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material management.pptx

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material management.pptx

  1. 1. Material management ⚫Costof materials in thedifferent industries may range from 50 to 85% of productioncost. ⚫Planning and controlling the flowof materials
  2. 2. Definition It is concerned with planning, organizing and controlling the flow of materials from their initial purchase through internal operations to the service point throughdistribution. OR Material management is a scientific technique, concerned with Planning, Organizing &Control of flow of materials, from their initial purchase to destination.
  3. 3. AIM OF MATERIAL MANAGEMENT Toget 1. The Rightquality 2. Rightquantityof supplies 3. At the Right time 4. At the Right place 5. Forthe Rightcost
  4. 4. OBJECTIVES OF MATERIAL MANAGEMENT 1. To minimize material cost. 2. To maintain desired qualityof material at minimum cost. 3. Toreduce investments tied in the industry. 4. Topurchase, receive, transportand store material efficiently. 5. Totrace new sourcesof supply & todevelopcordial relationwith them.
  5. 5. Four basic needs of Material management 1. Tohaveadequate materialson hand when needed 2. Topay the lowestpossibleprices, consistentwith quality and value requirement for purchases materials 3. To minimize the inventory investment 4. Tooperateefficiently
  6. 6. Classes of Materials 1. Raw Materials: The raw materials are the unprocessed material which are used for converting into finished products. e.g. iron ore, cotton jute, sugar cane, artificial fibers, chemicals etc.
  7. 7. Classes of Materials 2. Purchased Parts: The purchased parts are used in the assembling the product. e.g. nuts & bolts, screws, gears, wheels, etc.
  8. 8. Classes of Materials 3. In-process Material: These are partly manufactured products which need furtherchangeof from processing.
  9. 9. Classes of Materials 4. Finished Goods: The product complete in all respect, inspected and prepared forsale in the market.
  10. 10. Classes of Materials 5. Supplies: All consumable items used in the manufacturing operation are supplies. e.g. oils, diesel, stationary, etc.
  11. 11. Scope of Material Management ⚫Material Requirement Planning & Control ⚫Procurement ⚫Inventory Control ⚫Receiving & Inspection ⚫Transportation ⚫Material Handling ⚫Disposal of Materials ⚫Value Analysis
  12. 12. Material Control Material control is a systematic control over the purchasing, storing and using of materials to minimizing the possiblecost.
  13. 13. Objectives of Material Control 1. To insureavailabilityof materials. 2. Toavoid excessive investments in materials. 3. To ensure thequalityof material. 4. To insure minimum wastage. 5. Toensure timelyaction forprocurementof materials. 6. To maintain recordsof materials.
  14. 14. Purchasing Purchasing is the procuring of materials, supplies, machines, tools and services required forthe equipment, maintenance and operationof a manufacturing plant. Importance ⚫Contributes to the competitive advantage of the firm, ⚫Significant portion of the logisticscosts
  15. 15. Managing the Procurement Process 1. Determine the typeof purchase ⚫ New ⚫ Straight re-buy ⚫ Modified re-buy 2. Identify the typeof purchase method - Determine the necessary levelsof investmentsof time & information. - The more complex the purchase, the more time needs to be gathered toget it right the first time.
  16. 16. Managing the Procurement Process 3. Perform the procurement process Do these activities that are necessary to effectively makea purchase and satisfy the user’s requirements. of the 4. Evaluate the effectiveness procurement process Were the user’s needs satisfied? Was the investment necessary?

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