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MMEIM 106.3

INTEGRATED MATERIALS MANAGEMNT

Module 1:-Introduction, scope of materials management, primary and secondary objectives, integratedmaterials management, r elation with other functional areas of organization.

rganizing for materials management, basis for forming organizations, conventional and modern

approaches to organizing materials management

Materials management is the process by which an organisation is supplied with the goods andservices that it needs to achieve its objectives of buying, storing and movement of materials.Its related to planning procuring storing and providing the appropriate materials of right quality,quantity, and price and at the right time.The main areas in materials management are materials requirement planning, purchasing, storing,inventory control, materials supply, transportation and materials handling.Materials management became so important because of cut throat competition, variety of materialsand scarcity of materials.

Brief history:-Scarcity of materials during !"evelopment of principles of scientific management"evelopment in the field of materials purchase and supply by #harles baggage from !$%&s'rowth of railroad industry in !$(&s"evelopments in the field of procuring, receiving, inventory control and supply during )*alue analysis tech by '+ during post )greement between countries with an objective to solve material problems in planning, inventorycontrol, quality control, stores control, and surplus disposal.fter )&&& , emphasis on improvement of quality, supplier relationship, more cooperative approach,

long term strategies of cost mgmt, database materials management system

Obe!ti"es:-the objectives of materials management can be classified in two ways

-rimary objectives/+fficient materials planning-urchasing-rocuring and receivingStoring and inventory controlSupply and distribution of materials0uality assurance'ood supplier and customer relation

Improved departmental efficiencySecondary objectives/

+fficient schedulingMa1e or buy decisionSpecification and standardi2ation of materialsssist product design and development3orecast demand and materials quantity*alue analysis and engg

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"eveloping wor1er s1ills in materials management+nsuring smooth flow of materials in and out of organisation

3or these objectives to be fulfilled, its necessary to have a good harmony and coordination betweenall employees within and between departments.The basic objectives of mgmt in any organisation are

Increase sales, profit ma4imi2ation, improved customer services, product globali2ation, goodemployee employer relationship, reduction in cost and social objectives

#$%!tio%s:-the functions are also classified into primary and secondary-rimary functions/

1. Materials 5equirements -lanning 6M5-72. -urchasing/3. scertaining and maintaining the flow and supply of materials4. Inventory -lanning and #ontrol5. 0uality #ontrol of Materials6. "epartmental +fficiency

M&teri&'s Re($ire)e%ts *'&%%i%+ ,MR*--lanning of materials requirements is an importantfunction as inventory of materials involve about (&8 of the total investment. -rofit depends on theeffective utili2ation of these materials and reducing the inventory of the materials.it is not absolutelypossible to 1eep no inventories.9atest technique used is called :ust in Time 6:IT7. The M5- is atechnique used to plan, procure or produce the materials 6raw materials, finished parts,components, sub/assemblies and assemblies7 as per ;ill of Materials 6;

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Some of the 5M and manuf parts are sent to the stores as inventories, rest is sent for production.Similarly some of the finished goods are also sent to the stores as 3' inventory to meet thefluctuating demand and regulari2e the supplies 6buffer stoc17As!ert&i%i%+ &% )&i%t&i%i%+ the f'o &% s$'y of )&teri&'s-"istribution of materials to variousproduction centers must be determined and its flow and continuity of supply must be maintained.Insufficient or 2ero inventories, 3ailure of materials handling "evices, ?ncertainty in demand andproduction quantity are the main factors responsible for the disruption of materials supplies.2$&'ity /o%tro' of M&teri&'s/quality of the product manufactured by the organi2ation depends uponthe quality of the materials used. -erformance, reliability, interchangeability, consumer satisfaction,cost, vendors selection, buyers and suppliers relationships depends on the quality of materialsDe&rt)e%t&' Effi!ie%!y-the objectives can be fulfilled only if the system and procedures adoptedfor materials management are sufficient and effective. "epartmental control is necessary to maintainthings in a proper order as planned. MIS and feedbac1 control at every stage is necessary to achievebest results.Secondary functions/

1. Standardi2ation and Simplification2. "esign and "evelopment of the -roduct

3. Ma1e and ;uy "ecisions4. #oding and #lassification of Materials5. 3orecasting and -lanning

S!oe of M&teri&'s M&%&+e)e%t-ith respect to the various functions, the materials management coordinates various dept of manufconcerns.

s stated about (&8 of total investment is associated by inventories and as soon as thematerials is purchased and brought, its value goes on increasing 6ordering cost, inventorycarrying cost, maintenance, storing, handling etc7.

#ost reduction through some effective and efficient materials management technique is

necessary. "efinite procedure and system to ensure proper quality, quantity and time.

+nsure continuous flow with changing demand and production

I%te+r&te M&teri&'s M&%&+e)e%tIMM can be considered as a coordinated approach responsible for procurement, purchasingmaterials management, logistics and warehousing of all types of materials using most efficient andeffective technological process, methods and ideas.Integrated setup ensures mangers to have a good control and proper coordination of variousobjectives and also proper balance of any conflicting objectivesMaterials management involves handling a vast amt of data and integration helps rapid transfer and

processing of these data through effective communication channels.Integration ensures timely determination of materials requirement and its purchasing procedures,centrali2ation of authority, coordination of all materials management functions speedy and accuratedecision ma1ing, data analysis through +"- and effective use of computers and I#T andopportunities for future growth.

A"&%t&+es of IMM;etter accountability, coordination, performance, adaptability, morale and team spirit

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M&teri&'s M&%&+e)e%t Or+&%i&tio%Seven main resources required to run any organi2ation are management, materials, money, manpower, machines, methods and matri4 6infrastructure7The structure of the organi2ation must be such so as to have the efficient management of materialscontrolling its flow, conservation and utili2ation.

5elation of materials management with other departments

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2)

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Tot&' !o%!et: -

Today materials management is required to manage resources in a wider conte4t.Technological changes and advancement of raw materials have created the need of a new

information system. Aow materials management is required to predict the future needs with

reasonable accuracy using these new information systems. Increasing prices, increasing difficulties in

the availability of materials, timely supply, quality, s1ill and attitude of wor1ers are every managers

nightmare. Increasing productivity is also tied up with basic fundamentals of materials management

function. To discharge these responsibilities with a more economical and social consciousness

materials management will have to switch over to a new concept C This is Total materials

management or total concept. The -rinciple of total concept is to provide effectiveness to all

functions starting from planning till the finished product stage.

Syste) &ro&!h to )&teri&'s )&%&+e)e%t

System is any group of inter related parts which functions together to achieve some goals

System C subsystem

The = distinct and essential ingredients of a system are I%$t- *ro!ess 4 o$t$t -/o%tro's ,#eeb&!5

Materials management is an integrated system which emphasi2es specific function and its relation

with others. @ence its system oriented and dynamic.

In order to understand a system approach of materials management, we must first understand

management. Management is a social s1ill and the responsibly guiding and supervising % entities

1) -eople their s1ills

2) System, -rocedure D methods

3) -hysical materials D equipment

;eing a Social entity, small number of essential functional elements account for a variety of activities

which they integrate effectively and efficiently and moves in unison towards a common goal.

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Movement controls D information requirement are spread across many functional activities.

Integration is necessary for the following controls functions

1) Material quantity controls at each stage

2) Material movement controls for effective allocation, location to flow

3) Materials quality control for quality standards and ma4imum product service

4)

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Speed at which material come in D go out of states 6 annual sales F

avg monthly stoc1 7

5) 'ood vendor C vendee relations/

+nsures improved materials acquisition and delivery performance

6)