material flow
TRANSCRIPT
Managing Material Flow
TC/IS/2011/MS/118Logistic ManagementDepartment business and Management StudiesTrincomalee Campus
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.
‘’ Administration of raw materials, subassemblies, packaging material and in-process inventory ‘’
Material Management
Material Management Activities
Sourcing and obtaining materials
Introducing material in to the organization
Monitoring the status of materials
Anticipating material requirements
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
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
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
Forecasting Techniques
Demand forecast
Supply forecast
Price forecast
Long-term forecast
Midrange forecast
Short-term forecast
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 ‘’
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
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)
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.
• Improved inventory turn.
• Bettor customer service.
• Decreased warehouse space.
• Improved response time.
Benefits and Problem of JIT
• Production scheduling.
• Supplier production schedule.
• Supplier locations.
Material Requirements
Planning (MRP I)
‘’ Computer based production and inventory control system that attempts to minimize inventories while maintaining adequate material through production process ‘’
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.
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.
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’’.
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.
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. Ju
st-in
-tim
e (
JIT )
MRP
I , M
RP II
DRP
I , D
RP II
Total Quality Management