Effectiveness Of Purchase Order Processing System In Automobile Component Manufacturing: A Study At Sundram Fasteners Limited

Abstract

Efficient procurement management is a critical determinant of operational performance in manufacturing organizations. This study examines the effectiveness of the Purchase Order Processing System (POPS) implemented at Sundram Fasteners Limited, a flagship enterprise of the TVS Group and a leading manufacturer of automotive components headquartered in Chennai, India. Primary data were collected from 51 respondents across departments including purchasing, finance, inventory, warehouse, and administration using a structured questionnaire with Likert-scale response options. Statistical analysis was performed using SPSS software, employing percentage analysis, correlation analysis, ANOVA, and regression analysis. Findings reveal that 72% of respondents agree or strongly agree that purchase orders reduce procurement errors, while 76% affirm their positive impact on supplier communication. Regression analysis confirms that proper budgeting and supplier communication are the strongest predictors of purchase order system effectiveness, collectively explaining 71.6% of the variance in procurement performance (R² = 0.716, p < 0.001). ANOVA results indicate no significant difference in perceptions across age groups (p = 0.132), suggesting uniform acceptance of the system across employee demographics. The study concludes that a well-structured purchase order system materially improves procurement accuracy, transparency, inventory control, and interdepartmental coordination. Practical recommendations include ERP integration, digital approval workflows, supplier communication platforms, and periodic employee training programmes.