Manjunat h material management

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Manjunat h material management

  1. 1. Presented by :Mr. Manjunath halkeri M.Pharma 1st yr (Pharmaceutics) BLDEA’s College of pharmacy, Bijapur. Under the guidance of :Dr C.C.Patil,M.pharm,Ph.D Dept. of Pharmaceutics, BLDEA’s College of pharmacy, Bijapur.
  2. 2. CONTENTS  Definition  Objective and importance  Principles of material management  Functions of material management  Materials – Quality and Quantity
  3. 3. CONTENTS  Value analysis  Purchasing  Vendor development  Buying techniques  Purchasing cycles and procedure  Advantages of material management
  4. 4. DEFINITION It is defined as an organizational concept, which has the authority and responsibility of all activities, concerned with the flow of materials in the organization or Material management is a scientific technique, concerned with Planning, Organizing &Control of flow of materials, from their initial purchase to destination.
  5. 5. OBJECTIVES AND IMPORTANCE Efficient use of the working capital.  Responding to the market changes related to any product.  Ensuring the cooperation of all departments.  Providing best services to the king of the market i.e customer.  Lowering inventory investment and increasing the inventory turnover.  Right quantity of supply ,at right place and time 
  6. 6. PRINCIPLES OF MATERIAL HANDLING  Simple inventory control programme  Least handling is the best handling.  Minimize the distance  Lengths and number of move to be minimized  Unit loads
  7. 7. PRINCIPLES OF MATERIAL HANDLING  The materials handling service should not interfere with the production flow.  The design of the container e.g. shippers are used for storing finished bulk. & for raw materials as per the property of materials they are stored- plastic containers ( light weight containers)  Re-handling and back tracking of the materials should be avoided.
  8. 8. CLASSES OF MATERIALS  Raw materials:- These are materials that are used in the product which is in an unprocessed condition.  Supplies:- These are consumable goods used in the process of manufacturing.  Purchased Parts:- These are the items used in the assembly of the product.
  9. 9.  In-progress materials:- They are called ‘work in progress’ inventories. These goods require further processing.  Finished materials:- These are fully manufactured goods, inspected and ready for delivery to the customers.
  10. 10. FUNCTIONS OF MATERIAL MANAGEMENT
  11. 11. MATERIALS-QUALITY & QUANTITY Four factors affecting the purchase of raw materials are 1) Quality :- The suitably of an item to accomplish the intended work. The raw materials should satisfy the following requirements. i. Efficiency of the material. ii. Cost and the shelf –life. iii. For equipments, power consumption and power requirement. 
  12. 12. 2) QUANTITY  i. ii. iii. iv. 3) 4) From the inventory point of view, quantity standards are decided on the following parameters; Maximum inventory Minimum inventory Standard order Reorder point Price Delivery Date
  13. 13. VALUE ANALYSIS   i. ii. iii. iv. Definition:- It is a systematic study of every element for it’s cost in a part, material or service to make certain that it performs it’s function at the lowest possible cost. Benefits of value analysis:Decrease in existing cost of the product or service. Unnecessary expenditure is identified and eliminated. Product value improves for new materials and processes. More profits.
  14. 14. TYPES OF VALUE User value: properties that accomplish use, work or service. Ex:- self sealing tape Cost value: properties that are the sum of labour, material, overheads & other costs, required for producing that object Ex:- mixing, granulation & drying are done in single equipment. Value ratio: it is expressed as Value =function Total cost 11/24/2013 14
  15. 15. PURCHASING Advantages  Efficient system  Bargaining capabilities increased  Good raw material obtained at lower price Decentralized:different department purchase their requirement seperately. This is basically seen in large organizations. 11/24/2013 Centralized :- the purchasing procedure of materials for different department is done together from one purchasing department. This is seen in small organizations. Advantages  Flexible purchasing system  Procurement is faster 15
  16. 16. VENDOR DEVELOPMENT The supplier or the person who sells the required materials or services for the production is known as a vendor. The purchase of raw materials/service from a specific vendor is known as the vendor development. There are four stages of vendor development:- 11/24/2013 16
  17. 17. Four stages of vendor development Stage Name Development Survey stage Identifying the potential sources of suppliers. Seeking information. Provisional vendors list. Enquiry stage Analysis of information in standard enquiry format. Accreditation, FDA approval, ISO certification. Personal visits. Quality control specifications, clarification, credit, quantity discounts. Performance appraisal, Quality, delivery time. 1st 2nd 3rd Negotiations and selection stage 4th Experience and evaluation stage 11/24/2013 17
  18. 18. 1) SURVEY STAGE The following sources are considered for information  Trade directories :- e.g. Yellowpages.eindiabusiness.com  Trade journals:- e.g. Pharmatimes  Telephone directories  Supplier’s catalogue  Salesmen Other ways are like interchanging of information with other companies, tracing of public tenders and advertisements in the press. 11/24/2013 18
  19. 19. 2) ENQUIRY STAGE After getting the information of the suppliers, detailed analysis of the supplier is being carried out. A comparison is being made between the different suppliers on basis of the following points:a. b. c. d. Technological competition, service competition, price competition, delivery time. 11/24/2013 19
  20. 20. The following aspects can be verified by the first hand visit:     Internal facilities of the vendor Financial adequacy, stability and reputation of the vendor Location of vendor’s factory After sales service Industrial relations 11/24/2013 20
  21. 21. 3) NEGOTIATION AND SELECTION STAGE  The vendors who clear the enquiry stage are selected and negotiations are being carried out with them.  The various aspects such as credit, quantity discount, quality specifications are being discussed. 11/24/2013 21
  22. 22. 4) EXPERIENCE AND EVALUATION STAGE The buyer evaluates and appraises the performance of the vendor.  The objective is to improve the performance of the vendors. Few ways of evaluating a vendor are:o Categorical method o Weighted point method  11/24/2013 22
  23. 23. CATEGORICAL METHOD The buyer sets up some category on which the evaluation of the vendor is done. Specimen of supplier’s evaluation form is given below. Grading Factors Always 9 8 7 Usually 6 5 4 Seldom 3 2 1 Never 0 Supplies are as per quantity selected Deliveries are on time Rigorous follow up is not necessary Willing to accommodate when production schedules are suddenly changed 11/24/2013 23
  24. 24. WEIGHTED POINT METHOD Here the rating points are divided between quality, delivery and price. For eg quality – 50 points delivery- 30 points price – 20 points so total is 100 points. The rating can be obtained by following equation. 11/24/2013 24
  25. 25. WEIGHTED POINT METHOD Quantity rating = (no. of lots accepted/ no. lots received) ×rating points Delivery rating = (no of lots delivered on time/ no of lots delivered) rating points Price rating =(least offer received/ supplier’s offer) rating points 11/24/2013 25
  26. 26. BUYING TECHNIQUES Purchasing of material , machinery and services is done by purchasing department. For buying the material company has to pay up a price, the value that a seller sets on his goods in the market is called as the price of that good. Price is one of the greatest variables in the purchasing of material. 11/24/2013 26
  27. 27. HOW IS THE PURCHASING DONE????  Quotations :- It is a kind of an enquiry done to know whether the vendor can supply the desired material and at what price.  They are not the purchase order. They just contain all the details including freight, taxes and many other costs.  The highly used quotation techniques are  Spot quotations  Floating a limited enquire 11/24/2013 27
  28. 28. HOW IS THE PURCHASING DONE????  Spot quotations:- this is basically used for the small items not related to the technical purpose. The prospective buyer goes to the market and gets the quotations from the different suppliers.  Floating a limited enquire:- this method is used when the value of the purchase is small. In this technique the reliable vendors are called upon and asked to provide the quotations. 11/24/2013 28
  29. 29. HOW IS THE PURCHASING DONE????  Tenders:It is a written letter or a published document that is aimed at finding the price for procuring certain materials. Tenders are invited from recognized firms. A few types of tenders are:  single tender  Open tender  Closed tender or limited tender 11/24/2013 29
  30. 30. HOW IS THE PURCHASING DONE????  Single tender:- It is invited from one reliable supplier. This kind of tender is floated only when the itms are required urgently. tender:- Also known as ‘ press tender’. This is used when the value of item to be purchased is very high. It is used to locate more suppliers. In this tender procured, a small amount of the deposit money is taken from the supplier so that they do not withdraw from the submitted rates.  Open 11/24/2013 30
  31. 31. HOW IS THE PURCHASING DONE????  Closed tender or limited tender (Negotiations):- It is done to arrive at the mutual understanding between the supplier/vendor and the buyer. Negotiations It may be defined as an art of arriving at a common Understanding through bargaining on the essentials of a Contract such as delivery, specifications, prices and term 11/24/2013 31
  32. 32. HOW IS THE PURCHASING DONE???? What’s the need for negotiation?  prices are related to large volumes or to a large value.  terms and conditions are required for large volumes.  contract is desired for a longer period.  variations in quantity to be purchase are possible.  when supplies or services can be obtained from only one source.  when no acceptable quotations are received from the other vendors. 11/24/2013 32
  33. 33. HOW IS THE PURCHASING DONE???? Process of negotiations:- It is a kind of win-win situation. Both the parties try to benefit to the maxima through the negotiation. It is not a kind of bargaining but a mutual understanding between the two parties. 11/24/2013 33
  34. 34. HOW IS THE PURCHASING DONE???? Discounts:- They are cash concessions offered by the vendor to the buyer, in order to enhance the volume of the business opportunities. Reasons for offering discounts????? ! When there is a bulk purchase. ! When the bills are cleared immediately. ! And also to maintain the good rapo with the buyer Types of discounts:1) Volume contracts. 2) Deals 3) Discounts 4) Consignment terms  11/24/2013 34
  35. 35. HOW IS THE PURCHASING DONE????  Volume contracts:- This kind of discount is offered proportionate to the volume of material ordered.  Cash discount:- Cash discount is given on the basis of the time of the payment done by the purchaser. The normal credit period is 90 days.  Cumulative discount:- It is a method of offering the discount on the basis of actual purchases and appropriate to the quantity range in a year. 11/24/2013 35
  36. 36. PURCHASING CYCLE AND PROCEDURE The purchasing department of the company is responsible for the purchase of all the raw materials as well as the requirements. The following steps are followed in the purchasing cycle. 1) Recognition of need and receipt of requisition: The requisition includes the following information:- Name - Quality and quantity specifications - Date by which material is required - Place at which material is to be delivered  11/24/2013 36
  37. 37. PURCHASING CYCLE AND PROCEDURE 2) Selection of potential sources of supply 3) Making request for quotation 4) Receipt and analysis of quotations - material specifications and quality - price of the material - taxes - terms of payment - place of delivery - delivery period - guarantee period - validity of tender 11/24/2013 37
  38. 38. PURCHASING CYCLE AND PROCEDURE 5) Selection of right source of supply 6) Issuing the purchase order 7) Follow-up of the order 8) Receipt of materials,reports and analysis 9) Checking and approving of vendor’s invoice for payment 10) Closing of completed order 11) Maintenance of record and file Purchasing cycle flow chart has been given in the following slide. 11/24/2013 38
  39. 39. Need recognition Spell out of specifications & requirements Official requisitions Check specifications, prices/supplies Specifications file Enquiry tender Select suppliers Purchase records Supplier’s record Quotations & analysis prices and terms, negotiations, finalisation Purchase order for supply Follow-up 11/24/2013 Suppliers’ acceptance 39
  40. 40.  Contd …. Delivery of materials Checking of invoice with purchase order Materials & reports, analysis Payment made 11/24/2013 40
  41. 41. Location of Stores :  Store should be manufacturing area. located adjacent to the It depends up on nature and value of items to be stored and frequency with which items are received and issued Objectives :  Minimum wastage of space  Maximum ease of operation  Minimum handling cost  Minimum other operational cost 11/24/2013 41
  42. 42. FACILITIES OF STORE Inspection center Quarantine room Washing room Centralized weighing department Adequate space 11/24/2013 42
  43. 43. Functions of stores  GENERAL FUNCTION :  Maintenance of Stock (materials and tools)  Maintenance of hygiene, sanitation, and pest control  Maintenance 11/24/2013 of material handling equipment 43
  44. 44. Functions of stores  SPECIFIC FUNCTIONS :  Receiving & recording of raw materials  Quarantine storage – Sampling & approval by QC  Positioning & Storage  Issuing & recording of materials  Receiving & Dispatching of finished goods  Distribution  Optional functions :  Dispensing, Maintenance of weights & measures 11/24/2013 44
  45. 45. MATERIALS HANDLING  The movement of materials (raw materials, scrap, semi finished and finished) to, through, and from productive processes; in warehouses and storage; and in receiving and shipping areas. 11/24/2013 45
  46. 46. GOALS OF MATERIAL HANDLING  The primary goal is to reduce unit costs of production  Maintain or improve product quality, reduce damage of materials Promote safety and improve working conditions Promote productivity  material should flow in a straight line  use gravity! It is free power  move more material at one time  mechanize material handling  automate material handling   11/24/2013 46
  47. 47. GOALS OF MATERIAL HANDLING Promote increased use of facilities  Reduce tare weight (dead weight)  Control inventory  11/24/2013 47
  48. 48. IMPORTANCE OF MATERIAL MANAGEMENT Increase in cost of raw materials & finished products  Delay in production schedule & long cycle  Increase in in-process inventories  Damage or loss of material & employee safety liabilities  Employee frustration & reduced morale  Customers dissatisfaction  11/24/2013 48
  49. 49. APPLICATIONS OF MATERIAL MANAGEMENT EQUIPMENT IN PHARMACEUTICAL INDUSTRY Production department  Stores department  11/24/2013 49
  50. 50. FUNCTIONS OF MATERIAL HANDLING Handling of unit load :-the principle of containerization, unit-load & palletization are employed for moving an optimum number of pieces at a time to their ultimate destinations.  Placement of equipment :-In production operations, appropriate plant layout & proper placement of equipment minimizes the movement of materials.  Appropriate material handling equipment :Mechanical aids should be employed in place of manual handling.  11/24/2013 50
  51. 51. SELECTION OF MATERIAL HANDLING SYSTEMS  The best equipment is one that : Permits smooth & continuous production flow Involves less number of accidents Reduces production cycles time Promotes better working condition Lessens fatigue to the operators Brings down total material handling cost 11/24/2013 51
  52. 52.  Nature of material to be moved :- the size, weight, delicacy, nature (solid, liquid, gas) of material & chances of getting damaged during handling should be considered. Plant building & layout :-A multi-storeyed building facilitates the use of gravity for material flow. The door locations,sizes,ceiling heights, roof& floor strenghts,columns,etc.. Production machines :-Different machines have different outputs per unit time. 11/24/2013 52
  53. 53. Type of material flow patterns :-A vertical flow pattern requires elevators,conveyors,pipes etc.,whereas horizontal flow patterns need trucks, overhead bridges, cranes, conveyors etc.  Type of production :-Conveyors are more suitable for fixed routes for continuous process & powered trucks are suitable for batch operation.  11/24/2013 53
  54. 54. Cost of material handling equipment :-The initial cost of handling equipment are high. when human contact with product must be minimized, equipment is the alternative, hence cost does not limit the installation.  Handling costs :-Economy in material handling can be achieved by employing gravity-aided movements & minimizing the distance of material travel. A system that allows the product directly fall over the material handling equipment is more ideal.  11/24/2013 54
  55. 55.  Life of equipment :-Proper periodic insepection,repairs & maintaences of equipment increases its life. smoothen the flow of materials & economize the production system. 11/24/2013 55
  56. 56. MAINTENANCE OF MATERIAL HANDLING EQUIPMENT Inspection :-all parts, open or covered are inspected for wear & tear. Worn out or unworkable components such as wire ropes, bearing & bolts, are identified & remedial measures are taken. Breaks are adjusted & lubricated wherever & whenever necessary.  Repairs :-After inspection, all repairable parts are corrected & minor defected are rectified. open gear transmission, coupling, riveted & bolted joints, trolleys, breaks, guards etc., require frequent repairs.  11/24/2013 56
  57. 57.  Overhaul:-involves dismantling the complete mechanism & replacing the damage components. Crane structure, buffers, rails, open gear transmission, pulley blocks etc., may be overhauled & various sub mechanisms may be aligned & adjusted. 11/24/2013 57
  58. 58. UNIT-LOAD, PALLETIZATION & CONTAINERIZATION It is easier & faster to move a hundred small parts by grouping them into one unit than moving them individually one by one. these are collectively known as unit-load.  For example, each formulation of tablet contains a number of ingredients. For a lot size, ingredients(raw materials) are weighed & packed individually & loaded onto a pallet.  11/24/2013 58
  59. 59.  11/24/2013  Pallet is one unit load these are moved to the production department by suitable handling system. Depending on the types of item to be transferred, a suitable pallet can be designed. for example, items of irregular in shape are liable to be damaged by crushing, for such items, a post pallet is useful. small items can be placed in a wire mesh-box. 59
  60. 60.   Containerization 11/24/2013 Containerization uses the principle of unit load. in this system, a big metal container is filled with a number of small products. many such containers are placed on a truck or trailer that is pulled by tractor or truck. such containers can be loaded on railway trailers & transported. 60
  61. 61. TYPES OF MATERIAL HANDLING SYSTEMS  Conveyors:-are employed for transporting materials in a fixed path, which may be horizontal, vertical or inclined to different locations of a factory. these prove economical, if the flow of material is continuous. 11/24/2013 61
  62. 62. BELT CONVEYORS It is used in transporting containers (bottles) for filling, capping, sealing, labeling, visual inspection etc.,in production of injectables,liquid orals, ointments & jellies.  Several types of other conveyor are available. example are roller conveyor, slat conveyor, wheel conveyor, apron conveyor, pusher bar conveyor, & bucket conveyor.  11/24/2013 62
  63. 63.  Belt Conveyors ◦ Conveys materials along horizontal, and slightly inclined paths ◦ Driven by power operated roll mounted underneath the conveyor or at the one end of the conveyor. ◦ supported on either rollers or on metal slider pan and we call them roller conveyor and slider conveyor respectively 11/24/2013 63
  64. 64. BELT CONVEYORS-ADVANTAGES Belt can be made of asbestos fibers, neoprene, Teflon, & vinyl polymer. cord belt are also used.  Belt conveyors are for general purpose installation & available in relatively large sizes. these can travel several kilometers as in case of coal mines.  Routine maintenance is easy.  It is economical.  Disadvantage-it is expensive.  11/24/2013 64
  65. 65. PNEUMATIC CONVEYOR Pneumatic conveyor or pipeline conveyor is one of the most commonly used handling techniques in chemical industry. it is employed when the material is light & bulky, for example, formulation of powder insufflations.  This type of conveyor is a closed system, handling of unpleasant & injurious substance is easy. it is used for transporting of granular(example,wheat)or pulverized material(example,salt)through the pipes.  11/24/2013 65
  66. 66. PNEUMATIC CONVEYORS    Involves the transportation of a wide variety of dry powdered and granular solids in a gas stream. In most cases the gas is normally air. Where special conditions prevail, different gases are used. 11/24/2013 66
  67. 67. WHY PNEUMATIC CONVEYING?  Advantages       Dust free transportation of a variety of products. Flexibility in routing. Low maintenance and low manpower costs. Multiple use. Security. Ease of automation and control. 11/24/2013 67
  68. 68. WHY PNEUMATIC CONVEYING?  Disadvantages      High power consumption Wear and abrasion of equipment Incorrect design can result in particle degradation Limited distance By virtue of the complex flow phenomenon which take place, there is a requirement for high levels of skill to design, operate and maintain systems 11/24/2013 68
  69. 69. FORK-LIFT TRUCKS  It consist of forks attached to a column of the truck. fork can be lifted upto the desired height with material(boxes) on them. the material can be stacked at the proper place very close to the roof in warehousing & shinning area. fork-lift trucks are used for short distance(40 to 70 meters) travel. these are used for indoor applications. 11/24/2013 69
  70. 70. Platform truck (low-lift) is used for transporting the palletised raw materials of a lot-size manually from the warehouse to the production area.  Platform trucks (high lift) is used for loading the tablet granules into double cone blender.  11/24/2013 70
  71. 71. Three wheel fork lift 11/24/2013 Four wheel fork lift 71
  72. 72. CRANES  Cranes are employed for lifting & lowering of bulky items, packages & boxes. these find applications in heavy engineering industry & generally in intermittent type of production. 11/24/2013 72
  73. 73. HOISTS  Hoists means lift or pull something up to higher place (overhead position) with ropes. this equipment is mounted on single rail fixed at the height nearer to the roof. hence, material are transferred along fixed path. hoists find application in industries employing chemical cleaning. Cranes are used for heavy items & hoists are employed for small items.s 11/24/2013 73
  74. 74. Air operated Hoist 11/24/2013 Electric Hoist 74
  75. 75. SLIDES, CHUTES & LIFTS  Slides can be straight, spiral & vibrating, & made up of wood or steel. these transfer small jobs that can slide down under gravity. vibrating slides transport material up & inclined.(example,cigarette factories) 11/24/2013 75
  76. 76. CHUTES 11/24/2013 Chutes have sheet metal or roller base for transferring components down the incline. chutes generally deliver the feed material directly onto the conveyor to reach the destination further.  Spiral chutes are used for transporting sealed vials from aseptic area to packing section using gravity principle.  76
  77. 77. LIFTS  Lifts are used to transport material up in multi-stored plants. it is a fast & flexible equipment for floor to floor travel. buckets or trays are mounted on the endless chain running from the ground floor to the top floor. the material can be loaded into trays automatically. 11/24/2013  77
  78. 78. TRACTORS & TRAILERS 11/24/2013 Three wheeled or four wheeled tractors are employed & fitted with an IC engine drive. these are used for outdoor applications.  Trailers are loaded with the material & attached to the tractor. it can be either uncoupled from the tractor or the material can be dumped in respective stations.  78
  79. 79. REFERENCES  Pharmaceutical Production & Management by C.V.S. Subrahmanyam, Vallabh Prakashan, first edition, pg. no. 260267.  Modern business organization & Management systems approach by Prof.S.A.Sherlekar,V.S.Sherlekar, Himalaya publishing house, 5th edition,pg.no.5.38–5.58.  Applied production & operation management by rd edition, West Evans, Anderson, Sweemey & Williams, 3 publishing company ltd.  Management (Task, responsibility & practices) by Peter F. Ducker, Allied publication, Bangalore.  The eastern pharmacist-1993  www.google.com 11/24/2013 79
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