Materials Management: Objectives, Functions, Importance & Purchasing

UNIT V Material Management Meaning Objectives Importance Functions of material management Purchasing- Meaning Objectives Purchasing procedure Store keeping Meaning Objectives Functions JIT

MATERIAL MANAGEMENT- MEANING management directing, controlling and co-ordination of all those activities concerned with material and inventory requirements, from the point of their inception to their manufacturing process According to N.K. Nair, it is the integrated functioning of the various sections of an organization dealing materials and allied activities in order to achieve maximum co-ordination Material is the planning, introduction into with the supply of

Objectives of Materials Management Low prices High inventory turnover Low cost acquisition and possession Continuity of supply Consistency of quality Low payroll costs Favorable supplier relation Development of personnel Good records

FUNCTIONS OF MATERIALS MANAGEMENT Planning Function Production Control Purchasing Inventory and Stores Control Receiving and Stores Shipping Material Handling Traffic

Importance of Materials Management Regular supply of the material is ensured, reducing the chances of any interruption in production process Procurement costs and transportation cost associated with materials are checked Efficient store and stock control minimizes waste of material Inspection of material at the time of procurement minimizes the possibility of finished product being rejected by the consumer Timely supply of raw material and other inputs can be assured Better utilization of labor, capital and equipment

PURCHASING - MEANING Purchasing is the procuring of materials, supplies, machines, tools and services required for equipment, maintenance and operation of a manufacturing plan

To avail Materials, Supplies and Equipment at the Minimum possible costs Ensure continuous flow of production Increase asset turnover Develop alternate sources of supply Establish and maintain good relations with suppliers Achieve maximum integration departments of company Train and develop the personnel Efficient record-keeping and management reporting with other

PURCHASING PROCEDURE Purchase Requisitions Potential sources of Supply Issue of Letters Inviting Quotations Receipt andAnalysis of Quotations Selection of Vendor Purchase Order Follow-up and Delivery Purchase orderAmendments Analysis of receiving Reports Forms used and records maintained in Purchasing Scrutiny and approval of Invoices

STORE KEEPING- MEANING Storekeeping is a service to the production department. It is responsible for proper storage of material and then issuing it to respective departments on proper requisition. The various items such as raw materials, tools, work-in-process, spare parts, finished goods etc. are stored in the store room. The custodian of stores is generally known as storekeeper. The place where these items are kept is known as storeroom

Minimizing cost of production through minimizing cost on materials Maintaining the value of Material Services to user Departments Establishing co-ordination with other department Advising materials manager

FUNCTIONS OF STOREKEEPING Receipt Storage Retrieval Issue Records Housekeeping Surplus stock Verification Co-ordination and co-operation

TYPES OF STORE KEEPING/STORES Main or Centralized stores Central store with sub-stores Branch or Decentralized stores Tool and miscellaneous warehouses

JIT- MEANING Just in time (JIT) is an inventory management method whereby materials, goods and labor are scheduled to arrive or replenished exactly when needed in the production process. JIT inventory refers management system with objectives of having inventory readily available to meet demand, but not to a point of excess where you must stockpile extra products. to an inventory

OBJECTIVES OF JIT Zero inventory Zero breakdowns 100% on tine delivery service Elimination of non-value added activities Zero defects