Material management jay


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Material management jay

  1. 1. TOPIC – Material Management’s Important Function In Logistic & Supply Chain <ul><li>Project By— </li></ul><ul><li>Jay </li></ul><ul><li>Harmeet Kaur </li></ul><ul><li>Yashwant </li></ul><ul><li>Shushil </li></ul><ul><li>In our project --- Explanation of three important terms of firm’s operation , different functions of MM used in logistics & supply chain , change in the role of business , How MM complements logistics & supply chain & conclusion … </li></ul>
  2. 2. Material Management <ul><li>five M’s of an industrial organization are </li></ul><ul><li>MACHINE </li></ul><ul><li>MEN </li></ul><ul><li>MATERIAL </li></ul><ul><li>MONEY </li></ul><ul><li>METHODS </li></ul>
  3. 3. What is material ???
  4. 4. What is material management ??? <ul><li>Material management is a scientific technique, concerned with Planning, Organizing &Control of flow of materials, from their initial purchase to destination. </li></ul><ul><li>¥ Main source of increase in profitability are </li></ul><ul><li>-- maximizing the sales or, </li></ul><ul><li>-- minimizing the cost … </li></ul>
  5. 5. Material Mgt. <ul><li>It includes management of movement of materials and components within a firm --- in terms of need, flow, storage and cost. </li></ul><ul><li>Ideally Covers all the interrelate activities </li></ul><ul><li>concerned with materials … </li></ul><ul><li>Expense made on material is invested in various areas </li></ul><ul><li>Generally every manufacturing unit has 25 % to 75% of sales turnover investment in material </li></ul>
  6. 6. Aim of material mgt.--- <ul><li>Purchase material at low rates. </li></ul><ul><li>Development of good relations with the suppliers. </li></ul><ul><li>Development of good records. </li></ul><ul><li>Participating in product development. </li></ul><ul><li>Proper decisions on Economic make or buy. </li></ul>
  7. 7. Aim of MM (contd..) <ul><li>Establishing Standardization </li></ul><ul><li>Proper Forecasts </li></ul><ul><li>Good Inter-departmental relation </li></ul><ul><li>Proper regulation of inventory </li></ul><ul><li>Cutting operating costs </li></ul>
  8. 8. Important Functions Of Material Mgt.--- <ul><li>Buying or purchasing function --- </li></ul><ul><li>Pay low price for best value obtain </li></ul><ul><li>Negotiation </li></ul><ul><li>Vendor selection </li></ul><ul><li>Right quality on right time </li></ul><ul><li>Storage function --- </li></ul><ul><li>Minimizing transportation and material handling cost </li></ul><ul><li>Adequate and proper storage and preservation </li></ul><ul><li>Waste management </li></ul><ul><li>Movement or Distribution function --- </li></ul><ul><li>Distribution of finished good </li></ul><ul><li>Distribution of raw materials </li></ul>
  9. 9. Integrated Mat. Mgt. <ul><li>Various functions served by materials management include the material planning, purchasing, inventory control, scrap and surplus disposal. All these functions can have separate working norms including the one for  performance. </li></ul><ul><li>Thus integrating all of them to ensure efficiency in mat. Mgt process. </li></ul>
  10. 10. Importance of material management <ul><li>Ensures best control over inventory </li></ul><ul><li>Ensures best utilization of resources </li></ul><ul><li>Reduces fault and damages </li></ul><ul><li>Helps to save cost </li></ul><ul><li>Increases efficiency in work </li></ul><ul><li>produces an environmentally responsible and efficient outcome </li></ul><ul><li>Disposal of scrap & surplus material </li></ul>
  11. 11. Introduction of logistics: Logistics is the management of the flow of goods , information and other resources in a repair cycle between the point of origin and the point of consumption . What is Logistics? Logistics is the . . . “process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.“
  12. 12. <ul><li>Logistics Functions: </li></ul><ul><li>Purchasing /Procurement. </li></ul><ul><li>Inventory Control. </li></ul><ul><li>Warehousing. </li></ul><ul><li>Materials Handling. </li></ul><ul><li>Facility Location /Network Design. </li></ul><ul><li>Transportation. </li></ul><ul><li>Order Processing. </li></ul><ul><li>Packaging. </li></ul><ul><li>Information management. </li></ul>
  13. 13. PROCUREMENT <ul><li>Procurement function is concerned with purchasing and arranging inbound movement of materials parts and / or finished inventory from suppliers to manufacturing or assembly plants, warehouses or retail stores i.e., inbound logistics. It ensures the availability of the desired material assortment where and when needed. </li></ul>
  14. 14. PROCUREMENT STEPS: <ul><li>Information gathering. </li></ul><ul><li>Supplier contact. </li></ul><ul><li>Background review. </li></ul><ul><li>Negotiation. </li></ul><ul><li>Consumption, maintenance and disposal. </li></ul><ul><li>Renewal. </li></ul>
  15. 15. WAREHOUSING <ul><li>Warehousing encompasses providing adequate space for the inventory at the right locations, unpacking, sorting and consolidation of materials, and modification of material elements. </li></ul>
  16. 16. Functions of warehousing <ul><li>Consolidation. </li></ul><ul><li>Break bulk. </li></ul><ul><li>Cross docking. </li></ul><ul><li>Postponement. </li></ul><ul><li>Stock pilling. </li></ul><ul><li>Spot stock. </li></ul><ul><li>Assortment. </li></ul><ul><li>Product mixing. </li></ul>
  17. 17. TRANSPORTATION <ul><li>Transportation is one of the most visible and most important elements of logistics operation. It is mainly concerned with product movement and product storage. </li></ul><ul><li>Objectives of transportation: </li></ul><ul><li>To meet customer demand. </li></ul><ul><li>To move product. </li></ul><ul><li>Functions relating to incoming and outgoing of shipment. </li></ul><ul><li>Claims settlement, general correspondence. </li></ul>
  18. 18. INVENTORY MANAGEMENT <ul><li>Inventory management concerns decisions regarding the amount and type of materials stored at various locations. </li></ul><ul><li>Functions of inventory management: </li></ul><ul><li>Specialization. </li></ul><ul><li>Balancing supply and demand. </li></ul><ul><li>Economies of scale. </li></ul><ul><li>Overcoming uncertainty. </li></ul>
  19. 19. Material handling <ul><li>Material handling activities are required while unloading, moving and loading material. </li></ul>
  20. 20. PRINCIPLE OF MATERIAL HANDLING <ul><li>The facility in direct flow pattern. </li></ul><ul><li>Production processes. </li></ul><ul><li>Minimization of Human Efforts. </li></ul><ul><li>Heavy materials should be moved to the shortest distance. </li></ul><ul><li>The no. of times each material is handled should be minimized. </li></ul><ul><li>Flexibility of material handling equipments. </li></ul>
  21. 21. Supply Chain Mgt. <ul><li>What is supply chain mgt.??? </li></ul><ul><li>A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer </li></ul><ul><li>Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. </li></ul><ul><li>The main function of supply chain mgt. are outsourcing & relationship mgt. </li></ul>
  22. 22. Supply chain mgt. (cond…) <ul><li>Characteristics of supply chain--- </li></ul><ul><li>Service response </li></ul><ul><li>Integration of information </li></ul><ul><li>Technology assimilation </li></ul><ul><li>Workflow co-ordination </li></ul><ul><li>Synchronization </li></ul><ul><li>The trust </li></ul><ul><li>Quick response </li></ul><ul><li>A good supply chain mgt. benefits --- </li></ul><ul><li>Customer --- & </li></ul><ul><li>Company --- </li></ul>
  23. 23. Outsourcing <ul><li>Outsourcing or sub-servicing often refers to the process of contracting to a third-party. </li></ul>
  24. 24. <ul><li>The process of outsourcing generally encompasses four stages: </li></ul><ul><li>1) strategic thinking, </li></ul><ul><li>2) evaluation and selection, </li></ul><ul><li>3) contract development, </li></ul><ul><li>4) outsourcing management or governance, </li></ul>
  25. 25. Reasons for outsourcing <ul><li>Cost savings </li></ul><ul><li>Focus on Core Business </li></ul><ul><li>Cost restructuring </li></ul><ul><li>Improve quality </li></ul><ul><li>Knowledge </li></ul><ul><li>Contract </li></ul><ul><li>Operational expertise </li></ul><ul><li>Access to talent </li></ul><ul><li>Capacity management </li></ul>
  26. 26. Reasons for outsourcing(Cond…) <ul><li>Catalyst for change </li></ul><ul><li>Enhance capacity for innovation </li></ul><ul><li>Reduce time to market </li></ul><ul><li>Commodification. </li></ul><ul><li>Risk management </li></ul><ul><li>Venture Capital </li></ul><ul><li>Tax Benefit. </li></ul><ul><li>Scalability </li></ul><ul><li>Creating leisure time </li></ul>
  27. 27. Customer Relationship mgt. <ul><li>What is CRM? </li></ul><ul><li>             CRM stands for Customer Relationship Management . It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. </li></ul>
  28. 28. CRM (Cond…) <ul><li>CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends. </li></ul><ul><li>Phases of CRM </li></ul><ul><li>The three phases in which CRM help to support the relationship between a business and its customers are, to: </li></ul><ul><li>Acquire customer </li></ul><ul><li>Enhance customer </li></ul><ul><li>Retain customer </li></ul>
  29. 29. CRM contd… <ul><li>Various softwares that corporations use for CRM– </li></ul><ul><li>Contact management software </li></ul><ul><li>Help Desk Software </li></ul><ul><li>Contract Management Software </li></ul><ul><li>eCRM </li></ul><ul><li>Data mining software </li></ul>
  30. 30. Change in firm’s operating concepts in modern times <ul><li>Initially in 1970s--- distribution mgt. concept </li></ul><ul><li>Each function was committed to attain its own goal </li></ul><ul><li>No coordination among functions </li></ul><ul><li>Conflicting objective </li></ul><ul><li>Later in 1980s--- integrated logistic mgt. </li></ul><ul><li>Coordination among functions internal to an organization </li></ul><ul><li>Achieve a system-wide objective. </li></ul><ul><li>In Present scenario--- supply chain mgt. </li></ul><ul><li>Coordination among several firms </li></ul><ul><li>Create customer value </li></ul>
  31. 31. New business Trends In Present Scenario <ul><li>Supply chain </li></ul><ul><li>Outsourcing </li></ul><ul><li>Mergers & acquisitions </li></ul>
  32. 32. outsourcing <ul><li>What is outsourcing ??? </li></ul><ul><li>Outsourcing can be defined as “the strategic use of outside resources to perform activities traditionally handled by internal staff and resources”. </li></ul><ul><li>Evolution of outsourcing… </li></ul><ul><li>Advantages of outsourcing are – </li></ul><ul><li>#Savings in Labor Cost </li></ul><ul><li>#Speed </li></ul><ul><li>#Growing Global and Local Market Shares </li></ul><ul><li>#Focus to Accelerate Business Transformation </li></ul><ul><li>#Reductions of Risks </li></ul>
  33. 33. Key areas of outsourcing <ul><li>Outsourcing R&D & product development. </li></ul><ul><li>Outsourcing marketing promotions </li></ul><ul><li>Outsourcing information technology </li></ul><ul><li>Outsourcing portfolio mgt. </li></ul><ul><li>Outsourcing Finance and Accounting Outsource Partner (FAO) </li></ul><ul><li>Outsourcing customers services </li></ul><ul><li>Outsourcing logistic etc …. </li></ul>
  34. 34. Main Outsourcing Companies in India <ul><li>Tata consultancy service –It services, banking & finance ,IT infrastructure, consulting , supply chain, enterprise solution… </li></ul><ul><li>Tech mahindra -- IT service , R&D ,BPO </li></ul><ul><li>Infosys – IT,Cosulting,BPO,engineering </li></ul>
  35. 35. Mergers & acquisitions <ul><li>The process of mergers and acquisitions has gained substantial importance in today's corporate world. This process is extensively used for restructuring the business organizations. </li></ul>
  36. 36. <ul><li>Hindalco acquired Canada based Novelis. The deal involved transaction of $5,982 million. </li></ul><ul><li>Tata Steel acquired Corus Group plc. The acquisition deal amounted to $12,000 million. </li></ul><ul><li>Dr. Reddy's Labs acquired Betapharm through a deal worth of $597 million </li></ul>
  37. 37. Modern Business Case study <ul><li>Supply chain includes Flow of material . Flow of information & money </li></ul><ul><li>Main Source </li></ul><ul><li>|| </li></ul><ul><li>Supplier </li></ul><ul><li>|| </li></ul><ul><li>XYZ COMPANY --- (OUTSOURCING IT , CUSTOMER CARE , FINANCIAL , LOGISTIC SERVICE) </li></ul><ul><li>|| </li></ul><ul><li>Dealer/wholesaler </li></ul><ul><li>|| </li></ul><ul><li>Retailer </li></ul><ul><li>|| </li></ul><ul><li>Consumer </li></ul>
  38. 38. Change in firm’s focus
  39. 39. How importance of MM has increased with modern business??? <ul><li>Main Source </li></ul><ul><li>|| </li></ul><ul><li>Supplier </li></ul><ul><li>|| </li></ul><ul><li>XYZ COMPANY --- (OUTSOURCING IT , CUSTOMER CARE , FINANCIAL , LOGISTIC SERVICE) </li></ul><ul><li>|| </li></ul><ul><li>Dealer/wholesaler </li></ul><ul><li>|| </li></ul><ul><li>Retailer </li></ul><ul><li>|| </li></ul><ul><li>Consumer </li></ul>