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Chapter One of The Role of Sourcing in the Achievement of the Profit Objective of an Organization ( a Case Study of Seven Up Bottling Company, Lagos)
The most important thing in the hierarchy of all organizations objectives is profit maximization, and this can only be achieved where organization is able, to meet their customers demand satisfactorily as at when due and for this objective to be met there must be a right source of supply that is, if the correct source decision is made in a particular instance, then the buying company’s need would be met perfectly. In such circumstances it would received the required goods or services at all times. Sourcing thus involves much more than simply picking a supplier or contractor for each requirement in isolation. It involves continuing relationships, both with preferred sources which are actually supplying goods and services, and with potential sources which may have been passed over for the present but are still in the running. It involves decisions about how to do business on. For its proper performance sourcing requires supply market research. This is a normal part of procurement and supply work, undertaken informally by buyers when they talk to representatives, visit exhibitions read trade journals and investigate the market before placing orders. In addition, it is the primary responsibility of purchasing to find out suitable sources of supply and ensure that the right quality and quantity of material is obtained at the right prices, and also spending time and effort in investigating and evaluating prospective supplies and continuously appraising the performance of current suppliers. In such a manner that there will be regular inflow of materials supply to avoid stoppage in production and its attendant costs and for the organization to be able to maximize its customer requirement in order to achieve its profit objective.
Statement of the Problem
Apparently in many organizations, it is clear to observed the effect of poor sourcing procedure in the award of contracts to the supplier who are not financially and technical capable of meeting the demand or the need of organization. This is often base on irrational decisions of many purchaser, as such the organization always suffer set backs in achieving their profit objective.
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Most other problems associated with sourcing ranges from high price of materials, late deliveries, supply of substandard products, mostly traced to inappropriate sourcing decisions.
Objective of the Study
The objective of this study is to assess role of sourcing in the achievement of the profit objective of organization of Nigeria bottling company Kaduna plant.
Specifically the study is set out to
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- To identify the sourcing policy employed by the organization in the procurement of materials need.
- To identify criteria for source selection.
- To identify the criteria used by the organization in rating their suppliers
- To identify the type of buyer and suppliers relationship.
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