འབྲུག་རྒྱལ་འཛིན་གཙུག་ལག་སློབ་སྡེ།།
འཇིགས་མྡེད་རྣམ་རྒྱལ་བཟློ་རིག་མཐློ་རིམ་སློབ་གྲྭ།།
Royal University of Bhutan
Jigme Namgyel Engineering College
Dewathang.
Group assignment for Purchase Management
module.
(Topic: The Impact of Efficient Planning and Control of
Purchasing Activities on Firm’s Performance in A
Manufacturing Company)
Submitted by;
NAME
ENROLLMENT NO,
Mohan Regmi
05210225
Sonam Wangchan
05210336
Sonam Yangdon
05210337
Dechan Wangmo
05210312
Thinlay Gyaltshan
05210343
Sherab Dema
05210334
Tutor: Ms. Wangmo
Course: Diploma in Materials and Procurement
Management
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ACKNOWLEDGEMENT
We owe special thanks to God and sincerely acknowledge our tutor Mrs. Wangmo for providing
us with an excellent opportunity to do research work, and supporting us to upgrade our knowledge.
To our parents, we are indebted for their support and encouragement that has brought us this far,
may the Lord bless the work of their hands. Our appreciation goes to the entire community of The
Jigme Namgyal Engineering College for the favorable learning environment. Lastly, we are
grateful to the researcher for the work that we went through.
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ABSTRACT
This is an exploration project on the requirement for powerful preparation and control in buying
exercises, this paper presents a comparative analysis between various research. Some contextual
findings of this research center around the need for arranging and control in all buying exercises
both in public areas and private areas. In any case that this examination was direct on x, it
contains reasonable investigation that will help both the private and public areas on the most
proficient method to plan and control their exercises.
Also, the reader will find the investigations exceptionally sensible which will depict the
condition of procurement on the whole company or organization. This work is organized in fivepart, section one presents the work’s main aim, objective, and scope, and so part two contains the
survey of related writing of different writers, section three is the technique used to accumulate,
data for this research work, and part four analyses and presents the data for this project.
At last, a section of this work contains the conclusion and recommendations.
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TABLE OF CONTENT
Si.no
1
2
3
4
5
6
7
8
9
10
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Topic
INTRODUCTION
STATEMENT OF THE PROBLEM
AIMS AND OBJECTIVES OF OUR PROJECT.
LITERATURE REVIEW
CONCEPTUAL FRAMEWORK DIFFERENCE
FINDINGS AND RESULT
LIMITATION OF THE STUDY
CONCLUSION
RECOMMENDATIONS
REFERENCE
Pages
5
6
6
7
8-9
10-19
19
19
20
21
INTRODUCTION
BACKGROUND OF THE STUDY
The need for effective planning and control in purchasing activities in any business organization
be it small or, large. In any purchasing activity, effective planning and control is the fundamental
and primary managerial function for any specific operation which made it essential for a
successful strategy.
Implementation and strategy evaluation because all other elements of management depend upon
good planning and this study is mainly carried out to compare research conducted in the various
sector on how the concept of planning and controlling purchasing impact the performance of the
firm.
The requirement for compelling preparation and control in procurement function in any business
organization be it small or, huge. In any purchasing exercise powerful preparation and control is
the crucial and essential for administrative capacity for a particular activity which made it
fundamental for a successful system.
Execution and system assessment since any remaining component of the board relies on great
preparation
PLANNING AND CONTROL CONCEPT
The only thing certain for the future of any organization is a change and planning, it is the
Fundamental bridge between the present and the future.
Planning consists essentially of deciding ahead of time what you want to do and the way you are
to do it. Planning is the application of rationale to make it compelling and efficient to meet the
need and goals of the organization.
On the other hand, control is a management function that frets on taking the vital preventive or
remedial exercises to guarantee that the organization effective and efficient as possible. The
primary goal of planning and control is to ensure that the operations effectively and products and
services needed by the organization to carry out these objectives are accessible, of the right
quality, at the right time, and the right level of quality. Every organization requires planning and
control but the degree of control and planning varies from one organization to another.
Planning and controlling activities the system, strategies, and decisions are which unite these
entities. In other words, planning and control connect the resources of the firm and the
performance of the organization. Typically, they do this, among a bunch of frameworks, and
methodology, and choose strategies that product administrators can find in the ongoing running
of their organization’s operation.
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STATEMENT OF THE PROBLEM
Procurement planning is one of the primary functions of procurement with the potential to
contribute to the success of public institutions’ operations and improved service delivery
(Basheka, 2008). The need for effective planning and control in purchasing activities has not
been fully understood and is also not given importance by many companies. It is a comparative
study of the research conducted in several fields such as Public companies, Government
agencies, manufacturing companies, and remanufacturing companies.
Some of the problems commonly encountered by the industries are as follows.
1. Late delivery of materials to the sub- store from the central stores.
2. non-recruitment of professionals in the procurement positions, thus affecting the firm’s
performance.
3. Many Organizations lack the knowledge of workstation design and equipment selection in
prosecution.
4. Failure to implement or delayed in implementing recommended performance standards has
resulted in high operation costs,
5. Unplanned and uncoordinated business activities,
AIM OF THE STUDY
The study intends to:
The study’s general objectives were to find out the effects of effective procurement planning on
institutional performance, The specific objectives were; to analyze the effect difference of
different research work in the field of effective procurement planning on institutional
performance.
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LITERATURE REVIEW
theoretical review
This study is not complete without going through numerous research papers done in various
sectors by highly qualified scholars in advanced countries. It has Several literature reviews are
taken into consideration given by different authors first one of them is the International Journal
of Science and Research (IJSR),2012, Effects of Procurement Planning on Institutional
Performance: A Case Study of Mombasa Law Court by Celestine Joan Onyango. Secondly,
Effects Of Procurement Practices On Organizational Performance Within The Public Sector: A
Case Of East African Portland Cement Company Limited By Rono Thomas Kipkemoi,2017.
Thirdly, we have referred to Strategic purchasing, supply management, and firm performance
(Injazz J. Chena, Antony Paulraja, Augustine A. Ladob,2004) and lastly, Journal of Operations
Management, 2000(p.467–483) Production planning and control for remanufacturing: industry
practice and research needs (V. Daniel R. Guide Jr.).
DATA COLLECTION
All the data used in our study is used from the research and literature work of the above research
work. We refer to the works of other different authors which are closely related and which are
helpful to come up with this project. We have referred several books on content related to the
content of this project. Thus, all the data collected and used is from a secondary source.
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Conceptual frameworks of two different research.
Conceptual frameworks are basic structures representing the systematized characteristics of the
system. (Bogdan & Bilken 2003).
Figure 1 Conceptual Framework
Source: (Rono Thomas Kipkemoi,2017)
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Figure 2 Conceptual Frameworks
cost elimination
effective need assessment
Instructional performance
quality specification
Independent Variable
Source: (IJSR,2012)
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Dependent Variable
FINDINGS, RESULTS, AND DATA ANALYSIS OF TWO DIFFERENT RESEARCH
Source for all Findings below: (RONO THOMAS KIPKEMOI,2017)
Category
Procurement officers
Operations planning and
logistics
Stores
Weighbridge
Corporate performance
Payables section
TOTAL
Table 1: Target population
Target population
15
13
Percentage
13
12
59
11
3
10
111
53
10
3
9
100
Target Population This is the precise population on which data is needed and, in this case, they
are members of staff from the Supply Chain Department; Procurement section, Operations
Planning and Logistics, Stores, Weighbridge, and the staff from the Finance Department;
Corporate performance (regulates purchases against budget) and Payables section (pays
suppliers) at the East African Portland Cement Company Limited. (Rono Thomas
Kipkemoi,2017)
Target population
160
140
120
100
80
60
40
20
0
Managerial
Supervisors
Frequency
Figure 3
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General employees
Percent
Total
Category
Procurement
officers
Operations planning
and logistics
Stores
Weighbridge
Corporate
performance
Payables section
Total
Target population
15
Sample size
8
Percentage
53
13
7
54
59
11
3
30
6
2
51
55
67
10
111
5
58
50
Table 2 sampling design
Sampling Design and Procedure Stratified random sampling technique will be utilized to choose
the sample. This is an estimate with precision. This is a sampling technique that relies on
probability where the whole population is divided into subsections, then unsystematically
selecting the final topics 16 uniformly from, unlike sections. Kothari (2004) states samples of
approximately 10% can provide useful reliability. The sample selected was more than 50% of the
entire population and therefore ample for the study. This technique has a high statistical accuracy
which saves on time and resources. This technique uses the same sampling proportion for each
division irrespective of the diversities in population size of the divisions. (Rono Thomas
Kipkemoi,2017)
Figure 4
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Category
Responses
Non-Responses
Total
Frequency
46
12
58
Percentage
79
21
100
Table.3: Responses Rate
The researcher circulated 58 questionnaires, and 46 of the 58 sampled respondents completed
and gave back the questionnaires, contributing to a 79% response. A rate of response greater than
60% is considered satisfactory and good for analysis, (Mugenda & Mugenda, 2003). The lack of
response for some of the questionnaires could be due to the lack of spare time in the busy
environments the respondents operate in. Responses were obtained, analyzed, and presented in
tables, graphs, and charts for ease of presentation. . (Rono Thomas Kipkemoi,2017)
Frequency
40%
50%
Responses
10%
Non-Responses
Total
Figure 5
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Gender
Frequency
36
Male
10
Female
Total
46
Table.4: Distribution of Respondents by Gender
Percent
72
28
100
The outcomes of the research showed that 72 percent of the population sampled were male and
28 percent of employees who responded were female. . (Rono Thomas Kipkemoi,2017)
Frequency
39%
Male
Female
50%
Total
11%
Figure 6
Frequency
7
Managerial
17
Supervisors
22
General employees
Total
46
Table 5.: position in the procurement department
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Percent
15
37
48
100
The respondents were requested to indicate the positions they held in their respective
departments; 15 percent indicated they were in
managerial positions, 37 percent indicated
Frequency
they were supervisors and 48 percent indicated
they were general employees. All positions in
procurement were covered in this study and
Managerial
therefore the information provided by the
8%
respondents was adequate for the research. .
Supervisors
18%
(Rono Thomas Kipkemoi,2017)
50%
24%
General
employees
Total
Figure 7
Source for all Findings below: (Celestine Joan Onyango,2012)
Department
Population
35
Chambers
20
HRM & Admin
Finance Department 15
10
Procurement
108
Registries
12
IT
total
200
Table 7: sample population
Sample
11
6
5
3
31
4
60
Percentage
18.3
10.0
8.3
5.0
51.7
6.7
100
The population was chosen to delimit the research and gather sufficient data within the time limit
and cost. The target of the study was Mombasa Law Court employees comprising the judicial
officers and paralegal officers. This was categorized as follows: Chambers, Procurement,
Finance, and Human Resource Departments. The target was chosen because of the role they play
in the procurement process in the Mombasa Law Court(Celestine Joan Onyango,2012). The
respondents in this study were selected from the population of management and employees at
MLC. A total of 60 employees which constituted 30% of the total population were selected using
stratified and simple random sampling techniques. Researchers prefer using methods that provide
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high accuracy, generalizability, and explanatory power, with low cost, rapid speed, maximum
management demands, and administrative convenience (Warwick and Lininger 1975-8).
sample population
total
ICT
Registries
Procurement
Finance Department
HRM & Admin
Chambers
0
50
Sample
100
150
200
Percentage
Figure 8
Effects of procurement
F
planning
35
Need assessment
15
Cost estimation
10
Quality specification
Table 8: effects of procurement planning
%
58
25
17
About the effect of procurement planning, proper need assessment, Procurement Cost
Estimation, and Quality Specification. Need assessment was ranked first with frequency (35) and
the highest percentage of 58%. Procurement cost estimation was ranked second with a frequency
of 15 and a percentage of 25%. Finally, Quality Specification was ranked third with a frequency
of 10 and a percentage of 17%. This result reveals that among the effects of procurement
planning, need assessment was the major factor affecting procurement planning and pivot level
of decision for procurement in any institution (Celestine Joan Onyango,2012).
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effects of procurement planning
80
60
40
20
0
Need assessment
Cost estimation
F
Quality specification
%
Figure 9
Quality specification
Mean
Rank
1
Type of item to be produced 4.34
4.37
2
Financial capacity
4.39
3
User involvement in the
specification
4.40
4
Professionalism applied
Table 9: (quality specification as an effect of procurement planning)
Findings results of quality specification as an effect of procurement planning ranked item to be
procured highest `with a mean of 4.34 financial capacity of the institution ranked second with a
mean grade of 4.37 and finally by procurement method applied mean of 4.39, fourth was the
professionalism applied with a mean of 4.40. Results reveal that quality specification as a factor
affecting procurement planning is best considered in the type of item to be procured. The user
department while putting across their requisition needs to come out with specifications for their
requirement which should be within quality standard measures(Celestine Joan Onyango,2012).
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quality specification
6
4
Professionalism applied
User involvement in the specification
Financial capacity
Type of item to be produced
2
0
Mean
Rank
Type of item to be produced
Financial capacity
User involvement in the specification
Professionalism applied
Figure .10
Management view
Mean
Rank
4.34
1
Financial capacity
4.37
2
Management style
4.9
3
Procurement office
5.1
4
Training
Table 10: (Factors that affect need assessment in procurement planning)
The above results show that the financial capacity of an institution was the major management
view as it affects highly the need assessment of the user in an organization. The office may need
certain items but considering the item might not be bought due to the financial capacity there is
reluctance in the requisition. There is a major need for the institution to be flexible enough not to
restrict the officers on the financial capacity of an institution since funds can be sourced from
somewhere else be it the government or from anon governmental organizations. This
automatically shows that procurement planning depends on the financial capacity of an
organization, that’s the procurement office cannot plan to procure what the institution cannot
afford hence affecting the need assessment of the users. The management style of an institution
was ranked second and it affects need assessment (Celestine Joan Onyango,2012).
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Factors that affect need assessment
6
5
4
3
2
1
0
Financial capacity
Management style
Mean
Procurement office
Training
Rank
Figure 11
Factors
Mean
Rank
4.0
1
Cost estimation
4.1
2
Need assessment
4.2
3
Quality specification
Table 13: (ranking of all effects of procurement planning on organizational performance)
On ranking the above effects of procurement planning on an organization’s performance in
Mombasa Law Court, Cost estimation was ranked first with 4.0, Need assessment was ranked
second with a mean of 4.1 and finally Quality specification was ranked third with a mean of 4.2.
(Celestine Joan Onyango,2012).
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Mean
33%
34%
Cost estimation
Need assessment
33%
Quality specification
Figure .12
LIMITATION OF THE STUDY
The main limitation of the study is all the data and figure used is from the secondary source. The
study is done to draw a comparative result but the very loophole is that all the research is not
based on the same baseline. Thereby the consideration is not up to the excellent level.
Finally, the Sample sizing is not done in the study which has made the study too dependent on
the research work of others.
CONCLUSION
Considering the finding, the acquisition enhances the supplier’s performance in service delivery.
In particular, it has been arranged in the study that planning enhances value for money and it
additionally helps in improving quality. It is in this way workable for the accounts department to
forecast cash flow prerequisites and projections. Besides, arranging empowers advancement and
appropriate use of assets and is likewise efficient. Further, arranging is a critical thinking method
that guarantees cash is accessible to meet the cost of procurement contracts.
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RECOMMENDATION
If supplier performance in service delivery is to be improved, procurement planning is critical.
As a result, businesses must adopt procurement planning since it improves quality and reduces
supplier payment delays. There is also a requirement for the Public Financial Management
(PFM) to have a checklist that ensures that procurement of goods and services is done within
budgetary approvals on funding sources to avoid payment delays. Procurement planning
procedures should be evaluated as well, so that the exact votes may be used to power the
required commodities, works, and services. Once procurement planning methods are
implemented, there will be proper resource utilization, creativity, and problem-solving strategies.
The PPOA's monitoring and evaluation (M&E) system should be strengthened to guarantee that
procuring organizations use public resources efficiently and obey procurement law when
carrying out procurement activities.
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REFERENCE
1. Aref A. Hervani, Marilyn M. Helms, & Joseph Sarkis, (2005). Performance
Measurement for Green Supply Chain Management. Benchmarking: An International
Journal. Emerald Group Publishing Limited.
2. Basheka, B.C. (2009), Procurement and Local Governance in Uganda: a factor analysis
approach, International Journal of Procurement Management, Vol.2, No. 2, pp. 191-209.
3. Carr, A.S., Pearson, J.N. (2002). The impact of purchasing and supplier involvement on
strategic purchasing and its impact on a firm’s performance. International Journal of
Operations and Production Management 22 (9), 1032–1053.
4. The European Institute of Purchasing Management. (2004). Measuring Purchasing
Performance: The role of purchasing measurement systems in strategy implementation.
The 9th EIPM Annual Purchasing Conference. Haute Savoie, France: The European
Institute of Purchasing Management.
5. Lysons, K & Gillingham, M (2003) Purchasing & Supply Chain Management (6th Ed).
Harlow, Essex: FT Prentice-Hall.
6. The Government of Kenya (2005) Public Procurement and Disposal Act (2005) Nairobi
7. Chena J. l., Paulraja A., Augustine A. (2004) Strategic purchasing, supply management,
and firm performance. Journal of Operations Management 22 (2004) pp.505–523
8. Daniel R. V., Jr G.(2000) Production planning and control for remanufacturing: industry
practice and research needs. Journal of Operations Management 18 (2000) pp.467–483
9. Amelia S. Carr John N. Pearson, (2002), "The impact of purchasing and supplier
involvement on strategic purchasing and its impact on firm’s performance", International
Journal of Operations & Production Management, Vol. 22 Iss. 9 pp. 1032 – 1053
10. Royal Government of Bhutan, Ministry of Finance.(2019) Procurement Rules and
Regulations 2019.
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