assignment for Purchase Management module. (Topic: The Impact of Efficient Planning and Control of Purchasing Activities on Firm’s Performance in A Manufacturing Company)

 

a                                         འབྲུག་རྒྱལ་འཛིན་གཙུག་ལག་སློབ་སྡེ།།

འཇིགས་མེད་རྣམ་རྒྱལ་བཟོ་རིག་མཐོ་རིམ་སློབ་གྲྭ།།

                        Royal University of Bhutan

Jigme Namgyel Engineering College

                                    Dewathang.

 

 

Group assignment for Purchase Management module.

(Topic: The Impact of Efficient Planning and Control of Purchasing Activities on Firm’s Performance in A Manufacturing Company)

 

 

 

 

Submitted by;

NAME	ENROLLMENT NO,
Mohan Regmi	05210225
Sonam Wangchan	05210336
Sonam Yangdon	05210337
Dechan Wangmo	05210312
Thinlay Gyaltshan	05210343
Sherab Dema	05210334

                                                                   Tutor:  Ms. Wangmo

                                                        Course: Diploma in Materials and Procurement                Management

 

 

ACKNOWLEDGEMENT

We owe special thanks to God and sincerely acknowledge our tutor Mrs. Wangmo for providing us with an excellent opportunity to do research work, and supporting us to upgrade our knowledge. To our parents, we are indebted for their support and encouragement that has brought us this far, may the Lord bless the work of their hands. Our appreciation goes to the entire community of The Jigme Namgyal Engineering College for the favorable learning environment. Lastly, we are grateful to the researcher for the work that we went through.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ABSTRACT

This is an exploration project on the requirement for powerful preparation and control in buying exercises, this paper presents a comparative analysis between various research. Some contextual findings of this research center around the need for arranging and control in all buying exercises both in public areas and private areas. In any case that this examination was direct on x, it contains reasonable investigation that will help both the private and public areas on the most proficient method to plan and control their exercises.

Also, the reader will find the investigations exceptionally sensible which will depict the condition of procurement on the whole company or organization. This work is organized in five-part, section one presents the work’s main aim, objective, and scope, and so part two contains the survey of related writing of different writers, section three is the technique used to accumulate, data for this research work, and part four analyses and presents the data for this project.

At last, a section of this work contains the conclusion and recommendations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENT

Si.no	Topic	Pages
1	INTRODUCTION	5
2	STATEMENT OF THE PROBLEM	6
3	AIMS AND OBJECTIVES OF OUR PROJECT.	6
4	LITERATURE REVIEW	7
5	CONCEPTUAL FRAMEWORK DIFFERENCE	8-9
6	FINDINGS AND RESULT	10-19
7	LIMITATION OF THE STUDY	19
8	CONCLUSION	19
9	RECOMMENDATIONS	20
10	REFERENCE	21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTRODUCTION

BACKGROUND OF THE STUDY
The need for effective planning and control in purchasing activities in any business organization be it small or, large. In any purchasing activity, effective planning and control is the fundamental and primary managerial function for any specific operation which made it essential for a successful strategy.
Implementation and strategy evaluation because all other elements of management depend upon good planning and this study is mainly carried out to compare research conducted in the various sector on how the concept of planning and controlling purchasing impact the performance of the firm.

The requirement for compelling preparation and control in procurement function in any business organization be it small or, huge. In any purchasing exercise powerful preparation and control is the crucial and essential for administrative capacity for a particular activity which made it fundamental for a successful system.

Execution and system assessment since any remaining component of the board relies on great preparation

PLANNING AND CONTROL CONCEPT
The only thing certain for the future of any organization is a change and planning, it is the Fundamental bridge between the present and the future.
Planning consists essentially of deciding ahead of time what you want to do and the way you are to do it. Planning is the application of rationale to make it compelling and efficient to meet the need and goals of the organization.

On the other hand, control is a management function that frets on taking the vital preventive or remedial exercises to guarantee that the organization effective and efficient as possible. The primary goal of planning and control is to ensure that the operations effectively and products and services needed by the organization to carry out these objectives are accessible, of the right quality, at the right time, and the right level of quality. Every organization requires planning and control but the degree of control and planning varies from one organization to another.

Planning and controlling activities the system, strategies, and decisions are which unite these entities. In other words, planning and control connect the resources of the firm and the performance of the organization. Typically, they do this, among a bunch of frameworks, and methodology, and choose strategies that product administrators can find in the ongoing running of their organization’s operation.

 

 

STATEMENT OF THE PROBLEM 
Procurement planning is one of the primary functions of procurement with the potential to contribute to the success of public institutions’ operations and improved service delivery (Basheka, 2008). The need for effective planning and control in purchasing activities has not been fully understood and is also not given importance by many companies. It is a comparative study of the research conducted in several fields such as Public companies, Government agencies, manufacturing companies, and remanufacturing companies.

Some of the problems commonly encountered by the industries are as follows.
1. Late delivery of materials to the sub- store from the central stores.

2. non-recruitment of professionals in the procurement positions, thus affecting the firm’s performance.

3. Many Organizations lack the knowledge of workstation design and equipment selection in prosecution.

4. Failure to implement or delayed in implementing recommended performance standards has resulted in high operation costs,

5. Unplanned and uncoordinated business activities,

 

AIM OF THE STUDY

The study intends to:

The study’s general objectives were to find out the effects of effective procurement planning on institutional performance, The specific objectives were; to analyze the effect difference of different research work in the field of effective procurement planning on institutional performance.

 

 

 

 

 

 

 

 

LITERATURE REVIEW

theoretical review

This study is not complete without going through numerous research papers done in various sectors by highly qualified scholars in advanced countries. It has Several literature reviews are taken into consideration given by different authors first one of them is the International Journal of Science and Research (IJSR),2012, Effects of Procurement Planning on Institutional Performance: A Case Study of Mombasa Law Court by Celestine Joan Onyango. Secondly, Effects Of Procurement Practices On Organizational Performance Within The Public Sector: A Case Of East African Portland Cement Company Limited By Rono Thomas Kipkemoi,2017. Thirdly, we have referred to Strategic purchasing, supply management, and firm performance (Injazz J. Chena, Antony Paulraja, Augustine A. Ladob,2004) and lastly, Journal of Operations Management, 2000(p.467–483) Production planning and control for remanufacturing: industry practice and research needs (V. Daniel R. Guide Jr.).

DATA COLLECTION

All the data used in our study is used from the research and literature work of the above research work. We refer to the works of other different authors which are closely related and which are helpful to come up with this project. We have referred several books on content related to the content of this project. Thus, all the data collected and used is from a secondary source.

 

 

 

 

 

 

 

 

 

 

 

 

 

Conceptual frameworks of two different research.

Conceptual frameworks are basic structures representing the systematized characteristics of the system. (Bogdan & Bilken 2003).

Figure 1 Conceptual Framework

 

Source: (Rono Thomas Kipkemoi,2017)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 2 Conceptual Frameworks

                   Independent Variable                                                        Dependent Variable

Source: (IJSR,2012)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, RESULTS, AND DATA ANALYSIS OF TWO DIFFERENT RESEARCH

 

Source for all Findings below: (RONO THOMAS KIPKEMOI,2017)

 

Category	Target population	Percentage
Procurement officers	15	13
Operations planning and logistics	13	12
Stores	59	53
Weighbridge	11	10
Corporate performance	3	3
Payables section	10	9
TOTAL	111	100

Table 1: Target population

Target Population This is the precise population on which data is needed and, in this case, they are members of staff from the Supply Chain Department; Procurement section, Operations Planning and Logistics, Stores, Weighbridge, and the staff from the Finance Department; Corporate performance (regulates purchases against budget) and Payables section (pays suppliers) at the East African Portland Cement Company Limited. (Rono Thomas Kipkemoi,2017)

Figure 3

 

 

Category	Target population	Sample size	Percentage
Procurement officers	15	8	53
Operations planning and logistics	13	7	54
Stores	59	30	51
Weighbridge	11	6	55
Corporate performance	3	2	67
Payables section	10	5	50
Total	111	58

 

Table 2 sampling design

Sampling Design and Procedure Stratified random sampling technique will be utilized to choose the sample. This is an estimate with precision. This is a sampling technique that relies on probability where the whole population is divided into subsections, then unsystematically selecting the final topics 16 uniformly from, unlike sections. Kothari (2004) states samples of approximately 10% can provide useful reliability. The sample selected was more than 50% of the entire population and therefore ample for the study. This technique has a high statistical accuracy which saves on time and resources. This technique uses the same sampling proportion for each division irrespective of the diversities in population size of the divisions. (Rono Thomas Kipkemoi,2017)

Figure 4

 

Category	Frequency	Percentage
Responses	46	79
Non-Responses	12	21
Total	58	100

 

Table.3: Responses Rate

The researcher circulated 58 questionnaires, and 46 of the 58 sampled respondents completed and gave back the questionnaires, contributing to a 79% response. A rate of response greater than 60% is considered satisfactory and good for analysis, (Mugenda & Mugenda, 2003). The lack of response for some of the questionnaires could be due to the lack of spare time in the busy environments the respondents operate in. Responses were obtained, analyzed, and presented in tables, graphs, and charts for ease of presentation. . (Rono Thomas Kipkemoi,2017)

Figure 5

 

 

 

 

 

 

 

Gender	Frequency	Percent
Male	36	72
Female	10	28
Total	46	100

Table.4: Distribution of Respondents by Gender

 

The outcomes of the research showed that 72 percent of the population sampled were male and 28 percent of employees who responded were female. . (Rono Thomas Kipkemoi,2017)

Figure 6

 

 

	Frequency	Percent
Managerial	7	15
Supervisors	17	37
General employees	22	48
Total	46	100

Table 5.: position in the procurement department

The respondents were requested to indicate the positions they held in their respective departments; 15 percent indicated they were in managerial positions, 37 percent indicated they were supervisors and 48 percent indicated they were general employees. All positions in procurement were covered in this study and therefore the information provided by the respondents was adequate for the research. . (Rono Thomas Kipkemoi,2017)

 

 

 

 

Figure 7

 

Source for all Findings below: (Celestine Joan Onyango,2012)

 

Department	Population	Sample	Percentage
Chambers	35	11	18.3
HRM & Admin	20	6	10.0
Finance Department	15	5	8.3
Procurement	10	3	5.0
Registries	108	31	51.7
IT	12	4	6.7
total	200	60	100

Table 7: sample population

The population was chosen to delimit the research and gather sufficient data within the time limit and cost. The target of the study was Mombasa Law Court employees comprising the judicial officers and paralegal officers. This was categorized as follows: Chambers, Procurement, Finance, and Human Resource Departments. The target was chosen because of the role they play in the procurement process in the Mombasa Law Court(Celestine Joan Onyango,2012). The respondents in this study were selected from the population of management and employees at MLC. A total of 60 employees which constituted 30% of the total population were selected using stratified and simple random sampling techniques. Researchers prefer using methods that provide high accuracy, generalizability, and explanatory power, with low cost, rapid speed, maximum management demands, and administrative convenience (Warwick and Lininger 1975-8).

Figure 8

 

Effects of procurement planning	F	%
Need assessment	35	58
Cost estimation	15	25
Quality specification	10	17

Table 8: effects of procurement planning

About the effect of procurement planning, proper need assessment, Procurement Cost Estimation, and Quality Specification. Need assessment was ranked first with frequency (35) and the highest percentage of 58%. Procurement cost estimation was ranked second with a frequency of 15 and a percentage of 25%. Finally, Quality Specification was ranked third with a frequency of 10 and a percentage of 17%. This result reveals that among the effects of procurement planning, need assessment was the major factor affecting procurement planning and pivot level of decision for procurement in any institution (Celestine Joan Onyango,2012).

Figure 9

 

Quality specification	Mean	Rank
Type of item to be produced	4.34	1
Financial capacity	4.37	2
User involvement in the specification	4.39	3
Professionalism applied	4.40	4

Table 9: (quality specification as an effect of procurement planning)

Findings results of quality specification as an effect of procurement planning ranked item to be procured highest `with a mean of 4.34 financial capacity of the institution ranked second with a mean grade of 4.37 and finally by procurement method applied mean of 4.39, fourth was the professionalism applied with a mean of 4.40. Results reveal that quality specification as a factor affecting procurement planning is best considered in the type of item to be procured. The user department while putting across their requisition needs to come out with specifications for their requirement which should be within quality standard measures(Celestine Joan Onyango,2012).

Figure .10

 

 

Management view	Mean	Rank
Financial capacity	4.34	1
Management style	4.37	2
Procurement office	4.9	3
Training	5.1	4

Table 10: (Factors that affect need assessment in procurement planning)

The above results show that the financial capacity of an institution was the major management view as it affects highly the need assessment of the user in an organization. The office may need certain items but considering the item might not be bought due to the financial capacity there is reluctance in the requisition. There is a major need for the institution to be flexible enough not to restrict the officers on the financial capacity of an institution since funds can be sourced from somewhere else be it the government or from anon governmental organizations. This automatically shows that procurement planning depends on the financial capacity of an organization, that’s the procurement office cannot plan to procure what the institution cannot afford hence affecting the need assessment of the users. The management style of an institution was ranked second and it affects need assessment (Celestine Joan Onyango,2012).

Figure 11

 

 

Factors	Mean	Rank
Cost estimation	4.0	1
Need assessment	4.1	2
Quality specification	4.2	3

Table 13: (ranking of all effects of procurement planning on organizational performance)

On ranking the above effects of procurement planning on an organization’s performance in Mombasa Law Court, Cost estimation was ranked first with 4.0, Need assessment was ranked second with a mean of 4.1 and finally Quality specification was ranked third with a mean of 4.2. (Celestine Joan Onyango,2012).

 

 

 

 

 

 

 

 

Figure .12

 

LIMITATION OF THE STUDY

The main limitation of the study is all the data and figure used is from the secondary source. The study is done to draw a comparative result but the very loophole is that all the research is not based on the same baseline. Thereby the consideration is not up to the excellent level.

Finally, the Sample sizing is not done in the study which has made the study too dependent on the research work of others.

 

CONCLUSION

Considering the finding, the acquisition enhances the supplier’s performance in service delivery. In particular, it has been arranged in the study that planning enhances value for money and it additionally helps in improving quality. It is in this way workable for the accounts department to forecast cash flow prerequisites and projections. Besides, arranging empowers advancement and appropriate use of assets and is likewise efficient. Further, arranging is a critical thinking method that guarantees cash is accessible to meet the cost of procurement contracts.

 

 

 

 

RECOMMENDATION

If supplier performance in service delivery is to be improved, procurement planning is critical. As a result, businesses must adopt procurement planning since it improves quality and reduces supplier payment delays. There is also a requirement for the Public Financial Management (PFM) to have a checklist that ensures that procurement of goods and services is done within budgetary approvals on funding sources to avoid payment delays. Procurement planning procedures should be evaluated as well, so that the exact votes may be used to power the required commodities, works, and services. Once procurement planning methods are implemented, there will be proper resource utilization, creativity, and problem-solving strategies. The PPOA's monitoring and evaluation (M&E) system should be strengthened to guarantee that procuring organizations use public resources efficiently and obey procurement law when carrying out procurement activities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REFERENCE

 

1.     Aref A. Hervani, Marilyn M. Helms, & Joseph Sarkis, (2005). Performance Measurement for Green Supply Chain Management. Benchmarking: An International Journal. Emerald Group Publishing Limited.

2.     Basheka, B.C. (2009), Procurement and Local Governance in Uganda: a factor analysis approach, International Journal of Procurement Management, Vol.2, No. 2, pp. 191-209.

3.     Carr, A.S., Pearson, J.N. (2002). The impact of purchasing and supplier involvement on strategic purchasing and its impact on a firm’s performance. International Journal of Operations and Production Management 22 (9), 1032–1053.

4.     The European Institute of Purchasing Management. (2004). Measuring Purchasing Performance: The role of purchasing measurement systems in strategy implementation. The 9th EIPM Annual Purchasing Conference. Haute Savoie, France: The European Institute of Purchasing Management.

5.     Lysons, K & Gillingham, M (2003) Purchasing & Supply Chain Management (6th Ed). Harlow, Essex: FT Prentice-Hall.

6.     The Government of Kenya (2005) Public Procurement and Disposal Act (2005) Nairobi

7.     Chena J. l., Paulraja A., Augustine A.  (2004) Strategic purchasing, supply management, and firm performance. Journal of Operations Management 22 (2004) pp.505–523

8.     Daniel R. V., Jr G.(2000) Production planning and control for remanufacturing: industry practice and research needs. Journal of Operations Management 18 (2000) pp.467–483

9.     Amelia S. Carr John N. Pearson, (2002), "The impact of purchasing and supplier involvement on strategic purchasing and its impact on firm’s performance", International Journal of Operations & Production Management, Vol. 22 Iss. 9 pp. 1032 – 1053

10.  Royal Government of Bhutan, Ministry of Finance.(2019) Procurement Rules and Regulations 2019.