Scope and Definition of Material Management in Commerce
Explore the meaning, definition, and scope of material management in commerce, covering purchasing, production planning, packaging, customer service, and more. Understand the significance of scientific purchasing, production planning, and control in effective material handling. Discover the key activities involved in material management and their importance in optimizing resources for efficient operations.
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Presentation Transcript
Welcome to all for the PSK Online lecture By Dr. Dhiraj Ovhal HOD of Commerce
Q.1 :- Meaning, Definition and Explain the scope of Material management Meaning:- Material means all commodities are used for the production purpose. It consists of Raw Materials, factory supplies such as oil, grease, component parts, etc. These are collectively described as Store and normally stored in store room. (Commodities-RM,OIL,-STORE) The cost of raw materials ranges from 50% to 85% in the factory. 1/3 total assets of the company is in the form of material management. Sugar Industry- Sugarcane Petrol Industry Crude oil Raw material Raw material
Definition:- Peter Baily and David Farmer define The term material management is used for the group of activities concerned with getting purchased materials and service to the point where they are economically useful .
Scope of Material Management (Shortcut to remember ) P3 C2 M.....wrist ...qd 1) Purchasing 2) Production planning and control P3 3) Packing and Packaging 4) Customs C2 5) Customer service 6) Material handling M 7) Warehousing 8) Receiving 9) Insurance WRIST 10)Storing 11)Transport 12) Quality control QD 13)Disposal of Scrap and Surplus
1.Purchasing :- Scientific purchasing means To purchase Right material at right time at right source from right quality with right terms and conditions Principles or Objectives or "7 R"S 1. Right quality 2. Right quantity 3. Right Price 4. Right Place Q2 P2 T2 S 5. Right Time 6. Right Transport 7. Right Source
2. Production planning and control:- Material Management is focused on production planning system as per the demand created in market . It is systematic process to controlling material cost and control at the buying right material at right time
3. Packing and Packaging:- Packing means to protect /cover the products Packaging means not only protect or cover the products but also providing all information, easy to handle as well as doing the advertising to attract the attention of Audience
4. Customs :- Purchasing raw materials or essential input for the production purposes form outside countries . At the Dockyard or Airport , we have to pay custom duty Like :- Freight duty/ Customer Duty/ insurance / dockyard charges
5. Customer service:- Customers are the king of Market Without customers no one survive Provide goods & services as per the requirement of customers. Under the holistic approach of customers are the priority factors for all the business
6. Material handling:- There is proper system to moving material from One store to another / One dept. to another dept. There is techniques or equipments which are easy to movement or handling the material
7. Warehousing:- It is also called as Store room or Godown. The basic purpose of store material in the warehouse till demand create in the Market. It is created Time Utility
8. Receiving :- It is system to receive material and inspected . It is system to store material in warehouse and keep proper record
9. Insurance :- To cover the risk of materials during the transport To cover the risk of materials from Theft/ Stolen/ fire / spoilage/ other things
10. Storing :- It means store the material in warehouse after the proper inspection as per the purchase order It means to arrange materials as per the LIFO/FIFO methods as per the natures of materials. It is also record of quantities of materials available in the store
11. Transport :- It involves basic two cost of transport 1. Transport charges / cost 2. freight and octroi, Toll Charges/ miscellaneous expenses 3. Various Type of transport 4. Railway 5. Road Transport 6. Water Transport 7. Air transport
12. Quality control :- It is focused on to maintain the quality of raw materials so that final product quality is also best as per the requirement of customers
13. Disposal of Scrap and Surplus :- It is one of ancillary function of Material management Some of the amount or money recovered from selling Scrap and Surplus For example:- Sugarcane Sugar- Jaggery- Alcohol- Thermocol
Scope of Material Management (Shortcut to remember ) P3 C2 M.....wrist ...qd 1) Purchasing 2) Production planning and control P3 3) Packing and Packaging 4) Customs C2 5) Customer service 6) Material handling M 7) Warehousing 8) Receiving 9) Insurance WRIST 10)Storing 11)Transport 12) Quality control QD 13)Disposal of Scrap and Surplus
Attendance Link https://forms.gle/fQWRE7Zait7gc9GM8 (Mention date at last point)
Objectives of Material Management (Shortcut to remember ) (OM. EPIF) 1. Optimum stocking :- No under stocking and NO over stocking 2. Minimize wastage :- Save wastage, No theft or loss of materials 3. Economy in purchasing :- Buy material at lower price with better quality Raw materials 4.Proper quality :- better quality of R.M. with average price 5. Information system :- Data or Information available about stock of materials 6. Fixing Responsibility:- Assign duties and responsibility to the people
