CHAPTER ONE

1.0 INTRODUCTION

Material Procurement can be defined as the purchase of goods or services at a total cost of the optimum possible in the correct amount and quality of procurement. These goods and services are also purchased at the right time and location to express profit or the use of Government, business, business, or individuals by signing a contract.

The process of acquisition of goods or services that are required as a raw material (direct procurement) or for operating purposes (indirect procurement) a company or a person might call acquisition. The procurement process involves not only the purchase of commodities, but also the quality and quantity of controls. Typically, providers are listed and pre-determined by the contracting company. This makes the smoother process, the promotion of a good relationship between the buyer and the supplier.

The synonyms for procurement, which are the gain, purchase, and acquire, can shed light on the meaning of procurement. The procurement process may vary from company to company, and a Government entity can have a slightly different procurement process compared to a private company.

Acquisitions can also be defined simply as the procedure in which the goods or raw materials are purchased when prices are low. Procurement is advantageous if the goods are purchased in large quantities. E-procurement is another method

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of electronic media is used for the acquisition or purchase of goods. Everything is processed electronically, the search for the right bidder delivery and payment. The procurement procedure may vary depending on the product and the uses of the product. Health team must be efficient and reliable, and the procurement process is carried out carefully in order prevent the defective equipment purchase. Another important factor that usually includes definitions of the procurement is the amount purchased the product. This is important because the quantity of purchased goods is inversely proportional to their cost.

Thus, acquisition is a process that is carried out by the company almost every individual and for their own personal benefit or benefits, involving the purchase of commodities by choosing the appropriate provider.

1.1       Statement of the Problem

Most company’s are suffering some set backs due to their procurement system. Most often low quality goods are purchased and they end up loosing money. Also at times, they lack a steady supply, resulting to lack of materials for production, hence the need for computerization of bill of material processing system.

1.2       Aims and Objectives of the Study

The main objective is to computerized bill of material processing system of business transactions. This will help the manager know when to make purchases of items, ascertain the exact number of each items or stock available, to

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ascertain the materials that are either mostly or sparsely used as well as knowing the exact number of each material or items that are lacking thereby helping to improve workflow in the organization. Moreover to reduce time wasted in data processing and information retrieval. And finally to improve management activities, which will lead to improved productivity, accountability and business management of the organization.

1.3       Purpose of the Study

This purpose of this study is to design a computerized bill of material processing system for a company. This will help in monitoring their material procurement.

1.4       Significance of the Study

The project is aimed at designing, a new better alternative system to help the organization in material procurement thereby making the management system to be more effective. Also the software designed will help management to: -

(a)              Maintain a database of materials procured.

(b)             Safeguard data and information in the system.

(c)              Reduced workload in the present system.

(d)             Keep accurate record on material procurement

(e)              Reduce time wasted in data processing.

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1.5       Scope of Study

This project work is designed to cover all aspect of purchases of materials in a company. The system incorporates materials procurement recording and stock taking.

1.6       Constraints and Limitations

During the process of this research work some drawbacks were encountered while trying to get adequate needed data and information.

They include the reluctance of the management of the firm under study to release vital information, which they feared would jeopardize the security of the organization. And secondly, time and financial constraints which had great influence to this work.

1.7       Assumptions