Material management


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Quality Material managementPresentations By Rajendran Ananda Krishnan,

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Material management

  1. 1. Materials Management Rajendran Ananda Krishnan ettythings
  2. 2. Why Materials Management Materials is one of the five M’s of an industrial organization Increasing Material costs Materials offer considerable scope for improving profit. Materials form an important form of current assets in any organization. Material add value to the product Suppliers and materials management account for more than 50 percent of total value. Quality of the finished product depends on quality of materials used. social responsibility of business. Exploring new sources of supply is a challenge for material management executives. ettythings
  3. 3. Material managementMaterial management involves organizing, and coordinating allmanagement functions that are responsible for every aspect ofmaterials, storage, and transformationBailey and Farmer define Material Management as the managementof the flow of materials in to an organization to the point where thosematerials are converted in to the firm ‘s end products ettythings
  4. 4. Objectives of Material Management Buying, storage, and movement of material are the three basic objectives of materials management. Optimum investment in inventory is the prime objective of materials management.Primary Objectives1. Lower prices2. High Inventory Turnover3. Low cost acquisition and possession4. Continuity of supply5. Consistency of quality6. Favorable supplier relations ettythings
  5. 5. Secondary objectives1. Reciprocal Relations2. New materials and products3. Economic make or buy4. Standardization5. Product Improvement6. Inter departmental harmony7. Forecasts8. Acquisitions ettythings
  6. 6. PurchasingPurchasing is the act of buying an item at a pricePurchasing is responsible for obtaining the materials , parts ,supplies and services needed to produce a product or provide aservice.ObjectivesPurchasing objective: Buying raw materials of the rightquantities, in the right-quality at the right time, at the right price,and from the right source.1. To pay reasonably low prices for best values obtainable.2. To keep inventories as low as possible3. Collaborative relationship with supplies4. To secure good vendor performance – delivery and quality5. To locate new materials or products as required6. To develop good procedure together with adequate control and purchasing policies7. To implement analysis , cost analysis programs like value ettythings and make or buy decision
  7. 7. Purchasing Functions Responsibilities often fully delegated to the purchasing functiona. Obtaining pricesb. Selecting vendorsc. Awarding purchase ordersd. Following up on delivery promisese. Selecting and training of purchasing personnelf. Vendor relations Functions other than purchasing functionsa. Obtaining Technical information and adviceb. Scheduling orders and deliversc. Inspectingd. Accountinge. Expeditingf. Determination of whether to make or buyOther functionsa. Receiving and warehousing Payment of invoices ettythings
  8. 8. Purchasing CyclePurchasing cycle comprising of eight steps.1. Recognition of Need2. Description of Requirement3. Selection of Source4. Determination of Price and Availability5. Placing the Order6. Order Acknowledgement7. Follow Up and Expediting8. Checking The Invoice and Approval ettythings
  9. 9. Factors in source/vendor selectionReliabilityTechnical AbilitiesAfter sales service availabilityPast experiencePriceQualityDiscounts receivedPromptness of deliveryCo-operationCredit termsInstallation costsFinancial Position ettythings
  10. 10. Vendor rating– The ability to select reliable vendors is a successful purchasing action ettythings
  11. 11. Rating Techniques Categorical Plan The weighted Point Plan Critical Incidents Method Checklist SystemA. ReliabilityB. Technical capabilitiesC. After- sale serviceD. AvailabilityE. Buying ConvenienceF. Sales assistance ettythings
  12. 12. Ethics in Purchasing• Ethics is segment of philosophy concerned with values of human conduct.• the term ethics refers to a code of conduct that guides an individual in dealing with others.Ways to achieving Ethical Behaviour Definite polices on all matters involving ethics should be formulated An attempt should be made to create a working environment ,where unethical temptations seldom become realities ettythings