material management-1.ppt

Q1: MATERIAL MANAGEMENT
 Q: Scope or functions of material
management
 Q: Need for production planning
and control
 Q: Phases of production planning
and control

SCOPE OF MATERIAL
MANAGEMENT
Introduction
 Its main objective is cost reduction and efficient
handling of materials at all stages and in all sections
of the undertaking. Its function includes several
important aspects connected with material, such as,
 purchasing,
 storage,
 inventory control,
 material handling and
 standardization etc.

DEFINITION
Definition of Material Management:
 Materials management is defined as “the
function responsible for the coordination
of planning, sourcing, purchasing,
moving, storing and controlling materials
in an optimum manner so as to provide a
pre-decided service to the customer at a
minimum cost”.

FUNCTIONS OF MM
 Material Planning and Control
 Purchasing
 Stores Management
 Inventory Control or Management
 Standardization
 Simplification
 Specifications
 Ergonomics (the study of people)
 Just-in-Time (JIT)

FUNCTIONS OF MM
 Materials planning and control:
It is based on the sales forecast and production plans. This
involves estimating the individual requirements of parts,
preparing materials budget, forecasting the levels of
inventories, scheduling the orders and monitoring the
performance in relation to production and sales.
 Purchasing:
This includes selection of sources of supply finalization in
terms of purchase, placement of purchase orders, follow-up,
maintenance of smooth relations with suppliers, approval of
payments to suppliers, evaluating and rating suppliers.

FUNCTIONS OF MM
 Stores management:
It involves physical control of materials, preservation of
stores, minimization of obsolescence and damage through
timely disposal and efficient handling, maintenance of stores
records, proper location and stocking. A store plays a vital
role in the operations of a company.
 Inventory control or management:
Inventory generally refers to the materials in stock. It is also
called the idle resource of an enterprise. Inventories represent
those items, which are either stocked for sale or they are in
the process of manufacturing or they are in the form of
materials, which are yet to be utilized.

FUNCTIONS OF MM
 3 S
 Standardization:
Standardization the process of making something conform to a
standard. It is the process of establishing standards by which
extent, quality, quantity, value; performance etc. may be
compared and measured.
 Simplification:
The process of making something simpler or easier to do or
understand.
Simplification is the process of reducing the variety of products
manufactured. Simplification is concerned with the reduction of
product range, assemblies, parts, materials and design.

FUNCTIONS OF MM
 Specifications:
It is an act of identifying something precisely. It
refers to a precise (exact) statement that makes the
requirements of the customer. It may relate to a
product, process or a service.
 Ergonomics (Human Engineering):
It is a science that deals with designing and arranging things
so that people can use them easily and safely. The study of
people's efficiency in their working environment.

Q2: WHAT IS PRODUCTION
PLANNING & CONTROL?
 Introduction:
 Production planning and control is a tool
available to the management to achieve the
stated objectives. Thus, a production system is
covered by the four factors. i.e.
 Quantity
 Quality,
 Cost and
 Time.

INTRODUCTION
 Production planning is one part of production planning
and control dealing with basic concepts of what to
produce, when to produce, how much to produce, etc. It
involves taking a long-term view at overall production
planning.
 Production planning starts with the analysis of the
given data, i.e., demand for products, delivery schedule
etc., and on the basis of the information available, a
scheme of utilization of firms resources like machines,
materials and men are worked out to obtain the target in
the most economical way.

DEFINITION (Production planning)
 Definition of production planning
Production planning “direction and
coordination of firms’ resources towards
attaining the prefixed goals
 Ray wild defines “Production planning is the
determination, acquisition and arrangement
of all facilities necessary for future
production of products.”

POINTS SHOW THE NEED FOR PRODUCTION
PLANNING
 Production planning needed to achieve:
 Organization can deliver a product in a timely and regular manner.
 Supplier are informed will in advance for the requirement of raw materials.
 It reduces investment in inventory.
 It reduces overall production cost by driving in efficiency.
 Effective utilization of firms’ resources.
 To achieve the production objectives with respect to quality, quantity, cost
and timeliness of delivery.
 To obtain the continuous production flow in order to meet customers varied
demand with respect to quality and committed delivery schedule.
 To help the company to supply good quality products to the customer on the
continuous basis at competitive rates.
 It ensures that inventory level are maintained at optimum levels at all time,
i.e. there is no over-stocking or under-stocking.

FACTORS AFFECT PRODUCTION
PLANNING
 Most of the time, it is not possible to achieve production 100
per cent as per the plan. There may be numerous factors
which affect the production system and because of which
there is a deviation from the actual plan.
Some of the factors that affect Production planning
& control are:
 Non-availability of materials (due to shortage, etc.)
 Plant, equipment and machine breakdown;
 Changes in demand and rush orders;
 Absenteeism of workers; and
 Lack of coordination and communication between various
functional areas of business.

Following are the objectives of production planning
1. Systematic planning of production activities to achieve the highest
efficiency in production of goods/services.
2. To organize the production facilities like machines, men, etc., to
achieve stated production objectives with respect to quantity and
quality time and cost.
3. Optimum scheduling of resources.
4. Coordinate with other departments relating to production to achieve
regular balanced and uninterrupted production flow.
5. To conform to delivery commitments.
6. Materials planning and control.
7. To be able to make adjustments due to changes in demand and rush
orders.
OBJECTIVES OF PRODUCTION PLANNING

Production planning takes care of two basic strategies’
product planning and process planning. Production
planning is done at three different time dependent
levels i.e. long-range planning dealing with facility
planning, capital investment, location planning, etc.;
medium-range planning deals with demand forecast
and capacity planning and lastly short term planning
dealing with day to day operations.
PRODUCTION PLANNING CRUX

PRODUCTION CONTROL
 If there is a deviation between actual production and
planned production, the control function comes into
action.
 Production control through control mechanism tries
to take corrective action to match the planned and
actual production.
 Production control reviews the progress of the work,
and takes corrective steps in order to ensure that
programmed production takes place.

OBJECTIVES OF PRODUCTION CONTROL
Production control looks to utilize different type of control
techniques to achieve optimum performance out of the
production system as to achieve overall production planning
targets. Therefore, objectives of production control are as
follows:
•Regulate inventory management
•Organize the production schedules
•Optimum utilization of resources and production process

Production control cannot be same across all the
organization. Production control is dependent upon the
following factors:
•Nature of production( job oriented, service oriented, etc.)
•Nature of operation
•Size of operation
FACTORS AFFECT PRODUCTION CONTROL

PRODUCTION CONTROL
 The essential steps in control activity
are:
 Initiating the production,
 Progressing, and
 Corrective action based upon the feedback and
reporting back to the production planning.

Production control is essential for
customer delight and overall
success of an organization.
PRODUCTION CONTROL CRUX

Q3: PHASES OF PRODUCTION
PLANNING AND CONTROL
 Production planning and control has three
phases namely:
 Planning Phase (A)
 Action Phase (B)
 Control Phase (C)

PLANNING PHASE
 Planning Phase
 Planning is an exercise of intelligent anticipation
in order to establish how an objective can be
achieved or a need fulfilled in circumstances,
which are always restrictive.
 Prior planning
 Active planning.

PLANNING PHASE
 Prior Planning
 Prior planning means pre-production planning. This
includes all the planning efforts, which are taking
place prior to the active planning.
 Modules of pre-planning
The modules of prior planning are as follows:
 1. Product development and design
 2. Forecasting
 3. Aggregate planning
 4. Material requirement planning

PLANNING PHASE
 ACTIVE PLANNING
 The modules of active planning are: Process planning and
routing, Materials planning. Tools planning, Loading,
Scheduling etc
 1. Process planning and routing (direction)
 2. A material planning
 3. Tools’ planning
 4. Loading is the process of assigning jobs to several machines such
that there is a load balance among the machines.
 5. Scheduling is the time phase of loading and determines when and
in what sequence the work will be carried out. This fixes the starting
as well as the finishing time for each job.

PLANNING PHASE
Action Phase
 Action phase has the major step of dispatching. Dispatching is the
transition from planning phase to action phase. In this phase, the
worker is ordered to start manufacturing the product.
dispatching are job order, store issue order, tool order, time ticket,
inspection order, move order etc.
 The job order number is the key item which is to be mentioned in all
other reports/orders.
 Stores issue order gives instruction to stores to issue materials for
manufacturing the product as per product specifications.
 The tool order instruct the tool room to issue necessary tools.
 Time ticket is nothing but a card which is designed to note down the
actual time taken at various processes.

PLANNING PHASE
Control Phase
 The control phase has the following two major modules:
 1. Progress reporting, and
 2. Corrective action.
 1. PROGRESS REPORTING
 In progress reporting, the data regarding what is happening with the job is
collected. Also, it helps to make comparison with the present level of
performance. The various data pertaining to materials rejection, process
variations, equipment failures, operator efficiency, operator absenteeism,
tool life, etc., are collected and analyzed for the purpose of progress
reporting.
 2. CORRECTIVE ACTION
 The tasks under corrective action primarily make provisions for an
unexpected event.

material management-1.ppt

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