CHAPTER ONE: Introduction
1.1 Background of the Study
Material Sourcing is a set of tangible physical attributes assembly in an identifiable form. That is given the rapid changes in taste, technology and competition, organization will not rely solely on its existing supplier but look forward to get better sources of materials.
An organization can use three ways to minimize cost of sourcing materials, by interviewing her customers, by negotiation with the suppliers, by sourcing for better materials, we mean original material that can go into production and come out with quality product; and in the study, we will be concentrating on material sourcing as a way of increasing an organization’s profitability.
As a matter of fact, sourcing for the right material is like human being whose life span has to be treated to keep it working in order to add value, profit to the organization in the view that organization will not die subsequently. The death of organization lays on the fact that proper material are not acquired.
In the light of the above, it is necessary for organization will adopt the system of sourcing for materials to develop and grow their profitability, to achieve this successfully, sourcing strategies are required to be adopted, these are right material, right price, right negotiation, right place, right qualities, right quantities, right sources, right time etc.
In a nutshell, the study will dwell mainly on the impact of material sourcing to maximize organization profitability.
1.2 Statement of the Problem
Most organization especially production oriented organization like Nigeria Breweries spent about 60% to 70% of its annual expenditure on the acquisition of raw materials. Some of the major problems confronting any manufacturing industries are: high cost of materials will affect profit margin of the organization and also incompetence of supplies, if the suppliers are not competent in making right qualities supply will become problem to organization in profitability area.
High cost involved in sourcing suppliers whole material needed for organization. Improper sourcing policy, sourcing for organizational profitability need to be proper that right material will be supplied.
1.3 Objectives of the Study
The purpose or objectives of the study is to examine the impact of material sourcing in enhancing the organizational profitability, its importance, how effective and efficient it is to the overall achievement of the organizational goal and objectives. Under the aspect, the researcher hope to realize the following:
1.4 Significance of the Study
This research work is conducted primarily to meet the requirements of obtaining the award of Higher National Diploma (HND) in Purchasing and Supply in Kaduna Polytechnic, Kaduna abides being an academic research. The study will add to the knowledge of the interested individual or group on the subject matter.
The researcher chose this topic to highlight the inherent danger and consequence of adopting poor performance in material delays as problem associated with sourcing with a view of providing solution or applied to sourcing activities in the organization like Nigeria Breweries Plc. It will show the impact in the organization performance and profitability in Nigeria Breweries.
Another vital reason of the study is to contribute to the existing literature in the area of sourcing, types of sourcing, sourcing policy, sourcing process etc for future reference. It will enable a layman in the profession to have first hand information on bio sourcing activities is being carried out. Also the students of the department and other department will find this project an important relevant source of literature review in the area of sourcing ‘material sourcing’ further study will suggest ways that the organization can carryout its sourcing efficiently.
1.5 Scope of the Study
The research will be looking at improve on materials sourcing for organization profitability. This chapter will make use of population size of 100 staff and the research will use the sample size of 20 was adopted from the population of which describe the characteristics of the population.
Secondly, this chapter will strict to the procurement, production and administrative department. The study will take activities of materials and sourcing of Nigeria Breweries Plc in the last 5 years from 2009 to 2013.
1.6 Research Questions
The research question includes:
1.7 Definition of Terms
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