THE NEED FOR EFFICIENT SUPPLY MANAGEMENT IN THE PUBLIC SECTOR
(A CASE STUDY OF MINISTRY OF FINANCE
A RESEARCH WORK PRESENTED TO THE DEPARTMENT OF PURCHASING AND SUPPLY,
SCHOOL OF BUSINESS AND MANAGEMENT TECHNOLOGY, ------------
IN PARTIAL FULFILLMENT FOR THE REQUIREMENT OF THE AWARD OF ------------ IN PURCHASING AND SUPPLY MANAGEMENT
The need for Efficient Supply Management in the Public Sector.
(A case study of ministry of finance (Imo State)
A Research Project Presented to
The project committee, Department of Purchasing and Supply ----------------------
Mr. ----------------- Date
Chief O.K Oyeoku Date
External Examiner Date
This work is dedicated to God Almighty for his infinite mercies and grace on me throughout the research work.
Also, my loving parents MR. / MRS. ---------------- for their kind support for making it possible for my dream as a graduate to be a reality. I wish them long life to reap the fruit of their labour by the profound grace of God.
It is with deep scene of gratitude that I express my appreciation to those who assisted me morally, financially academically and otherwise throughout this, training period.
Finally, my profound gratitude goes to my supervisor Mr. ----------------- who is always behind me with advice, at the same time offer help where necessary.
Again, my profound gratitude goes to my Head of Department ------------, Mr. ---------------, Mr. -------- and Mr. ------------ for the knowledge the impacted on me.
I must not fail to thank the workers of ministry of finance Imo State especially the supply department for providing me key information for this study.
I most sincerely remain indebted to my beloved parents Mr. & Mrs. -------------------, my beloved wife and son. And all the members of my family who have suffered with me during this period of time.
However, I also thank my boss Mr. ---------- assistant financial controller Mr. --- store manager. Mr. ------------ Purchasing Supervisor all in Imo concord Hotel Owerri, Imo State, and others who have rendered valuable advice in this project.
Finally, I will like to extend my appreciation to all the lectures in purchasing and supply department. Above all things I am totally indebted to God Almighty for his inestimable love and protection towards me.
The research project concerned the need for efficient supplies management in the public sector with special reference to ministry of finance Owerri, Imo State.
This commence with introduction, background of the study, stating the origins, mode of supplies are being carried out.
Chapter two highlights the literature review both related and unrelated that help in the work.
Chapter three was how the datas are being collected, it highlight the sources of data collection.
In chapter four, the work focuses on discussion of findings made with a view to highlight a sound basis for some possible solution.
While chapter four is the climax of the research study.
The summary, conclusion and recommendation which if adhered, will help in the need for efficient supplies management by using someone with professional qualification.
TABLE OF CONTENT
Title page i
Approval page ii
Table of content vi-viii
1.1 General overview 1-4
1.2 Statement of the problem 5
1.3 Objectives of the study 5
1.4 Significant of the study 6
1.5 Research questions 6
1.6 Hypothesis 7
1.7 Scope of the study 8
1.8 Limitations of the study 8
1.9 Operational definition of terms 9-11
REVIEW OF RELATED LITERATURE
2.1 Historical background 12-13
2.2 The need for efficient supply management 14
2.3 The role of public supply 15
2.3.1 Different between public & private sector 16
2.3.2 Characteristics of public supply / purpose 17-20
2.3.3 Improving the system 21
2.4 Supply regulation 22-25
2.5 Tender and tendering 26
2.6 Specification in public / private sector 27-28
2.7 Purchase of stores in the public sector 29
2.7.1 General procedure 29-31
2.7.2 Local purchase of manufactured goods 32
2.7.3 Conditions for approval 32
2.7.4 Oversea purchase 33
2.8 Determination of quality 34-35
2.8.1 The need for quality control 36
2.8.2Quality control unit 37
2.8.3Objective of quality control 37
2.8.4Establishment of quality 38
2.8.5Rejection of stock 38
2.9 Importance of supplies functions 39
2.10 Determination of price 40
2.11 Supplying of ordered goods 41-42
3.1 Introduction 43-44
3.2 Research design 45
3.3 Questionnaire design 46
3.4 Population / sample size 47-49
3.4.1Primary data 50
3.4.2Secondary data 51
3.5 Data collection technique 52
3.5.1The survey 52
3.6 Method of data collection 54-55
DATA PRESENTATION & ANALYSIS OF FINDINGS
4.1 Data presentation 56
4.2 Analysis of finding 56-72
4.3 Test of hypothesis 73-77
4.4 Discussion of major findings 78-79
SUMMARY, CONCLUSION & RECOMMENDATION
5.1 Summary 80
5.2 Conclusion 81
5.3 Recommendation 82-83
1.1 GENERAL OVERVIEW
In every organization public and private sectors, no matter how small they are, management will not like to lose huge sum of money due the ineffective supplies management. Therefore, the need for efficient supplies management functions in the public sector (e.g.) the ministry of finance Imo State is aimed identifying the importance and impact of supplies functions in the overall performance of the public supplies management.
Public supplies management are basically the same as the industrial supplies and materials management. It is a system of materials management associated mainly with governmental agencies (i.e.) federal, state, local government, municipal councils, public school system, public libraries, collages and universities, health institutions and various government commissions. It covers also the materials management functions as practices in inter governmental parastatals or extra ministerial departments including various boards authorities and public Corporations e.g. Power Holdings, NNPC, Nigeria Airways, Railways Corporations, water boards, port authority, River Basin Development Authorities, KASCO etc.
The fund spent by public supplies officers that is those officers who manage the government and supplies functions for government and agencies at all levels deserve the same attentions as Naria spent in industrial purchases. Since the source of these fund is tax payer. If public purchasing funds are spent effectively and efficient benefit will accrue to all those people who pay for and obtain the benefit from the services provided by government.
If the total annual tax supported budget for a given government
unit is say
N2 billion, (for example a state budget in Nigeria)
purchased supplied, materials services, and construction probably accounts for
approximately N50 million which is much is less than purchasing sales ratio in
the average industrial or multi-national firms, since government operations are
very low labour intensive. Still, if an overall 10% (percent) reduction in
purchase cost could be effected through better management of the public
purchasing and supply functions, that would result in or savings to the tax
payer of some N5 million.
This translates into a high level of services, lower tax rate and or some combination of both efficient and effective government purchasing and materials management can play a major role in combating inflationary pressures and reduce cost and wastages extensively.
In every public supply management, the need for efficient supplies management is fully recognized. As to date the cost of materials equipment and supplies for industrial and non-industrial purpose account for a large proportion of the cost of these sectors.
According to Oyeku (2005) efficient supply is therefore achieved when the suppliers supplies the required parts, tooling and equipment at the lowest possible price. Conversely. It must also be borne in mind that supplying at the lowest price may become uneconomical if the required quantity of materials is not delivered and received as at when needed, if the quality specified does not meet or measure up to the quantify delivered. Or if the organization supplies falls to make satisfactory adjustment for this errors, as in the goods delivered or if the price of the items or services rendered.
Supplies is only a part of several activities dealing with the procurement of materials in the public sector.
The subject of supplies told the same basis principal and procedure in all public sectors.
Large supplies are usually made only after the media of publicity for tender. In other to encourage tenders, the supplies must state precisely what the wishes to supply and the due delivery date to avoid conflict.
In this research, project, an attempt is made to examine the need for, project, attempt is made to examine efficient supply function to increasing efficient in supplies.
1.2 STATEMENT OF THE PROBLEM
Mean while, the project is a case study of the need for efficient supplies management in the ministry of finance Imo State.
The principal problem being investigated is to determine the importance, and how effective procurement of material are being carried out within the ministry. If one should ask, do the ministry of finance Imo State carry out their supplies function or activities effectively and efficiently? Simply consider this question to know whether or not the ministry of finance are using the right supplies as regards to materials and equipments, thereby ensuring efficiency in the public sector.
1.3 OBJECTIVE OF THE STUDY
The aim of this research is to reflect on the important and procedures being used for supplies in the public sector with reference to the ministry of finance Owerri Imo State. This research is therefore focused in identifying the solution to the problem of ineffective and inefficiency of procurement of supplies system of good / materials practices in the public sector, it will also be of immense use to all private and public sectors.
1.4 SIGNIFICANT OF THE STUDY
The research work on the need of supplies function in the public sector is designed mainly for supplies personnel, department tender board and government ministries in the public sector. It will also be of immense use to public and private whose knowledge of supplies concept is still not well established.
The researcher through the study will bring solution to ineffective and inefficiency of information services to supplies department, tender board and good service in the public sectors.
1.5 RESEARCH QUESTIONS
i. Does the ministry of finance achieve any advantage because of the use of right suppliers.
ii. It is possible that using the right suppliers will reduce cost and as this result, increase servings in the ministry.
iii. What role does supplies functions play in the public sector.
The null and alternative hypothesis has been set by the researcher to verify the accuracy of data collected during the course of research work.
In carrying out researcher will use both null (Ho) and alternative (H1) hypothesis to find out whether the role played by supplies function in the public sector has any effect on the organization.
A hypothesis may be defined as a declaration statement of a relationship between two or more variables use for better understanding of the materials.
The assumptions one thus, stated below:
i. Ho: That supplies unit cannot be managed effectively by some one without professional qualification.
H1: That supplies units can be managed effectively by someone without professional qualification.
ii. Ho: The supplies department does not often experience unde-influence on matter relating to supply management by other department.
H1: The supplies department often experience unde influence on matter relating to supply management by other departments.
1.7 SCOPE OF THE STUDY
This research work is design to give an insight to the ways of carrying out the material procurement in the public sector. There are a lot of several ways of procurering materials in the public sector and as a result, it will be extremely difficult for the research to study all, considering the time given. The researcher decided to use the ministry of finance, Imo state to enable him carry out in insight study of the sector.
The ministry of finance as respondents to find out the supplies functions and need in the sector and also to compare it with professional standard, so as to detect the difference and make corrective recommendation where necessary.
1.8 LIMITATION OF THE STUDY
In actual sense, there are some certain constraints that seen to limit ones extent of gathering more information based on this project.
There are obviously many public sectors in the state that needed to be visited for more information, but for the limitation in time and resources, these, some how limit the extent of this research.
Another constraint was the uncompromising attitude of the workers of the ministry of finance. They were always very suspicious on the researcher mission not minding the introduction so far made.
There was also lack of relevant data in some areas that could have helped the researcher in this study. Other limitations include all school activities surroundings the researchers.
However, bearing all these contracts the researcher made effort to ensure that he left no stone unturned in the research for the purpose of carrying out this research successfully.
Time of the government worker to be very limited and as such light schedules was the day.
By the time researcher tried to locate on officers, it would be late to meet the other in the office. In essence, it required patience and courage to make several journey before one will be able to secure information and attention of senior personnel whom the researcher felt were in better position to give more actual information.
1.9 OPERATION DEFINITION OF TERMS
i. Supplies: An executives function for the procurement of materials, part, tooling and equipment in the public sector.
ii. Local purchase order: This is a document which is issued to the supplier for delivery of material one made, it is used within a locality of the country.
iii. Vendor sources: This means that a good supplier has to develop sources of raw materials and component that will ensure continuity of production during period of fluctuating business consideration.
iv. Warranties: this is where the suppliers assume the product delivered or supplied will be sound through its life span.
v. Respondent: This refers to all government workers, storekeepers in the public sector that supply relevant information to the researcher.
Vi. Storekeepers: These are staff that is in charge of the private and public sector stores.
Asuju Giwa E. O. (1983): Principles and Practice of Purchasing.
Kaduna: Gbabaks Associate Publisher.
Center, R.J. (1982): Stores Management and Related Operations.
Lee and Dobler W.D. (1977): Purchasing and Materials Management (Text and Cases).
New York; Mc Graw Hill Publishing Company Ltd.
Oko O. Obasi and Unamba, U.M (1989): A Research Handbook Owerri: Newman Service Nig.
Oyeoku, K.O (2001): Principle and Practice of Purchasing Owerri Bon Publishers.
Uzor A.M (2006): Practical Stores Management
Owerri Bon Publishers.
Zenz, G.J. (1994): Purchasing and Management of Materials 7th Ed. USA John Wiley and Sons Inc.
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