Materials management –objective, scope & function (2)

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Materials management –objective, scope & function (2)

  1. 1. Materials Management –Objective, Scope & Function
  2. 2. Objective of Materials Management <ul><li>Continuity of supply </li></ul><ul><li>Cost reduction </li></ul><ul><li>To ensure consistency in quality. </li></ul><ul><li>To reduce inventory investment. </li></ul><ul><li>Cordial supplier Relations </li></ul>
  3. 3. Balaji Rechargeable Fan Co. <ul><li>There was need of rechargeable fans in the market because of load shedding & regular power cut. Looking at the demand Balaji decided to go for an aggressive marketing, which led to an impressive business growth yr 2007. </li></ul><ul><li>But in the 1 st quarter of the yr 2009, Balaji rechargeable fan co. could not do well. Company's sales were down by 40% with respect to the 1 st quarter of 2008. Looking at the situation he called an urgent meeting of his key managers and tried to identify the reason for lower sales in the quarter. They identified one of the major reasons for fall of the sales. Failure of commitments made to key customers due to stock outs of materials. </li></ul>
  4. 4. Definition of Materials Management <ul><li>Business Definition for: Materials Management - An approach for planning, organizing, and controlling all those activities principally concerned with the flow of materials into an organization. </li></ul><ul><li>The scope of materials management varies greatly from company to company and may include materials planning and control, production planning, purchasing, inventory control and stores, in-plant materials movement, and waste management. </li></ul>
  5. 5. Scope of Materials Management <ul><li>Material Planning & Control </li></ul><ul><li>Purchasing </li></ul><ul><li>Stores & Inventory Control </li></ul>
  6. 6. Function of Materials Management <ul><li>Material Planning </li></ul><ul><li>Purchasing </li></ul><ul><li>Receiving & inspection </li></ul><ul><li>Warehousing </li></ul><ul><li>Transportation (inwards & outwards) </li></ul><ul><li>Inventory control </li></ul><ul><li>Material Handling </li></ul><ul><li>Disposal of scrap,obsolete and surplus </li></ul><ul><li>Value analysis </li></ul>
  7. 7. Interface of Materials Management with other Functions <ul><li>Interface with Marketing </li></ul><ul><li>Interface with Production </li></ul><ul><li>Interface with Finance </li></ul><ul><li>Interface with Inspection and quality control </li></ul>

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