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NEED FOR CREATION DEVELOPMENT AND MAINTENANCE OF GOOD BUYER SUPPLIER RELATIONSHIP

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NEED FOR CREATION DEVELOPMENT AND MAINTENANCE OF GOOD BUYER SUPPLIER RELATIONSHIP

 

ABSTRACT

The need for creation, development and maintenance of good buyer-seller relationship is very paramount to every organization for it’s existence. It is a process and procedure used by managers (management role) to enhance production and boost profitability in the organization.  This project attempts to examine the nature and environs of buyer-seller relationship. How the relationship can be created (initiation), developed and it’s maintenance are stressed in a more meaningful manner.  This work as arranged in chapters started with the introduction of the work through identifying the problems to be investigated, the objective, scope significance, it’s hypothesis and limitation of the study. Chapter two is a review of professional literature which relates to the subject matter and are stated accordingly. The methodology are presented in chapter three and also the findings presented in chapter four. Ultimately, the conclusion, summary and recommendations of the entire work are done in chapter five, which are all geared towards creating awareness for the need for creation, development, and maintenance of good buyer-supplier relationship. This relationship in the work place faces a demanding and exiting future which will require the highest level of professionals competence. This research work is intended as a contribution to the effectiveness. I hope the work serves the purpose well. 

 

CHAPTER ONE

INTRODUCTION

Organization will be interested in transacting business in an environment filled with fragility and unfriendliness. Also, no firm will appreciate, if they took time to ignite business light, only to lose them to other firms that will develop and maintain the light.  The more an organization creates, develop and maintain good customer relationship, the more benefit and easy going their business operations become. Hence, an organization that creates and develop more and also maintain stands a better chance of survival, growth, and profitability. These gave birth to this very interesting topic “the significance of need for creation, development, and maintenance of good buyer supplier relationship which could either beneficial or detrimental to an organization. Hence, the need for creation, development and maintenance of good buyer-supplier relationship is as old as creation. There has been traces of this relationship as a stimulating and basic factor for better performance in all human activities. 

In the Nigeria context, one notices that friendliness among buyers and suppliers goes a long way to create good business transaction. This features promently in companies with low productivity in which Unilever brother Plc is not an exception.  With regards to the requirement by any company to keep production planning, there is the need for the buyer to maintain a relationship with his supplier, by using motivated aids to achieve his aim.  This type of approach will help to create an awareness on the part of the supplier and importance that is required of the buyer’s company.  According to Baily and Farmer (1983) buyer and supplies of commodities finds themselves exposed to serious risk of loss (as well as of wind fall profit) because of impracticable changes in buying procedures as earlier stated, it becomes evident that an existing relationship can sustain the buyer, when the supplier gets information about production stoppages an increase or change in price and which makes it unable for the buyer to purchase the materials.

1.1 BACKGROUND OF THE STUDY 

This research is based on Unilever Brother’s Nigeria Plc Aba, which outfit is in Nigeria. It was formally know as the best Africa soap company limited in 1923 until it’s name was changed to liver Brothers Nigeria Plc and finally to Unilever Brothers Nigeria Plc, in 1995.  It first started with importing cold water detergent into the country which was white in colour, with some blue greenish sparkles in 1947. The company introduced the omo blue detergent which competed with the cold water surf with increase in demand and changes to taste. The company started diversifying it’s manufacturing plants which lead to the establishment of the branch in Aba in 1949.  Initially, their manufacturing scope is based on local palm oil. Unilever Brother strengthened to foot hold and progressed to drink business by merging with Lipton Nigeria limited in July in 1985 and also merged with the chesebrough product industries limited in December 1988 to become the giant in personal production process. 

In accordance with the Nigeria enterprise promotion decree of 1972 and 1977, 60 percent of the companys exact is held by Nigeria citizens and institution while the remaining 40 percent is held by Unilever oversea holding limited, Lipton tea company limited. Today Unilever Brother’s Nigeria Aba is a leading company in the industrial sector, engaged in the manufacture and marketing of a wide range of household product for fabries, washing, household clearing, personal washing, skin cares, dental cares industrial clearing and foods ranging from seasonings and table margarines. Through efficient and shapely focused management, the manufacturing sites have been nationalized for five weations some years ago to the current three, leading to significant savings and cost effectiveness, first “Apapa” the premier and site, producers of soaps as sunlight, key, oxbar, lux breez, astral and personal product close up, pepsodent, Vaseline or pomos’.

The second plant is devoted in the production of non-soaping detergents power, and bars. Here the company at industry Road Aba, behind Nigeria Breweries Plc Aba makes such popular brands as Omo, rim and use powder. The third and the newest of all the plants was commissioned in 1983 as the ultra-modern food factor in Agbara, where the company produces Roy co, Blue-Band, planter , tree top and breaden.  Unilever Nigeria Plc’s range of quality product is distributed and sold at uniform price all over the country through an established and tested distribution network using appointed distribution, supervised and well trained sales force. The company has direct staff strength of 2.224 employees in it’s three factors and various distributions points throughout the country out this number, only six are expatriate. This is the extent which the company has gone at training and development local management resources, the objective is to bring in expatriates to give the business an international flavor and in exchange for it’s own managers going oversea to work and obtain foreign experience rather than as a matter of necessity. The company also provides employment for over 6000 suppliers and distributors who in turn employ thousand of people.  Unilever Nigeria Plc has been dedicated to the production of top quality brand for Nigeria for over 70 years, with over 30 strength in Aba plant with these, their super brand remain a must in every home.

1.2 STATEMENT OF THE PROBLEM

According to Olawole (1985) “relationship between buyer and supplier in most industries in this country has not been cordial”. This statement aroused the researcher’s zeal to investigate the following problems and with the intention of solving them:

1. The reasons why some industries in Nigeria like Unilever Nigeria Plc Aba, Nigeria Bottling Company, the standard shows company Owerri, etc, have not met with increasing demands of customers for their products and services.

2. To investigate and take a critical look at the force hindering the establishment of a good buyer-supplier relationship. 

3. Whether the organizational structure of the company has a case to the problem.

4. Making investigation on the level of relationship or the reasons for the non-cordiality.

1.3 OBJECTIVE OF THE STUDY

The main point or reason behind this study is to investigate the level and quality relationship between the Unilever Plc Aba and her supplies, and to emphasize the need for creation, development and maintenance of good and mutually advantageous and continued buyer supplier relationship. In as mush as this study has been carried out on the above topic, it is also done to render some useful suggestions and recommendations that might help to up-grade buyer-supplier relationships between the company and its supplier.

1.4 SIGNIFICANCE OF THE STUDY 

In clearing every doubt, it is clear that this study will go a long way in:

a. Concentrating and finding solution to problems involved in buying operations.

b. Removing areas of difficulties in obtaining materials from suppliers.

c. Making for continuity of supplies to production.

d. The sourcing evaluation, selection, developing and maintenance of supplier to the advantage of the buyer company. 

e. Facilitating and keeping the organization in operation in times of:

i. Price fluctuation 

ii. Scarcity and emergency needs

iii. Change in the trend of events in supplies (Technological innovations).

1.5 RESEARCH QUESTIONS 

In other to complete a through investigation on the subject matter, the researcher has come out with the following questions. 

1. What are the importances of this good buyer supplier relationship to the company?

2. What are the advantages that are attributed to good buyer-supplier relationship’s

3. What are the process and procedures in which this relationship can be established?

4. How does the company cope up, when such is not existing (relationship)?

5. What are the efforts adopted by a company to maintain good relationship?

1.6 HYPOTHESIS 

In order to facilitate investigation in a study of this nature, it is important and necessary to formulate a set of hypothesis which are designed to provide the useful guide throughout the work, and the drawing of reasonable conclusion by presenting a meaning and workable solutions to the problem of Unilever Nigeria Plc, Aba. 

H0: Increased demand of customers company’s products and services as not dependent on good buyer supplier relationship. 

HI: Increased demand of customers for a company’s products and services is.

1.7 SCOPE OF THE STUDY

This study is intended to cover Unilever Nigeria Plc, Aba, particularly the purchasing department, it’s relationships with sales, production, accounts on how the purchasing departments operate with the supplies to render the required services to the functional department and investigate the causes of non-cordiality with any supplier.  This study will also cover the economic factors affective buyer-seller operations in Unilever Nigeria Plc and investigate on how good-buyer-supplies relationship can solve the problem of how performance on the part of the buyer against the seller.

1.8 LIMITATION OF THE STUDY

It is envisaged that there will be some constraints in the process of carrying out this study. Some of the limitations are as follows: There is the problem of time constraints. The time lay required to carry out the research work is short-the researcher will be finding it difficulty to share his academics time together with this study.  There is also the problem of finance. The cost consideration of the study when critically examined is high, in the sense that a student who engages in transportation to and from the place of case study is placing his/her living standard under detriment.  There is the issue of non-availability of information. As a result of the situation in the country now, some of the workers may not wish to give out the necessary information needed by the researcher.

1.9 DEFINITION OF TERMS 

In the course of the work at hand and for effective communication, some term has been clarify expatiated, and they are as fellows:

1. Creation: This denoted the establishment and development of ideas, utilities, etc for a given purpose.

2. Maintenance: By process of managing, through directing coordinating, etc of the existing forces which aids productivity. 

3. Buyer: This is that purchase who is willing to purchase or order a particular quantity of a given product at any given time. 

4. Supplier: This refers to that seller who is walling and able to sell or deliver a particular quantity ordered of any product at any given time. 

5. Relationship: This is the interaction or communication which exist between two or more people under a given circumstance.

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