Materials Management Objectives n Materials Planning n Inventory

Materials Management Objectives n Materials Planning n Inventory Control n Just-in-Time (JIT) Management n

Objectives § § § Material Selection. Low Operating Cost. Receiving & Controlling Material Safely. Issue Material upon Receipt of Appropriate Authority. Identification of Surplus Stock & Measurements to Reduce it.

Advantages § § § Regular Uninterrupted Supply of Raw Materials. Providing Economy in Purchasing & Minimising Waste. Minimises Storage & Stock Control Costs. Minimises Cost of Production. Purchase the Best Product at Least Price.

Materials Planning § § § Estimating the individual requirements of parts. Preparing material budget Forecasting the level of inventories. Scheduling the orders. Monitoring the performance in relation to production and sales.

Inventory Control § § § Stock of Idle Resource in a Firm for Future Use. Essential in Providing Flexibility in Operating a Manufacturing System. Maintained by Organisations to Avoid Stock Out of an Item.

Inventory Control Classification § § § Raw Materials - Removes Dependency Between Suppliers and Plants. Work-in-Process (WIP) - Removes Dependency between Machines of a Product Line. Finished Goods - Removes Dependency between Plant and Customer.

Inventory Control Functions § § § Smoothing out Irregularities in Supply. Minimises Production Cost. Deals with Effective Utilization of Perishable Goods. Protects against Price Increases and Take Advantage of Quantity Discounts. To Satisfy Periods of Seasonal High Demands.

Inventory Control Models § § Purchase Model with Instantaneous Replenishment and without Shortages. Manufacturing Model without Shortages. Purchase Model with Instantaneous Replenishment and with Shortages. Manufacturing Model with Shortages.

Just-in-Time (JIT) § § § Extensively used by Toyota. Defined by Schonberger in 1982. It is also Called Lean Production.

JIT - Definition § § § Produce & Deliver Finished Goods Justin-Time to be sold. Sub-Assemblies Just-in-Time to be Assembled into Finished Goods. Purchase Materials Just-in-Time to be Transformed into Fabricated Parts.

JIT - Techniques § § Factory Layout Revision. Setup Time Reduction. Pull System Implementation. Better Co-ordination with Suppliers.

What Next? Material Requirement Planning (MRP). n Purchase Management. n Materials Planning & Budgeting. n