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TITLE PAGE

INTERNATIONAL PURCHASING AND ITS JUSTIFICATION

BY

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EE/H2013/01430
DEPARTMENT OF ----
SCHOOL OF ---
INSTITUTE OF ---

DECEMBER,2018

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APPROVAL PAGE

This is to certify that the research work, "international purchasing and its justification" by ---, Reg. No. EE/H2007/01430 submitted in partial fulfillment of the requirement award of a Higher National Diploma on --- has been approved.

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DEDICATION
This project is dedicated to Almighty God for his protection, kindness, strength over my life throughout the period and also to my --- for his financial support and moral care towards me.Also to my mentor --- for her academic advice she often gives to me. May Almighty God shield them from the peril of this world and bless their entire endeavour Amen.

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ACKNOWLEDGEMENT

The successful completion of this project work could not have been a reality without the encouragement of my --- and other people. My immensely appreciation goes to my humble and able supervisor mr. --- for his kindness in supervising this project.
My warmest gratitude goes to my parents for their moral, spiritual and financial support throughout my study in this institution.
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International sourcing emerged initially as a reactive approach designed to reduce production costs in an effort to neutralize the threat of foreign competition. Today, leading edge firms have shifted the focus of their international sourcing efforts to that of a proactive strategy that pursues a sustainable competitive advantage. This article explores the challenges, requirements, and benefits of international sourcing by means of a brief literature review and a discussion of the results of a survey of purchasing managers. The study focuses on the various aspects of international sourcing that affect its ability to impact a firm's competitiveness.

TABLE OF CONTENT
COVER PAGE
APPROVAL PAGE
DEDICATION
ACKNOWLEDGEMENT
TABLE OF CONTENT

• STATEMENT OF THE PROBLEM
• OBJECTIVES OF THE STUDY
• GENERAL OBJECTIVES
• SPECIFIC OBJECTIVES
• SIGNIFICANCE OF THE STUDY
• SCOPE OF THE STUDY
• RESEARCH QUESTIONS
• RESEARCH HYPOTHESIS
• HISTORICAL BACKGROUND OF THE CASE STUDY
• DEFINITION OF TERMS

CHAPTER TWO

• CONCEPTUAL FRAMEWORK
• THEORETICAL REVIEW
• THOERY CONSTRAINTS
• EMPERICAL REVIEW
• GAP IN LITERATURE

CHAPTER THREE

• INTRODUCTION
• RESEARCH METHOD USED
• SOURCES OF DATA
• DATA COLLECTION TOOLS
• RESEARCH POPULATION AND SAMPLE SIZE
• SAMPLE SIZE AND SAMPLING TECHNIQUE
• STATISTICAL METHOD USED IN DATA ANALYSIS

CHAPTER FOUR

• DATA PRESENTATION AND ANALYSIS
• HYPOTHESIS TESTING

CHAPTER FIVE

• SUMMARY OF FINDINGS
• CONCLUSION
• RECOMMENDATIONS  

CHAPTER ONE
INTRODUCTION

1.1 BACKGROUNG TO THE STUDY

As more and more manufacturing firms have realized the importance of supplier performance in establishing and maintaining their competitive advantage, purchasing research has tended to focus on supplier development programs and explore how these initiatives impact on buyer and supplier performance (Humphreys, 2001) which eventually leads to organization improvement.
Supplier development is the process of working collaboratively with suppliers to improve or expand their capabilities (Charles Dominick, 2006). Supplier development contributes to the companies in terms of “creation and maintenance of appropriate suppliers, quantity, technicality, cost capability and delivery with continuous improvement” (Rajput and Bakar, 2012). It is a bilateral effort by both the buying and supplying organization to jointly improve the supplier’s performance or capability in one or more of the following areas: cost, quality, delivery, Time to market, environmental responsibility and managerial capability and financial viability (Krause & Handfield, 2011).
According to Lascellas and Dale (2008) there are reasons why supplier development has become a key element in maintaining or improving a company’s competitiveness which in turn leads to organizational improvement. Firstly, technological and competitive pressure has resulted in a great trend towards specialization. Secondly, the nature of competition itself has changed. Feigenbaum, among others postulates that effective international competition is a combination of competition in its traditional and visible form (product versus product) and an equally powerful, but less visible, form of competition involving companies skill in implementing and managing a process of total quality management of which suppliers are vital parts.
As an international company EABL recognizes that achieving high standards are aspirations presents unique challenges in different countries. Therefore EABL understands that while there will be varying degrees of performance, they strive for continuous improvement with their suppliers and they consistently drive up standards together to achieve excellence. They also appreciate that the they work will consistently offer support to their suppliers in achieving minimum standards thus the supplier development program (Ireland, 2014).

1.2 STATEMENT OF THE PROBLEM

Facing up to the challenge of stiffer competition and having to supply the global markets, manufacturers have quickly learned the importance of improving productivity and quality (Erasmus, 2006) suppliers play a very vital role in the production value chain. They indirectly determine the quality of the final product. There is therefore need for the manufacturing firms to put in place measures to develop and equip suppliers with prerequisite skill in order to ensure quality supplies and this is done through supplier development EABL face a major challenge in its production processes because of the increasing cost of barley and hops.
There is a constant spike in the commodity price of barley which is sorghum based (Ogunda, 2013). This is reflected in the slow improvement in its profit margins which is seen in the EABL 2013 annual report. Between April and July 2012, the price of barley increased by 26.06%. This exposes EABL to a significant rise in the price of the inputs used in producing beer (Euromonitor, 2012). According to Ireland, (2013) managing Director, East Africa Breweries Limited, on raw materials, EABL has a strategy which is supplier development that maximizes the amount of raw materials, EABL has a strategy which is supplier development that maximizes the amount of raw materials from the beer that is sourced locally and the benefits of this, is reducing the exchange rate risk, reducing the exposure to imports, security of supply, lowering costs thus the success in the supplier development is not a foregone conclusion.
While many researchers in Kenya like Ochieng 2914 and Ritich, Abura & Kihava 2014 have researched on supplier development, there is limited research on the role of supplier development on the organizational performance of manufacturing industry specifically in Kenya a factor that requires extensive research. Again many researchers like (Krause, 2007) and Humphreys 2003 have dealt with supplier development and specifically on how it impacts on the buyer – supplier performance thus little has been researched on its impact to organization performance.
It’s in this reference above that the researcher investigated the role of supplier development on organizational performance in manufacturing industry in Kenya and with specific focus on East African Breweries.

1.3 OBJECTIVES OF THE STUDY

• GENERAL OBJECTIVES

The general objective of this study was investigating the role of supplier development on improving organizational performance on manufacturing industries. A case study of EABL

• SPECIFIC OBJECTIVES
• To establish the role of training suppliers on organizational performance of East African Breweries Limited.
• To determine the role of rewards on organizational performance of East African Breweries Limited.
• To establish the role of financial support on organizational performance of East African Breweries Limited.
• To establish the role firm involvement on organizational performance of East African Breweries Limited.
  
  1.4 SIGNIFICANCE OF THE STUDY

The researcher hopes that the findings of this study will form the basis on which future researchers could be built and most importantly the practices of manufacturers with respect to supplier development and supplier performance evaluation will help EABL to provide supplier development as value added services to their potential customers and finally the study will contribute to the body of knowledge in the field of manufacturing industry.

1.5 SCOPE OF THE STUDY

This research work will cover purchasing for organization thus its scope will be based only on international purchasing aspect.

• Theoretical Scope: this refers to the area to be covered during the period of research work. The area to be discussed shall be limited to purchasing and supply.
• Geographical Scope: the researcher shall offer useful suggestions where necessary so that the organization could be able to advice much for progress and make valuable contributions to see the economic depression of this great nation.
• Industrial Scope: the researcher will focus more attention on the purchasing department with particular reference to Nigerian Bottling Company, Lagos. As regard to their activities.
• Time Scope: this is where the researcher would use his time to spend for collecting data from the organization in order to get facts from them.
  
  1.6 RESEARCH QUESTIONS

• To what extent does the role of training suppliers to improve organizational performance of East African Breweries Limited?
• How does the role of rewards improve organizational performance of East African Breweries Limited?
• To what extent does the role of financial support improve organizational performance of East African Breweries Limited?
• How does the role of firm involvement improve organizational performance of East African Breweries Limited?
  
  1.7 RESEARCH HYPOTHESIS

Ho: international purchasing does not have impact on organizational performance.
Hi: international purchasing has impact on organizational performance.
Ho2: international purchasing does not increase organizational growth.
Hi2: international purchasing increases organizational growth.
Hypothesis 3 (H3): Sp practices are positively related to quality and operational performance.
According to Walker et.al [9], organizations must look across their entire supply chains to effectively address social and environmental impacts. Publications over the last decades shows that SP has been seen as capable of delivering significant environmental benefits by practitioners, policy – makers, and academics, and SP practices have been seen as more powerful agents of change than any other corporate functions to reduce the environmental impacts caused by business actions [30]. It has also been reported that SP practices significantly impact and improved social wellbeing in the UK. This finding is aligned with the conclusions of other studies which reported a positive relationship between the adoption of green SP practices and improvements in social and environmental performances [2, 31]. For example, Guenther et.al [31] stated that green procurement implementation in Germany has reduced the sources of waste and promoted recycling and other environmental benefits; Adams et.al [32] found SP implementation a key enabler that alleviated environmental issues, and provided social benefits.
The BECD [33] also reported that sustainable procurement practiced in Switzerland resulted in high “environmental and social standards throughout the product lifecycle”.

1.8 HISTORICAL BACKGROUND OF THE CASE STUDY

Nigerian Bottling Company Limited: Background and Milestones.
As pioneer bottler in the group, NBC prides itself as the bedrock of coca – cola Hellenic. The company is head – quartered in Ebute – Meta, Lagos and operates 13 bottling facilities, 28 commercial territories and 57 distribution depots across the country.
As written earlier, Nigerian Bottling Company Limited was incorporated in November 1951, as a subsidiary of the A.G. Lenventis Group with the franchise to bottle and sell products of the coca – Cola Company in Nigeria.
Two years later, in 1953, the production of coca – cola began at a bottling facility in Ebuta – Meta, Lagos state. In the same year, the company opened its first Bottling plant in Apapa. In 1960, the year the Nigerians gained independence, the Nigerian Bottling Company exceeded the one million cases a year mark.
NBC in 1961 commissioned its second Bottling facility at Ibadan, oyo state and rapidly expanded its operation over the next couple of years which today stands at 13 facilities and 57 depots across the country. In 1972, NBC became a publicly quoted company and listed its shares on the Nigerian stock exchange. NBC acquired Eva premium water and Schweppes brands in 1991. In 2000, NBC became a member of the newly formed coca – cola Hellenic Bottling Company S.A. (an anchor Bottling group with operations in 28 countries worldwide).
The first ultramodern fully automated NBC plant was commissioned in Benin in 2001. NBC launched 5Alive juice brand in 2003; PET packaging for its sparking soft drinks category in 2004; and 33cl can in 2007. In 2008, NBC introduced the more environmentally friendly ‘ultra’ glass packaging for its Returnable Glass Bottle product segments.
In September 2010, NBC was recognized by the Lagos state government for its support of the ‘support our school’ project with the 2010 LASG CSR Award. In October 2011, NBC was awarded the Social Enterprise Reporting Awards (SERAs) for the ‘Best Company in Environment’ for its PET Recycling Project jointly implemented with coca – cola Nigeria Limited as well as for the ‘Most Socially Responsible Company in Nigeria’.
In November 2011, NBC became the first company in Nigeria to receive the food safety system (FSSC 22000) certification. In February 2013, NBC was voted by consumers as the Best in product Excellence at the Nigerian construction Awards organized by the consumer protection council (CPC). In April 2013, coca – cola Hellenic HBC AG was listed on the premium segment of the London Stock Exchange.

1.9 DEFINITION OF TERMS

C.I.F: this simply means cost Insurance freight which indicates that the seller is responsible for the goods until they get to the port of destination and the selling price includes ocean freight and insurance up to that point.
Duty: payment made to the government either for import or export.
C and F: cost freight this is similar to C.I.F except that buyer has to pay for insurance charges.
Bill of Lading: this is document similar to delivery note used in shipping. The sender retains one copy which is held by the master of ship and not also for consignee.
Port of Entry: this is importer buyer country port i.e. through which consignment will enter its country of destination.
E.T.D Estimated Time of Departure: this is send to the importer stating the time the vessel leaves the port of the exporter.
E.T.A Estimated Time of Arrival: it is a note sent to the importer giving him the time consignment will arrive at his country port.
C.R.F Clean Report of Finding: pre – shipment inspection of goods to be shipped to Nigeria must be ensured that they are of correct quality and that only normal contract material importer is shipped.
Carrier: this company offering the service of transporting goods from one area to another.
F.O.B Free on Board: this is a contract in which goods are delivery to the ship (no board).
Consignment Note: a note accompanying consignment of goods indicating quality description, number of package in the consignment.
Consignee: the person or company to when goods are addressed or sent.

Commercial Invoice: the invoice is often employed as basis for custom clearance at the port importation

1.10                                                    PLAN OF THE STUDY
This study is basically divided into five (5) chapters.
CHAPTER ONE: Takes on the introduction of the subject matter. If consists of the super significance and definition of terms of the study.
CHAPTER TWO: This is the literature review this entails the works that had been done on this particular topic which was done by other researchers.
CHAPTER THREE: Will talk about the Methodist that the researcher adopted in getting necessary materials or information that will facilitate the success of the research work.
CHAPTER FOUR: Explain how the researcher was able to analysis and present the data he got for his work while the chapter:
CHAPTER FIVE: Brings everything to conclusion the researcher does his summary and give necessary recommendation where needed.

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CHAPTER TWO: The chapter one of this work has been displayed above. The complete chapter two of "international purchasing and its justification" is also available. Order full work to download. Chapter two of "international purchasing and its justification" consists of the literature review. In this chapter all the related work on "international purchasing and its justification" was reviewed.

CHAPTER THREE: The complete chapter three of "international purchasing and its justification" is available. Order full work to download. Chapter three of "international purchasing and its justification" consists of the methodology. In this chapter all the method used in carrying out this work was discussed.

CHAPTER FOUR: The complete chapter four of "international purchasing and its justification" is available. Order full work to download. Chapter four of "international purchasing and its justification" consists of all the test conducted during the work and the result gotten after the whole work

CHAPTER FIVE: The complete chapter five of design and construction of a "international purchasing and its justification" is available. Order full work to download. Chapter five of "international purchasing and its justification" consist of conclusion, recommendation and references.

 

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