Material flow
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This document discusses various aspects of material management including objectives, activities, forecasting techniques, and material management improvement systems. The key objectives of material management are low cost, high service levels, quality assurance and low levels of tied-up capital while supporting other functions. Material management involves purchasing, production control, logistics, warehousing, inventory planning and disposal. Improvement systems discussed include Just-in-Time (JIT), Material Requirements Planning (MRP I, MRP II), and Distribution Requirements Planning (DRP I, DRP II) which aim to minimize inventory while maintaining production through quantitative and quality focused approaches.
Material flow
- 1. Managing Material Flow TC/IS/2011/MS/118 Logistic Management Department business and Management Studies Trincomalee Campus
- 2. Objectives of the chapters… • To identify the material management and its aspect and activities. • To identify the major objectives of material management. • Forecasting . • Total Quality Management.(TQM) • Measurement of material management performance. • To identifying the Material Management Improvement System.
- 3. ‘’ Administration of raw materials, subassemblies, packaging material and in-process inventory ‘’ Material Management
- 5. Major Objectives of Material Management Company Objectives Objective of the material management Low cost High level of service Quality assurance Low level of tied-up cost Support of other functions
- 6. Aspect of Material Management Purchasing and procurement Production control Inbound logistics Warehousing and storage Management information system control Inventory planning and control Salvage and scrape disposal
- 7. Forecasting ‘’ Predict the future through quantitative or qualitative method or combination of both ‘’ - Customer satisfaction - Product efficiency - Superior negotiation - Pricing and promotion management - Stock out - Safety stock needs
- 9. Total Quality Management ‘’ Application of quantitative and Human resource to improve the material services supplied to an organization, all the process within the organization and the degree to which the needs of the customer are met ‘’
- 10. Measuring the Performance of Materials Management Service level Inventory level Price level of materials Order cycle time, fill rate, number of production delays Slow moving inventory, inventory turnover
- 11. Material Management Improvement System Kanban / Just-in-time ( JIT ) MRP system - MRP I (Material Requirement Planning ) - MRP II (Manufacturing Resource Planning) DRP system - DRP I (Distribution Requirements Planning ) - DRP II (Distribution Resource Planning)
- 12. Kanban / Just-in-time ( JIT ) ‘’ Production strategy that reduce manufacturing costs and to improve quality markedly by waste elimination and more effective use of existing company resources ‘’ JIT II concept Apply JIT concept to the purchasing function.
- 13. • Improved inventory turn. • Bettor customer service. • Decreased warehouse space. • Improved response time. Benefits and Problem of JIT • Production scheduling. • Supplier production schedule. • Supplier locations.
- 14. Material Requirements Planning (MRP I) ‘’ Computer based production and inventory control system that attempts to minimize inventories while maintaining adequate material through production process ‘’
- 15. Advantages and Disadvantages of MRP I • - Improved business results and manufacturing results. • Better manufacturing control. • More accurate and timely information. • Less inventory. • Optimize material acquisition cost. • Higher transportation bills and unit cost. • Delivery problem and material shortage. • Use of standard software package.
- 16. Advantages Manufacturing Resource Planning (MRP II) ‘’ Set of activities involved in planning and control of production operations ’’. • Inventory reduction. • Minimize workforce overtime. • Reduction in purchasing cost. • Improved consistency in customer delivery process.
- 17. Distribution Requirement Planning (DRP I) Distribution Resource Planning (DRP II) ‘’Extension of (DRP I) and drive distribution schedule , control bill of material ‘’. ‘’Application of MRP principals to distribution environment and integrate distribution needs’’.
- 18. Uses of DRP generated information • Coordinate the replenishment of SKU. • Select transportation modes, carriers, and shipment sizes. • Schedule shipping and receiving labour. • Develop a master production schedule for each SKU.
- 19. Summary … Material Management • Introducing • Anticipating • Sourcing and obtaining • Monitoring Objectives • Low cost. • High level of service. • Quality assurance. • Low level of tied up capital. • Support other function. Forecasting Aspect • Purchasing and procurement. • Production control. • Inbound traffic and transportation. • Ware housing and storage. • MIS control. • Inventory planning and control. • Salvage and scrap disposal. Just-in-time(JIT) MRPI,MRPII DRPI,DRPII Total Quality Management