CHAPTER ONE

INTRODUCTION

1.0 Introduction

In every business organization, the prime concern is to maximize profit after the deduction of all expenses and to make it a going concern. To maximize profit, there must be adequate and proper planning in all departments of the organization including purchasing and supply departments and co-ordination by management.

The supply chain encompasses all of those activities associated with

moving goods from the raw-materials stage through to the end user. Advocates for this business process realized that significant productivity increases could only come from managing relationships, information, and material flow across enterprise borders. The best companies around the world are discovering a powerful new source of competitive advantage. It’s called supply-chain management and it encompasses all of those integrated activities that bring product to market and create satisfied customers.

The Supply Chain Management Program integrates topics from manufacturing operations, purchasing, transportation, and physical distribution into a unified program. Successful supply chain management, then, coordinates and integrates all of these activities into a seamless process. It embraces and links all of the partners in the chain. In addition to the departments within the organization, these partners include vendors, carriers, third party companies, and information systems providers.

The supply function continues to evolve as technology and the worldwide competitive environment require innovative approaches. The traditionally held view that multiple sourcing increases supply security has been challenged by a trend toward single sourcing. Results from closer supplier relations and cooperation with suppliers question the wisdom of the traditional arm’s-length dealings between purchaser and supplier. Negotiation is receiving increasing emphasis as opposed to competitive bidding, and longer-term contracts are replacing short-term buying techniques. Organizations are continually evaluating the risks and opportunities of global sourcing. All of these trends are a logical outcome of increased managerial concern with value and increasing procurement aggressiveness in developing suppliers to meet specific supply objectives of quality, quantity, delivery, price, service, and continuous improvement (Evans, 2011).

1.1 Theoretical Background

Supply chains encompass the companies and the business activities needed to design, make, deliver, and use a product or service. Businesses depend on their supply chains to provide them with what they need to survive and thrive. Every business fits into one or more supply chains and has a role to play in each of them.

The pace of change and the uncertainty about how markets will evolve has made it increasingly important for companies to be aware of the supply chains they participate in and to understand the roles that they play. Those companies that learn how to build and participate in strong supply chains will have a substantial competitive advantage in their markets.

The term “supply chain management” arose in the late 1980s and came into widespread use in the 1990s. Prior to that time, businesses used terms such as “logistics” and “operations management” instead. Some definitions of a supply chain are offered below:

A supply chain is the alignment of firms that bring products or services to market. A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers.

Effective supply chain management requires simultaneous improvements in both customer service levels and the internal operating efficiencies of the companies in the supply chain. Customer service at its most basic level means consistently high order fill rates, high on-time delivery rates, and a very low rate of products returned by customers for whatever reason. Internal efficiency for organizations in a supply chain means that these organizations get an attractive rate of return on their investments in inventory and other assets and that they find ways to lower their operating and sales expenses.

1.2 Statement of Problem

Most suppliers lack the technical expertise to dispense their duties. This may lead to situations where the supplier selected cannot meet the capacity and logistics requirement of the company. Another problem is inadequate supplier selection and this is one of the most important decisions in the purchasing process. There is also the problem of lack of good contractual arrangement and a clear description of the product or supplier requirements may not be available. Also, there are delivery problems. Suppliers deliver too late, deliveries are not complete, products are damaged or may not meet quality requirements, packaging of the product is not sound and information labels in most cases cannot be read. The reason for this can be traced back to unclear specifications or careless supplier specification. The purchasing and supply department of many business organizations lack clear rules and guidelines with regard to procurement and supply governance. It is in view of these problems that this research study is carried out.

1.3 Aim and Objectives of the Study

The aim of the study is to implement an automated system for supply management. The following are the specific objectives of the study:

To develop an automated system for supply management to manage supply functions To develop a system that will aid easy capture and retrieval of supply details. To develop a system that will help in maximizing profit by determining priority of supply To develop a system that will present reports of supplies when needed by management.

1.4 Significance of the study

            The significance of the study is that it will provide a better means of managing the supply function of Pepsi bottling company. It will enable the organization to maintain adequate record of supply records and to easily update, retrieve and get reports when needed. It will facilitate the maximization of profit by enabling the organization to determine the priority of supply. The study will also serve as a useful reference material to other researchers seeking for information on the subject.

1.5 Scope of the Study

This study covers automated system for supply management using Pepsi Bottling Company, Ikot Ekpene as a case study.

1.6 Organization of the Research

This research work is organized into five chapters. Chapter one is concerned with the introduction of the research study and it presents the preliminaries, theoretical background, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.

Chapter two focuses on the literature review, the contributions of other scholars on the subject matter is discussed.

Chapter three is concerned with the system analysis and design. It presents the research methodology used in the development of the system, it analyzes the present system to identify the problems and provides information on the advantages and disadvantages of the proposed system. The system design is also presented in this chapter.

Chapter four presents the system implementation and documentation, the choice of programming language, analysis of modules, choice of programming language and system requirements for implementation.

Chapter five focuses on the summary, constraints of the study, conclusion and recommendations are provided in this chapter based on the study carried out.

1.7 Definition of Terms

Customer: buyer: a person or company that buys goods or services

Supply: To provide,  give, sell, or make available something that is wanted or needed by somebody or something.

Management: Administration of business, the organizing and controlling of the affairs of a business or a sector of a business

Distribution: The handing out or delivery of things to a number of people.