual or company who agrees to provide materials regardless of whether that party is manufacturing.

SUPPLIER DEVELOPMENT

Supplier development can be define as any efforts a buying firm expands on a supplier to increase the buying firms own short term of long term needs.

AGREEMENT

It is a bargaining between parties in dealing with one another such as maybe applied in procuring of defined terms and performances.

STOCK CONTROL

Determining the usage rate of an inventory and controlling the level of support deemed acceptable by the warehouse operations management.

SOURCING

It is the proactive management of a supply market to ensure access to adequate resources required for long term needs of the organization.

LEED TIME

It is the delivery periods i.e. the time between the ordering and delivery. It is an essential tool in setting stock, failure to put into consideration may result to serious production protection problem.

PURCHASING REQUISITION

Is a document generalized by an internal organization to notify the purchasing department of items it needs to order their quantity and the time frame. It may also contain the authorization to precede with the purchase? It is also called purchase order request.   

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THE SUPPLIERS AND BUYERS RELATIONSHIP IN A MANUFACTURING ORGANIZATION (A CASE STUDY OF DANGOTE FLOUR MILL, ILORIN)



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