EFFECTIVE PURCHASING AND SUPPLY MANAGEMENT AND CORPORATE PROFITABILITY IN A MANUFACTURING COMPANY (A CASE STUDY OF GONGONI NIGERIA LIMITED, KANO)

ABSTRACT A company will have stated objectives, but the individual manager must interpret what company officials actually say and do. For example: chief executive financial officers (CFOs), backed by the law of the land, will usually stress their responsibility to the stockholders. But the company’s objectives are usually composites of many decisions, resulting in various cross-functional compromises. So in actual practice the CFO’s goal is to balance the objectives of a fair return on investment to stockholders, stable and satisfying employment for employees, satisfaction of customers and the community, and so forth. In setting procurement’s functional objectives, the Purchasing Manager must be aware of the CFO’s (and accordingly, the company’s) objectives, and ensure consistency in constructing the specific objectives for the purchasing department. With increased focus on meeting customer needs more effectively, many enterprises have begun to evaluate the results of the entire supply chain in satisfying these needs. This has given rise to the concept of competition between supply chains rather than merely between companies. Consequently, the importance of supplier contributions to enterprise results has further increased expectations of the supply management organization. The evolution of purchasing and supply system from a clerical task to a strategic value chain makes it a means of creating competitive advantages for organizations. Generally, this development happens slowly with no previous design and plan in organizations. Therefore, to mitigate risks of this change and to increase its effectiveness, this development process should be carefully structured and planned. In this research work, in order to achieve a purchasing and supply system transformation model, purchasing development models are used as a basic framework. By benefiting of organizational change concepts and theories, the reference model has been designed as a tool to assess the current purchasing and supply system development situation and the potential strategic growth path. Finally, relationships between purchasing content change elements development have been identified as a departure point to develop the purchasing transformation strategy. In the empirical research path, this exploratory research has an inductive approach and the strategy by which the research is conducted is grounded theory. Case studies are the chief tools for data collection and analysis.