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Purpose of material management
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Ballot (2006) defines material management as the process of planning, acquiring, storing, moving, and controlling materials to effectively use facilities, personnel, resources and capital. Tersine and Campbell (1977) define material management as the process to provide the right materials at the right place at the right time in order to maintain a desired level of production at minimum cost. The purpose of material management is to control the flow of materials effectively. Beekman-Love (1978) states that a material management structure should be organized in such a way that it allows for integral planning and coordination of the flow of materials, in order to use the resources in an optimal way and to minimize costs.
Chandler (1978) states
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Cavinato (1984) states that material management involves the control of the flow of goods in a firm. It is the combination of purchasing with production, distribution, marketing, and finance. Arnold (1991) states that material management is a function responsible for planning and controlling of materials flow. He adds that a materials manager should maximize the use of resources of the …show more content…
The person in charge of handling materials should keep in mind the goals of the company and ensure that the company is not paying extra money for materials. The goal of every company is to make a profit. This is the basis for company survival, costs should not exceed income, but keeping in mind customer's expectations. Furthermore, Jacobs et al. (2009) stated that the objective of material management is to ensure that the right item is bought and made available to the manufacturing operations at the right time, at the right place and at the lowest possible cost.
The typical tasks associated with a material management system are (Tersine and
Campbell (2004), Ammer (1999), Stukhart (2007)): Procurement and purchasing, expediting, materials planning, materials handling, distribution, cost control, inventory management/ receiving/warehousing and
Cost management plays a major role when maintaining profit margins. Management must be able to find in which areas of a business costs must be reduced and the consequences that such reductions have in the overall company. In some situations management must change the way the work is being done in order to decrease costs while in other cases changing one supplier for another might be enough, in both situations a tradeoff will occur and the consequences will impact the company as a whole.
In today’s operational management arena, there are certain expectations from a managerial aspect that must be met in order to be successful. A comprehensive look at the Space Age Furniture Company will show exactly what the Materials Requirement Planning (MRP) calculations are for this company at present time and then take the information given in order to properly suggest ways to improve the sub-assemblies. In addition, there will be an analysis on the trade-offs between the overtime and inventory costs. A calculation will be made on the new MRP that will improve the base MRP. This paper will also compare and contrast the types of production processing to include the job shop, batch, repetitive, or continuous, and determine which the primary mode of operation should be and exactly why. A detailed description on how management can keep track of the job status and location during production will also be addressed. Finally, there will be a recommendation on they type of changes that need to occur that will be beneficial to the company and at the same time add value to the customer. This paper will conclude with summary of the major points.
The company has a very good inventory control system. After they are able to locate good quality suppliers that are able to meet the demand of the company, they then strive to maintain those relationships. They have systems in place to forecast their future needs and then have set out to be able to maintain a supply on-site so they can meet the demands and not run out of the product. They also need to make sure that they are able to store the materials so that they are able to maintain the quality that the company needs.
Without knowing the customer demand, the most serious consequence is caused by a large number of product waste. In the supply process, there is no clear division of labor and no clear target, resulting in waste of personnel, time waste, waste materials, unnecessary transportation, and excess inventory, leading to low-cost eventually.
“The Goal” is a book talking about challenges and problems that can face any plant manager. The story style used was very useful. I enjoyed the reading and gain more knowledge about the manufacturing operation. Many concepts and definitions were introduced such as the goal of any company and the its three measurements which are throughput, inventory and exponential expenses. Also, bottleneck and non-bottleneck resources.
After the purchasing on materials is made, then it turns to operation part which is transforming the raw material into finished food and services.
We need to create material master data for the different materials that is needed. The material master for the new product requires additional material that is not already in the system and they are:
Besides, an organisation can adopt a technique of activity-based costing (ABC) as an approach to support its sustainability objectives. ABC system is a technique of assigning overhead costs to products and services by identifying the cost drivers. ABC technique will first identify each activity cost that is involved in the process of production, then assign the cost to each product and service on the basis of each activity consumption in the production of each product and service (Drury, 2012, p. 253). ABC system is an effective method to account for costs of products and services. This is because ABC system allocates indirect costs based on a cause-and-effect relationship (Drury, 2012, p. 269). ABC system allocates overhead costs to cost
Lean manufacturing is an approach to manufacturing in which any resource spending that does not create value for the end customer is considered wasteful and should therefore be modified. Also this is considered “a theory that can help you to simplify and organize your working environment so that you can reduce waste, and keep your people, equipment, and workspace responsive to what’s needed right now.”( Lean Manufacturing) This explains how lean manufacturing can make the process of production more efficient. When it comes to lean manufacturing there are multiple principles that are apart of it. These Principles are the elimination of waste, continuous improvement, respect of humanity, levelized production, just-in-time production, and quality
Thus a management method that specifically meets your wants of a transforming organization is extremely much essential in addition to supply chain management requires businesses to examine every process in his or her supply chain and identify areas which have been using unnecessary resources that are measured in dollars, time or recyclables. This will improve the company's competitiveness in addition to improve the company's general profitability.
It deals with information flow or the flow of products and services. In short it is a relationship of operations and processes. One of the reasons for successes of Tata Motors was their excellent supply chain management. Their efficiency to quickly work with the suppliers in estimating the cost before their contenders is marvellous. In Nano’s case, they quickly estimated the price of the car with the suppliers. They first determined the functional requirements of all the Nano parts without even letting the public know about their intentions. Tata Motors use Ariba Spend Management as their SCM, which is a state of art cost calculating software. It has helped Tata Motors to reduce cost by helping them find new suppliers, rationalize its supply base and run on-time
The business is related to a manufacturing concern; therefore, the importance of enhancing manufacturing operations seems to increase. Manufacturing operations management is commonly known as MOM (Daft, Kendrick & Vershinina, 2010). Management of operations is basically a process which reviews the manufacturing or production process with an intention to maximize the production efficiency. Manufacturing operations management is thoroughly divided into many different arenas like production management, supply chain management, analysis of performance, quality and compliance and many others. Manufacturing operations management revolves around all the underlying production processes (Hills & Jones, 2009).
management means inventory management, receivables management, and payables management. With wider networking capital description current asset and current liability are managed.
Material handling system is an important equipment and in the design of an effective manufacturing design. One of the main tasks in material handling system design is the selection and setup involving apparatus, demanding comprehensive technical understanding along with methodical research. Material handling equipment selection is a very complex and tedious task. The main factors contributing to the complexity of the equipment selection problem is the constraints imposed by the facility and materials, a variety of disagreeing design and style requirements, anxiety inside functional environment, and some of equipment varieties in addition to designs accessible. In recent years, the equipment selection
...ction. Product development, service delivery, materials purchasing, product design, and manufacturing operations must all be included. I Auditors will look for continuous improvement in the system. These improvements can include better education of employees, better communication of ideas from and to employees, better reporting of environmental impacts within the company, and improved identification of environmental aspects. ISO 14000