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QUALITY MANAGEMENT AND PROCUREMENT EFFECTIVENESS

ACASE STUDY OF UGACOF LTD

CHAPTER ONE

INTRODUTION

1.0 Introduction

This chapter will cover the background of the study, purpose of the study, research questions, and scope of the study, significance of the study and definition of terms.

1.1 Background to the study

Quality management has become the prerequisite for survival of today’s global organizations, companies that have adopted quality management have designed management practices and experienced an overall improvement in corporate performance including better employee relations, higher productivity, greater customer satisfaction, increased market share and improved profitability, (Lysons, 2006).

In today’s highly competitive markets to survive, companies have to make major changes in their quality programs and as many hire consultants and institute quality training programs for their employees a new concept of quality is emerging and therefore quality has began to have a strategic meaning in different organizations across the globe, (Ford et al, 2010).

The reason quality has gained such prominence is that organizations have gained an understanding of the high cost of poor quality as it affects all aspects of the organization and has dramatic cost implications and the most obvious consequence occurs when poor quality creates dissatisfied customers and eventually leads to loss of business however, quality has many other costs, which can be divided into two different categories however organizations have adopted quality management by following the different techniques of quality management including, using the six sigma techniques as used mainly by multinational companies in the united states, (Handfield et al, 2006).

According to (Farrington et al, 2006) an organization cannot achieve quality independently this therefore calls for an organization to consider where it purchases its raw materials since the raw material greatly affects the output of the organization, he further asserts that an organization has to work collectively with its upstream suppliers in order to ensure that its supplies are got from the right source.

The reason quality has gained such prominence is that organizations have gained an understanding of the high cost of poor quality it affects all aspects of the organization and has dramatic cost implications, the most obvious consequence occurs when poor quality creates dissatisfied customers and eventually leads to loss of business however the attainment of quality in production is a universal issue and therefore all the companies have to check on their supply chain order to ensure quality output, ( Patterson, 2009).

Quality management in Uganda is of recent becoming such an important topic due to the increase competition from foreign manufacturers and also the consumer protection rules which have been put in place by government parastatals like UNBS to ensure that consumers purchase goods and services which meet their needs however the issue of quality management cannot work independently as the source of purchase of a goods is instrumental in determining the quality of the outputof a good , it therefore shows that quality management has a direct impact on procurement effectiveness.

UGACOF has been a coffee processor and exporter since 1994 however despite of the massive investments by the organization in its quest to achieve efficiency it has been meant by various challenges including procurement inefficiency characterized by expensive acquisition of the goods from its supplies, dissatisfaction of its customers and above all expensive procurements it’s on this ground that this study intends to investigate the influence of quality management on procurement effectiveness with specific reference to UGACOF located at plot No 236 Kireku zone Bweyogere, Kampala Uganda.

1.2 Statement of the problem.

Quality management in an organization can be realized through ensuring that organizations obtain their goods from the right suppliers at the right time and price he further asserts that the quality of a good or service is essential for an organization to attract customers so that they become repeat buyers however it cannot be achieved through purchasing at right customer himselfhaving a skilled workforce also play, Lysons, (2006).

Inefficiency in purchasing in an organization has been linked to different organizational challenges including leading to high costs in purchasing, poor quality purchase of goods and services, dissatisfaction of customers and loss of market of organizations goods and services to the competitors, (Rendon, 2006). This study therefore intends to investigate into the influence of quality management on procurement effectiveness.

1.3 Purpose of the study

The purpose of study is to establish the impact of quality management on procurement effectiveness in organizations.

1.4 Objectives of the study

The objectives of the study are;

To examine different methods and techniques of managing quality in an organization.
To evaluate the steps, benefits, and challenges of managing quality in an organization.

To analyze the indicators and measurement of procurement effectiveness in organizations.

1.5 Research questions

What are the different methods and techniques of managing quality in an organization?
What are the steps, benefits, and challenges of managing quality in an organization?

What are the indicators and measurement of procurement effectiveness in organizations?

1.6 Scope of the study

The study scope will cover the following aspects;

1.6.1 Content scope

This study will generally cover quality management and procurement effectiveness, but the study will specifically cover, different methods and techniques of managing quality, the steps, benefits, and challenges of managing quality and the indicators and measurement of procurement effectiveness in organizations

1.6.2 Geographical scope

The study will be conducted at UGACOF located at plot No 236 Kireku zone Bweyogere, Kampala Uganda

1.6.3 Time scope

The period of data to be considered in the organization will be from 2012-2015 and period of body of knowledge in reviewing literature will be from 2000-2015, while the study will be carried out from February to July 31^st 2015.

1.7.0 Significance of the study

The study will enable future researchers to assess the different ways of achieving quality purchase.

The study will also enable academicians to explore the various ways of achieving procurement effectiveness.

The study will help researchers to analyze the relationship between quality management and procurement effectiveness.

1.8.0 Definitions of key terms

1.8.1Procurements

According to Kenneth Lysons and Brian Farrington (2006), procurement refers to the acquisition of goods, services or works through purchase, rent, lease, franchise or any other legal means considering the 3 Rs like from the Right: place, time, price, quantity, and quality by use of shareholder’s money.

Procurement simply means acquisition by purchase, rental, lease, hire purchase, license, tenure, franchise, or any other, contractual means, of any type of works, service, or supplies or any combination PPDA ACT 2003.

Procurement effectiveness.

World commission on environment and development (1989) define procurement effectiveness as procurement of goods, services, and works, to meet the needs of present generation without compromising ability of the future generation to meet their needs.

Procurement effectiveness is procurement of goods, service, works which are needed by end user and therefore meeting their expectations or purpose for which the item or service was meant for ( Lysons 2003).