MATERIALS MANAGEMENT

DefinitionIt is concerned with planning, organizing and controlling the flow of materials from their initial purchase through internal operations to the service point through distribution.

AIM OF MATERIAL MANAGEMENT To get 1. The Right quality 2. Right quantity of supplies 3. At the Right time 4. At the Right place 5. For the Right cost

PURPOSE OF MATERIAL MANAGEMENTTo gain economy in purchasingTo satisfy the demand during period of replenishmentTo carry reserve stock to avoid stock outTo stabilize fluctuations in consumptionTo provide reasonable level of client services

PrimaryRight priceHigh turnoverLow procurement & storage costContinuity of supplyConsistency in qualityGood supplier relationsDevelopment of personnelObjective of material managementSecondaryForecastingInter-departmental harmonyProduct improvementStandardizationMake or buy decisionNew materials & productsFavorable reciprocal relationships

MATERIALS PLANNING

Materials planning is the the scientific way of determining the requirements of raw materials ,components,spares amd other items

significanceOver ordering/under orderingPoor planning for materials leads to emergency, and increase tranporataion cost

Benifits of Materials PlanningAvoid last miniute to procure materials Improve better forecastingImprove purchase planning

Factors influencing materials planningNational economyPrice trendsCredit policiesDirect and indirect taxesInternational market conditionsDemand for itemTotal procurement lead timeTransporatation loses

Rejection rateStorage capacityPlant utilizationSeasonal factorsDelegation of powerLocation of pant and location of suppliers

Approach to materials planningBased on short term sales forecastBill of material Explosion

Past consumption AnalysisUsing previous datas

Materials Budgeting

Once the material requirements have been established the materials budget is prepared taking into account ..

Estimation of material prices during coming year and specfic timing of purchases(quarter/month)

benefitsSchedule of cash requirementsInventory investment risk can be reducedCareful selection of qualified suppliersSupplier relationship can be improved

Material control

The function of maintaining contantly available supply of raw materials, purchased parts

Material Control CycleDetermining the material needsPreparing requisitions for purchased itemReceving purchased material and finished goods Inspecting purchased material and finished goodsEntering receipts in stores record

Stores Management

Store as building where goods are keptFunction of receving and storing the materialStore is not meant for stocking purchased material alone,partly finished goods,finished goodsand consumables are also in kept

FunctionsReceive raw materials and account for themProvide proper storageTo meet the demands of consuming departments by proper issuesTo minimise obsolence,surplus

Stores layoutNearness to point of useGood accessability for material handling equipmentFlexibility for future expansionEfficient utilization of floor and heightClear identificationInstall good lighting to prevent theftPermit first in first out

Maintain house keepingPhyical appearance

Storage systemFixed LocationParticular type goods have a position in the store assigned to them exclusive onlyOn the basis ofsuppliersimilarity of itemsize and frequnecy of usejoint issue of items

Random locationCan be stored any storage position

Zone location_particular product group are kept in given areacomb type layouttree type layout

Stock verificationLow point inventory- when the stock is lowest- minimize the timeContinuous inventory-52 equal groups ans assign one of them to be physically counted each week- planned and worked without shutdown- detecting and eliminating the causes weekly

Fixed inventoryShutting down Seasonal business

Advantage of classification and codificationSystematic grouping of similar items for correct identificationAvoid duplicate stock such as different name,brand name and part numberArrange bin cards and records in store in the same uniform mannerUsuage of long descriptions is simplified

Principles of classificationBasis of classification should remain unchangedClassification must cover entire items and allow reasonable scope for extensionEasily adopted fot non specialist

methodsRaw materialComponentSpare partsToolsPacking materialsFinished goodsHardwareMotors