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iLearningCampus.com
Understanding by doing and learning by talking
iLearningCampus.com
Understanding by doing and learning by talking
Material Management Overview
iLearningCampus.com
Understanding by doing and learning by talking
■Enjoy the complete series
■Understand the Concepts
■Take notes ►Have a Good Time !!
iLearningCampus.com
Understanding by doing and learning by talking
►Material Management Overview
Ch
ap
ter 1
iLearningCampus.com
Understanding by doing and learning by talking
Ch
ap
ter 1
►Material Management Overview
iLearningCampus.com
Understanding by doing and learning by talking
Material Management ?
ǂ Material Management is an end to end (E2E) scientific technique of planning, organizing and control of flow of materials from its purchase to final destination.
iLearningCampus.com
Understanding by doing and learning by talking
Water Tank Analogy
Supply RateInventory Level
Demand Rate
Material Management
iLearningCampus.com
Understanding by doing and learning by talking
Aim of Material Management
■Right source
■Right Price
■Right quantity
■Right quality
■Right time
■Right place
Right things at the Right time with Right control and procedure
Maximizes economics in purchasing, production process and customer satisfaction
iLearningCampus.com
Understanding by doing and learning by talking
Purpose of Material Management■Maximizing Customer service.
■Maximizing efficiency of purchasing and production.
■Maximizing Inventory investment.
■Maximizing profits.
iLearningCampus.com
Understanding by doing and learning by talking
Functions of Material Management■Material Planning
■Material Sourcing
■Transportation and material handling
■ Inspection and quality control
■ Inspection and quality control
■Codification
■Storekeeping and warehousing
■Standardization and evaluation of all products
■Cost reduction through value analysis
■Disposal of surplus/obsolete material
■Distribution
iLearningCampus.com
Understanding by doing and learning by talking
Objectives of Material Management■ Primary Objective ■ Secondary Objective
■ Efficient use of Working Capital
■ Economy of purchase
■ Lowering storage cost
■ Lowering inventory investment
■ Increasing the inventory turnover
■ Responding the market changes
■ Providing best services to the customers
■ Better supplier relationship
■ Good information system
■ Continuity of supply
■ Consistency in quality
■ Right price
■ Planning and forecasting
■ Make or buy decisions
■ New materials and products
■ Standardization
■ Product improvement
■ Inter-departmental harmony
iLearningCampus.com
Understanding by doing and learning by talking
Ch
ap
ter 1
►Material Management Overview
iLearningCampus.com
Understanding by doing and learning by talking
Overview - Procurement►Procurement is a process of purchasing the material
and/or services. ► It is executed through an agreement between a
purchasing organization and the sourcing vendor. ►The terms of supply e.g. date of delivery, payment
terms are agreed as per agreement.
iLearningCampus.com
Understanding by doing and learning by talking
Procurement business process Cycle
Purch. req.
Procurement
Determination of RequirementsDetermination of RequirementsPayment Processing 11118888
Vendor Selection3333
Source Determination2222
PO Processing4444
Purch. ord.
10
20
30
Goods Receipt6666
Invoice Verification7777
Invoice
??
PO monitoring5555
Purchase order
10
20
iLearningCampus.com
Understanding by doing and learning by talking
Request for quotation
Purchase requisition
Purchase Order
Goods received
Invoice verification
Payment
7
Procure to Pay (P2P) business process cycle
Quotation
Outline agreement
6
8
iLearningCampus.com
Understanding by doing and learning by talking
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