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material management

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material management

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  1. Material maNAGEMENT Produced By: gayatri

  2. Introduction • Most manufacturing concerns spend more than 60% of the money they take in, for material. • This emphasizes the need for adequate material management and control because the small saving in materials can reduce the production cost and thus add to the profits. • Material management may be thought of as an integrated functioning at the different sections of a company dealing with the supply of materials and other related activities.

  3. Definition It is concerned with planning, organizing and controlling the flow of materials from their initial purchase through internal operations to the service point through distribution. OR Material management is the scientific technique concerned with Planning, Organizing and Control of flow of materials, from their initial purchase to destination.

  4. Function of material management • Material planning. • Procurement or purchasing of materials. • Receiving and warehousing. • Storage and store-administration. • Inventory control. • Standardization, simplification and value-analysis. • External transportation and material handling • Disposal of scrap surplus and obsolete material.

  5. Objective of material management • Maintain steady flow of material. • Achieve economy in terms of material. • Insure consistency of quality. • Reduction of inventory cost. • Conservation of the materials. • Minimized operational cost. • Improve competitive strength of the company.

  6. The Material cycle Design Stage Sourcing Stage Planning Production Ordering Process Receiving Process Inventory Control Final Stage

  7. Inventory Control • Inventory generally refers to the material in stock. It is also the idle resource of an enterprise. Inventories are those items which are either stocked for sale or they are in the WIP or they are in the form of raw materials.

  8. Types Of Inventories • Raw material inventories. • Bought out parts inventories. • WIP inventories. • Finished goods inventories. • Maintanence , Repair and operating store. • Tools inventories.

  9. Reasons for keeping Inventories • To stabilized production. • To take advantage of price discount. • To meet the demand during the replishment period. • To prevent loss of order. • To keep pace with changing market condition.

  10. Basic Principles of Material Management • Effective management and supervision it depends on managerial functions of Planning Organizing Staffing Directing Controlling Reporting Budgeting • Sound purchasing methods • Skillful and hard poised negotiations • Effective purchase system • Should be simple • Must not increase other costs • Simple inventory control programme

  11. Element Of Material Management • Demand estimation. • Identify the needed items. • Calculate from the trends in consumption during last 2 years. • Review with resource constraints.

  12. THANK YOU…….!!!

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