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THE IMPACT OF EFFECTIVE PLANNING AND CONTROL ON THE PURCHASING ACTIVITIES OF A MANUFACTURING COMPANY

ABSTRACT

A company will have stated objectives, but the individual manager must interpret what company officials actually say and do. For example: chief executive financial officers (CFOs), backed by the law of the land, will usually stress their responsibility to the stockholders. But the company’s objectives are usually composites of many decisions, resulting in various cross-functional compromises. So in actual practice the CFO’s goal is to balance the objectives of a fair return on investment to stockholders, stable and satisfying employment for employees, satisfaction of customers and the community, and so forth. In setting procurement’s functional objectives, the Purchasing Manager must be aware of the CFO’s (and accordingly, the company’s) objectives, and ensure consistency in constructing the specific objectives for the purchasing department. With increased focus on meeting customer needs more effectively, many enterprises have begun to evaluate the results of the entire supply chain in satisfying these needs. This has given rise to the concept of competition between supply chains rather than merely between companies. Consequently, the importance of supplier contributions to enterprise results has further increased expectations of the supply management organization.

The evolution of purchase planning system from a clerical task to a strategic value chain makes it a means of creating competitive advantages for organizations. Generally, this development happens slowly with no previous design and plan in organizations. Therefore, to mitigate risks of this change and to increase its effectiveness, this development process should be carefully structured and planned. In this paper, in order to achieve a purchase planning system transformation model, purchasing development models are used as a basic framework. By benefiting of organizational change concepts and theories, the reference model has been designed as a tool to assess the current purchase planning system development situation and the potential strategic growth path. Finally, relationships between purchasing content change elements development have been identified as a departure point to develop the purchasing transformation strategy. In the empirical research path, this exploratory research has an inductive approach and the strategy by which the research is conducted is grounded theory. Case studies are the chief tools for data collection and analysis.

CHAPTER ONE

INTRODUCTION

1.0 BACKGROUND TO THE STUDY

The important of effective planning in purchasing activities in any business organization be it: small or large is an obvious and important. In any purchasing activities effective planning is the fundamental and primary managerial function for any sp w operation which made it essential for successful strategy implementation and strategy evaluation because all other element of management depend upon good planning and control.

PLANNING CONCEPT

The only thing certain for the future of any organization is change and planning is the essential bride between present: and there future. In designing and maintaining an environment for effective performance of individuals working together in groups the most important task is to see that: purpose and objective and method of attaining them are clear understood. Planning consist essentially of deciding in advance what you want to do and the way you are to do it planning is the application of rational with the aim of making  of more effective and efficient responding to the need and goals of the organization.

1.2 STATEMENT OF PROBLEMS

Some years back and even in recent: time many company have been faced with the problem of planning in the sense that they have not recognized the importance of effective planning in purchasing there materials. The issue of effective planning in purchasing activities in any business organization helps the organization to get quality materials from a good supplier at the right time. Most times the organization will have a problem of getting good material due to lack of planning. Sometime it might be lack of planning of efficient of the supplier to supply at the right time. Therefore this research is aimed at solving the problem that will occur when planning step is not taking and offering good way to be used in planning step.

1.3 OBJECTIVE OF THE STUDY

This research work is to consider the requirement in planning effectively of getting the organizational materials, recommending alternative channels of planning and also resolving the common conflicts that are common in the planning section of any organization. When these is done some of these objective will be achieved for this study.

1. Emphasize the importance of planning

2. Suggesting alternative ways for effective planning

3. Studying other ways for effective planning

4. The present planning step that is being used will be examined in detail and its effectiveness assessed.

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