Material Management Meaning Objectives Importance Functions of material

ØMaterial Management – Meaning ØObjectives ØImportance ØFunctions of material management ØPurchasing- Meaning ØObjectives ØPurchasing procedure ØStore keeping –Meaning ØObjectives ØFunctions Ø JIT

� Material management is the planning, directing, controlling and co-ordination of all those activities concerned with material and inventory requirements, from the point of their inception to their introduction into manufacturing process � According to N. K. Nair, “ it is the integrated functioning of the various sections of an organization dealing with the supply of materials and allied activities in order to achieve maximum co-ordination

Objectives of Materials Management v. Low prices v. High inventory turnover v. Low cost acquisition and possession v. Continuity of supply v. Consistency of quality v. Low payroll costs v. Favorable supplier relation v. Development of personnel v. Good records

Ø Planning Function Ø Production Control Ø Purchasing Ø Inventory and Stores Control Ø Receiving and Stores Ø Shipping Ø Material Handling Ø Traffic

Importance of Materials Management ü ü ü Regular supply of the material is ensured, reducing the chances of any interruption in production process Procurement costs and transportation cost associated with materials are checked Efficient store and stock control minimizes waste of material Inspection of material at the time of procurement minimizes the possibility of finished product being rejected by the consumer Timely supply of raw material and other inputs can be assured Better utilization of labor, capital and equipment

� Purchasing is the procuring of materials, supplies, machines, tools and services required for equipment, maintenance and operation of a manufacturing plan

Objectives of Purchasing Ø To avail Materials, Supplies and Equipment at the Minimum possible costs Ø Ensure continuous flow of production Ø Increase asset turnover Ø Develop alternate sources of supply Ø Establish and maintain good relations with suppliers Ø Achieve maximum integration with other departments of company Ø Train and develop the personnel Ø Efficient record-keeping and management reporting

v Purchase Requisitions v Potential sources of Supply v Issue of Letters Inviting Quotations v Receipt and Analysis of Quotations v Selection of Vendor v Purchase Order v Follow-up and Delivery v Purchase order Amendments v Analysis of receiving Reports v Forms used and records maintained in Purchasing v Scrutiny and approval of Invoices

� Storekeeping is a service to the production department. � It is responsible for proper storage of material and then issuing it to respective departments on proper requisition. � The various items such as raw materials, tools, work-in-process, spare parts, finished goods etc. are stored in the store room. � The custodian of stores is generally known as storekeeper. The place where these items are kept is known as storeroom

Objectives of Storekeeping Ø Minimizing cost of production through minimizing cost on materials Ø Maintaining the value of Material Ø Services to user Departments Ø Establishing co-ordination with other department Ø Advising materials manager

ü Receipt ü Storage ü Retrieval ü Issue ü Records ü Housekeeping ü Surplus stock ü Verification ü Co-ordination and co-operation

q Main or Centralized stores q Central store with sub-stores q Branch or Decentralized stores q Tool and miscellaneous q warehouses

� Just in time (JIT) is an inventory management method whereby materials, goods and labor are scheduled to arrive or replenished exactly when needed in the production process. � JIT inventory refers to an inventory management system with objectives of having inventory readily available to meet demand, but not to a point of excess where you must stockpile extra products.

Ø Zero inventory Ø Zero breakdowns Ø 100% on tine delivery service Ø Elimination of non-value added activities Ø Zero defects