Material ion

8/6/2019 Material ion

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MATERIAL MANAGEMENT


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GROUP MEMBERS

y AJEENKYA R.NIPPANIKAT 26

y ANJALI ROHRA 37

y SHARON ABRAHAM 41

y SUBHASH G.TEKALE 49


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INTRODUCTIONINTRODUCTION

yy PRILIMINARYORGANIZATIONPRILIMINARYORGANIZATION

BUY SELL

BUY SELL

BUY SELL


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INTERNATIONAL MATERIAL

MANAGEMENT SOCIETY

y TheInternationalMaterialManagementSocietytakestheleadroleinlookingafterandcoordinatingtheactivitiesinthisfield.

y MorethantheUnitedStates,in Japan,theMaterialsManagementSocietyisthemajororganizationofitstype.

y

Similarly,the BritishequivalentoftheNationalAssociationofPurchasingManagementhas beenidentifiedforsomeyearsastheInstituteofPurchasingandSupply,inordertoprovidegreateremphasistomaterialmanagementactivitiesotherthanpurchasing.


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INDIANINSTITUTEOFMATERIAL

MANAGEMENT [IIMM]y IIMM is working to promote excellence in material

management towards national prosperity

through sustainable development.

y Material Management is common to every

organization simply because no one is completely

selfsufficient.

VALUEADDEDBYMANUFACTURE

BUY SELL


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VALUE ADDED BY DISTRIBUTION

y Example:-yM/S. Godrej manufactures has a big size chemical

plants in Mumbai.y The efforts of distribution are highly underestimated.yM/S Supreme sound and light company, manufacturing

TV sets.yMuch of the value added to the products comes from

distribution.

BUY PROCESS CUSTOMER


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THEORGANISATION OF

MATERIALS

1. OFFICEANDADMINISTRATIVEACTIVITIES

2. PURCHASE.

3. RECEIVINGTHEINCOMEMATERIALS.4. STORESANDWAREHOUSING.

5. TRANSPORTANDINTERNALMATERIALMOVEMENT.

6. DISPATCHINGTHESEMIFINISHEDANDFINISHED

MATERIALS.


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OBJECTIVESOFMATERIAL

MANAGEMENTy PURCHASEMATERIALSATLOWRATES.

y KEEPTHEDEPARTMENTEXPENSESLOW

y DEVELOPMENTOFGOODSUPPLIERS

y DEVELOPMENTOFGOODRELATIONWITHSUPPLIERS.

y DEVELOPMENTOFGOODPESONNEL.

y DEVELOPMENTOFGOODRECORDS.

y FAVOURABLERECIPROCLERELATIONS.

y PARTICIPATION INDEVELOPMENTOFNEWMATERIALANDPRODUCTS.

y ECONOMICMAKEORBUY.


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OBJECTIVESOFMATERIAL

MANAGEMENT

y STANDERDIZATION.

y PRODUCTIMPROVEMENT.

y INTERDAPARMENTALRELATIONS.

y FORECASTS.

y EXPANSIONOFBUSINESSBYACQUISITIONS.

y REGULATINGINVENTORY.

y CUTTINGOPERATINGCOSTS.

y EFFECTSOFBUSINESSCHANGES.

y BALANCINGOFOBJECTIVES.

y ACHIVEMENTSBRINGSACRIFICIES.

y ACHIEVINGTHEOBJECTIVE.


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TYPESOFORGANISATIONSThearefourtypesof

organisations:

1. Function based Organization

2. Location based organization

3. Productorprojectbased Organization4. Process based organization

Function based Organization:Generallywork is

divided byfunction. Thisusesthe bestexpertiseofeveryperson.


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ADVANTAGESOFFUNCTION

BASEDORGANISATIONy More efficient operations take place

y Jobs can more readily be broken up intohighly skilled and lessskilled elements

y Organization becomes more flexible

y Improvement in the buying power takes place

in the company


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F NCTI N ASED

GANISATI N

yEmployeemayfeeldullinthe

job.

y T

hereisalotofspecialization,personstrytomakestrictrules

intheirjobs.


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LOCATIONBASED

ORGANIZATION

y A large organization expands its operation at

number of places.

y Division of work by location is desirable at

some level in the organization.

y When the materials organization is by plant,materials personnel can work more closely

with the other departments in the factory,


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Productorprojectbased

Organizationy Materialsorganizationexiststo helpmake

someproductorservice moreprofitably.

y The buyersareassignedtosomeproductor

groupof products.

y A projectorganizationisaproductorganization for limited lifeof theproject.


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PROCESSBASED

ORGANIZATION

y The buyer or the set of buyers are expert in

specific process or stage of manufacture.

y This is a need of typical business line.

y The basic concept of material management is the

administration of the flow of materials.

y Responsibility passes from department to

department.

y The materials move from the idea stage to

fabrication.

y Specific process materials managers report to

specific managers.


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PLACEOFMATERIALS

MANAGEMENT

MARETIAL

DEPARTMENT

ENGINEERING

DEPARTMENT

PRODUCTION

PLANNING

PRODUCT

DESIGN

PLANT

MANAGEMENTPERSONNEL

INDUSTRIAL

ENGINERRING

MANUFACTURING

SHOPS

MARKETING

DEPARTMENT


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DEVELOPMENTOFMATERIALS

MANAGEMENTDEPARTMENTy Materials management activities are performed

primarly along with other activities

y Purchasing usually has the highest organization

status

y Physical distribution does not exist as a separate

function

y Materials manager are also responsible for a

variety of minor activities


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SPANOFCONTROL

yDivisionOfWorkByFunction


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Functionsofmaterial

management

y Introduction:

Fordoingthe jobefficiently ,purchase

deptmusthaveacloserelationship withthe design, quality control& production

depts.

Production deptindicates whatis

required?

Designcontroldeptchecks whatis

required?

Toachievethegoal& objective

.


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MakeorBuy:

Anynewlyreleased product, itssubassemblies &

componentsare taken up fordecision of make

orbuy

MAKE to manufacture in factory.

BUY to get the component madeby

vendor.

Facilities procurement:

in caseof component tobe manufature

specific investment isrequired tobe done in

the facilities & equipment for largeexpansion


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Calculatingquantitiesforscheduling:Calculatingquantitiesforscheduling:

The processofplanning& schedulingstarts withasalesforecast, basedon marketresearchstudies.

Thisforecastisconvertedinto masterproduction

schedule.

Orderingofmaterial:Orderingofmaterial:Whenrequirementhavebeencalculated , theorder

processbegins.

The procedureofpurchaseifasfollowing:Getrequisitions.

Sendenquiriesforquotation.

Negotiate & placeorder.

Dothefollow up.

Gettheacceptedmaterialby quality


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Packingthefinishedgoods & storing&

dispatch:The purchased material movesinfactory

&getprocessedtoform thefinishedproductof

thecompany.

Distributionofmaterial:

finishedgoods mustmovedfrom theproduction linetoacompany warehouse &

furthertocustomer.

Managermay also beresponsibleforthe

physical movementofpartially finished


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Inventorycontrol:

Along with thereceiving report& the approvedinceptionrepotthe materialgoestostores forbinning.

Materialgoing tostorebecomecompanies inventory

.Controlling this inventory is oneof the prime

functionof materialperson.

Safetymargin:

anyminordelayof a minorcomponentmaycause a

seriousshortage. The materialmanagerdoes package

procument& isresponsible forpackage design.

Materialmovement:The movementof material in factory& outof

factory is importantfunctionof materialdept. it is

concerned with incoming of purchased materials & is also


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PARTICIPATIONINTHEPRODUCT

DEVELOPMENT

1. Cost estimates.2. Proposing standard components.

3. Manufacturability of component.

4. Supplier development.

5. Guiding design decisions.

6. Introducing new materials.


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Practicesinmaterials

management

y Introduction: Whenthematerialmanagementsetsthe objectivesand aims,the plansareto bemadeto

y Achievethose. orthatpurposethe plans,proceduresand policiesareessential

y Definition of practiceand policies:

Proceduresarethespecificadministrativeactionsneeded to carry outpolicies.

y Policies definethebasicjob of eachdepartmentsand relationto otherdepartments


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THEMANUALThe manual:The policies are guidelines and procedures are code

of practice.The booklet containing the policies and practices are calledas manual. This manual has to be used and considered asholy guide.

y Advantages of manual:1. Manuals promote good interdepartmental relations .It

clarifies interdepartmental relations.2. Make supervision easier.3. Improve procedures ,and aid in training.4. Develop standard practices .Encouragesstandard practices.5. Without written policies and procedures ,each supervisor

would devise his own procedures6. Manual improve procedures .Manual can prevent sloppy

practices.7. New employees get guidance .They get their training and ishelpful for reference.

y Preparation of manual:Preparation of materials manual is long and tedious job.Manual is first written about what isbeing done .Then editedto what can be better. The whole processes takes a fewmonths and occasionally more then a year.


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yForecastofrequirements:Therequirementsofthecomponentsisthemainneed formaterials

department. Inmanufacturing organization, this

is donefromasalesforecast. Inanonprofit

organization, like hospitals, transportcompanies

theforecastis doneby trend linemethod.

y Budgetpreparation:Expensesthatareexpected in differentcategory oftheareasare

tobeforecasted. Revenueforecastand thebudgetcan have difference. All thatforecasted

cannotcomeinbudget. Thebudgetisthe

activitiesaccepted tobe done, thatarefitting in

theallowableexpensesofthecompany.


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y Developmentofpersonnel: Low profileemployeesshould be identified. They mustbeprovidedwith adequatetraining essentialareas. Training programsare usetomotivatetheemployeesby developing theskills.Specialtraining programs hastobe done.

yDevelopmentofmanagers:Jobrotation: somematerialsmanagers deliberately rotateJobs intheirdepartment.

Specialassignments: Thematerialmanageroften can usespecialassignmentstotesthissubordinates.

y Properrecords:Thematerialmanagercan achieveobjectivesimultaneously when he assign high potentialsubordinateto auditthe departmentsrecord.


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DECENTRALIZED& CENTRALIZED

MATERIALSMANAGEMENTy Introduction: It is required to have better

control on the total material activities in

a particular organization. When it issmallin itsbeginning phase it has compact

organization where all the functions of

material together are at one place. The

material department reports to the headof the operation , which can be general

manager as per organization system .the

material carets to the need of entire

organization.


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SMALL,SIMPLE

ORGANIZATION

President

General manager Finance

Materials

Personnel

Design

Sales

Manufacturing


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DECENTRALIZEDMATERIALS

MANAGEMENT

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Decentralized

organizationy Advantages:

1. Bringmanagerclosertoobjective.

2. Permittightercontrolof costs.3. Coordinationof purchasingactivity.

4. Providesabetterenvironmentfortraining

future manager.

5. Quick responseto useris possible.y Disadvantages:

1. Dilutedbuyingpower.

2. Vendorsgetdivided.

3. Specialalignedstaff forevery division.


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CENTRALIZEDORGANIZATIONy Advantages:

1. Bigbuyingpower is useful.

2. The coordination is Quick andeasy atcorporatelevel.

3. Specializedstaff for particular manufacturingprocesses.

4. The chief of the company is involved inthe

major decisions.y Disadvantages:

1. No belongingnessto the productof thematerials personnel.

2. Less coordination.

3. Brings organizational conflict.


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THECOMMONSERVICESINCOMBINATION

SETUP

y Chasers for follow up.

y

Cost reduction Methodology.y Administrative planning.

y Standardization, codification, etc.

y Uniform policy guidelines.

y

Economic analysis.y Computerization and Electronic Data

prcessing.


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Material ion

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