Pen esc) Materials Management 1 Introduction : Materials management integrates all activities of planning, scheduling and controlling of i fom aes et through production, including delivery to the customer. Therefore, 9 sae ae wrion of planning, organising, integrating and measurin ¥ i es it establishes a single responsibility over the Titel fon BREE Sik satay of salty, delivery and cost. In an organization, material management requires constant balancing of ierelated objectives, which often need the sacrifice of one objective for achievement of another forexample, industries using scarce materials for the manufacture of some components and parts to peused in complex machines, availability in time dominates the cost factor. In aircraft and precision- insrument industries, consistency in quality and reliability is the sole criterion due to high complexity ofend-products. In many other industries, inventory turnover may be the turning point because they sock not only thousands of spares and parts that go to make a complicated machine, but also keep them ready for after-sale customer service. Therefore, a balance between stockouts and the bull inventory is the single most objective of materials management. 12 Definition of Materials Management The International Federation of Purchasing and Materials Management accepted the definition as a ‘aalconcept involving an organizational structure unifying into a single responsibility forthe systematic {aw ang control material from identification of the need through customer delivery’. According to National Association of Purchasing Management, USA: ‘an organizational concept inwhich a single manager has authority and responsibility of all activities concerned with the flow of materials into an organization’. Another definition is ‘management function primaril \se of materials needed, flow of goods and services connec 73 Objectives and Functions of Materials Mana 131 Objectives : : Materials management objectives may be broadly divided into three cafezoncs: + Primary objectives. + Secondary obferives * Corporate objectives. , tts The rina obj include purchasing, stores and inventory management, continuity of "ly, quliy of sete sle goed wanpiee ream e z but different organizations put Secondan-aleee hhieve the primary objectives, en u cag Seiny ecives ep EE Tete mney ess, ae nl and value engineering, ‘standardization, product development and new product. demand and "quirements fe forecasting. jizati Corporate objectives include achievement of organizati objectives in corrective action, ifany, 157 ly concerned with the acquisition, control, ted with production processes’. gement ion’s objectives and targets, actual required on the basis of feedback. Performance figures, data and statistics,(amare Te following ae the main steps ino Classen of ters a Purchasing te ens om 2 diners bth le sorearm a a “Master ProdutonSebeule ‘MPS a is of ems, nding ed ot gineering so be produced. I consists of tem ribs on acura szenbly sate sbeebs Pan roc with aubauseies ra ar plenatin of MRE “Thee ae follwing cpr steps of sees implementation of MRP: Bucking ‘TnMPS, cs koown he ished product equi time of equiement, an stan wth cooling ach pried equemet fr ile Hshed products a eee = Feira Sierra te eae ean ees SSeee een a5 an ct het li ttn ae oo eae ata an a ‘Thea following fve OU of MRP: “4 poset ove Snide) a “his contin the quant of each mel oeeat ad ay Ia to uk proses tino ead nest fle willbe aed Incr in BoM sre |e Change in desen | pein foment sin wot ior ering aw opnionl itensive approach of MRP cases allureraicering is Managemen ing nt cool n MRP seis shown Fig, 73,ruiceing “ inc rexpncet em een Soi og ey RE arco Te co wm in mT, ote cre porns wos mere ei i eae poe eins ih he le rsp wih hole oe en pre ey bbe, SESH @ a ni 3 ed : nk all ems, ie specication changes and production o err i ected Fae cms i pt reprint nig insurance, nd the administrative variable cost. The right pee simply means the nt ed pice (ge common), et lor (n Seine imi 0 cst) | eects Pe (0 oo)5.Carying lig son et of Son cnet, es len ‘Sone Their etl ayeaso Conyac = P=? sce stevens ttf rey el perenne pereng of TRS ASTTET apes ote) foi ne nk per in, «Seren oe: eine prt ee rues mma ose nd permet and associated Joss of profit through future sales. ey2:08 59 Ps nton05 20-8689. si = = 155) nd ecameoning enn a To 2066, (irae 4 err, bp tenn oe quot company cn sve< cami =Teromox oon 10.47 paper oes (POX) (6) Legh ofeach a sie rodon aoe you 120 4a sane ed pa 11008 ih asad it tyne tesa Perea ireneestspa paenr ain testis pcre : aces ortega ‘alin D tase ain, Stipe eich ie ¢ Comosone ete, nas cones el a Z het OF 4 ap (e712 ol = 50(6)+ 1845 122) noL = Bxit+Zay Vit wre 2 nanan dvs eed oe eed seve ar oa i cere remained of demandes an Seen eats dey ton tr comiave dren Tet ‘Sty soc Macungie fora Servic level (Average demand during ead tie) bebe -Dit = DIET “where Dg = svar demand rate prt tne, ‘Wits n dom, al te ceca handedly squad owing te ean ora fiero a tine Sates = (enti 8 fa gen evi ee) (Ave reer CR ten Es Sr) Re ry pe in ee 7 ane paeniemlnanats pdarime cot ofnanng een mini [Seco mie 1 prc, bowers, he pro i revew tener 0 a IS be plaedat atime. “Target Imentry (Sel Level ‘Ate en each review eid an™ when the it pri changed RS 9° 0g) = 25/2005 219 is ‘Minium variable cost 14 {SM =n? eres Tao0.5=12.007 Teer, tect S = 07 +1200 ie sent = nen, 107-5749 ence, the eres in cost | 285636. n store 1s 0 per whe, Deermie very siya (A reed pit, Soto. Pom the gvenRes nnn erm om ve 1% “Tee mechanics ofARC amas ive in flowing EP: ‘Sep 1 Obtain if ta along wit nforato om ei unt costan same) cosungton ‘Step: Detmine the anna sige value fect by mpg of nits ed rank te descending oder on he basis el rset us ‘Step 3 Exess he vale fr each tem a pretage ofthe EBFERE Usage culate he per eet of sau wsage aoe "Aer clusion of ens, ventory decisions are made on the aug ems eal fra it conta aed shoal be delivered ear the ‘kms may be pin open storage and ised witout Ferma, With poy shoul eo ay ight contol —tbogh not as sri as or, Aion 0A ae fennel ogee eg ao Srre niente ie. * “4 “The tal invent cot per annum given by "TC ~Carying con + Ondeing. Semgalegegeeeee® (2 as en nth deeeding order cerding heslampeaen alco10 HM Antes ‘hiss silat ABC analyse withbe ference thn te tems ae clase on he “ther than the sage yale, The ens are classified ‘Need, low. This sais is sft or een ‘eparmentl evel stich mig be avaiable in ‘aly aval ens, posi om he eal markt, GOLF Anais ‘This anys wel for procurement satis andi the min source of ovement O represents ordinary, loeal and F frig sources,wm reconting or nomatin sem eriteton Sten ‘Av eat guos ad effet enifcaton system sth ft respnsiliy of stores ‘Stora cer itera comuniion. Tus hers aneedto develop proper “yuemn coordinate ats prc, nein cooled stores departments ‘iegatn ofthe epraone of esi ening. prodocton an cos scauning, T eatin of rsa be Gone in anyon oe loving ays “Ariraryapreach: Ts inverter pvenariray mbes inthe tee raed ese cr Herecach en esa dete uber but there ‘sony been th mambo signed elated ens. * Symi rent sna pera dsc 0. ‘Stmpoe arte anima of 10 genet! cass, 100 genre eases, 100 ‘ek gener lt 10D spi ems enh ls he in ‘Segre mor cipt nes beaded in catego& Aso ledger in cadre dial no “hi edger may Be antsined by he tera suing = ‘eid und ied andthe ulin nthe tok tone stem ise canbe fo Kins o comming eios ed owse ‘Soetoro pdnctnparunes Bucn Sore nich ral qty ob nd Lampert mart Any uy sed ved aon the Wor ne trem tae mag sepa ‘Asp of ata ean Gr rd epee cose mgt 79. Ms esi om sccouing ton Fr ring aden inthe sore lee One copy ofthe work comin he ow of mand esting bin Fr cosing ning tls cs ced os oe oar | al epdrnage of saat Be FIFO sytem Nengenent‘beyer sodng a pi [tee pelo ote ‘ro fr coterie or “hemi advannges of i yen a { Taechadown of pla once rack cecingtahings (a) Tesyensescatherone etiing ad mae aca, Te mth ip Dacepncis and ein treed dtd ad otc ana oes ee (Sow moving Sek nbd nd proper remedial action GO htemeatced canbe keihin iis. reaches uo eve SAL Astomated Storage Retrievalie og 1. Peon nrests 9, Caclessness and neplet 10; Lack indvol esponsiity No sequined with aes teenolgial development 12. Resistance o adopt automation and computerization 13, Wronllaitdown desig standards " 1, Lack of standardization ad eoifeation 15, Wrong hoc from materi 16. igor of invent cool 17. appropriate storage faites 18 Poor hunting materi 19, Poor ay ofits 2 Lckefmetiaon dino fae aa (© Transferring he surplus fom ane department the othe (@ Sting ep a tera ts {Selig heseraplsurpus to export agencies dealing wit is (Sling a og ese a ai |) Selling the surplus inthe open markt or tothe employees itself (0 Cosi vedas and reteng he saps Yeon (0 nese of ngs espe singe pas ar casing hem or recaimabl, ao 3; | ian titie fin oft wave rtd eed heya, Ta ups orrened ner tosses bun te poss was EME ewe ol wae erated Wis ele ie ce mt way ay meds ra oft ws be pond oi ‘input to the system. Then mews 7 be the wast inex of rb eource ad ‘Samberg sd itn cis) of th reoure te1 00 mab hoe compe arrest y man spins Deyowane wh ar en st a 2 Eph nen ct ne 2 Whats ye ADC csi” Haw a,co EAE Bande oragcon wpe covet ore ‘Seldon {tact wns dy nr ypc ie 13 es anf ik poi nnan veg ore | 1 Big sicy ABC os yi ‘SABC Ea ee | Pape ABC aking a sain ADE cane me eal gs On ee ns nee na+ 15% of 95 =Rs 3.425 ‘ Tc =12,000%9.5 + 0003 405-+ Bagg x15 = Rs Li7sis ‘When company orders 5,000 units or more, it gets « concession of 7% on the purchase price G re = 10x93 +30 33951200015 =Rs 120,123.50 att where Q* = 2,000, the 7 here is less than the TC when O* = 00 es 0 coneession on purchase price. “17, D=24,000 nits, Cy = Rs 22.5; Cy = 54% OF 1.25 = Re 0.0675 * = 4,000 units and 7C = Rs 30,270 “When working days are 300; L7™= 12 days and B = 400/ units, ROP =B+Dx1T Z = 400 + 4:000 12 «1,360 units, ve : : oe orotic . | MevsensinofSperemonci gn, omeemnnnit