Abstract:
The efficient material management is important for any industry.The need for material management inany manufacturing industry plays a major role in production process.This paper aims to describe the roles and tools of material management for manufacturing sector.The tools are currently being used in many industries.The various barriers to implementation of materials associated with any manufacturing industry is highlighted.The poor handling of materials may cause serious drawbacks for any industries.
Keywords:Material management,Manufacturingindustry,tools and technique.
OBJECTIVE OF THE STUDY
1. To study the various tools of material management
2.to identify strategic framework for small scale industry
INTRODUCTION
Material is a vital component for any industry.It involves a part of companys cost.The smooth flow of materials upto company warehouse doesn’t delay the work at factoty.A proper planning of material is very much needed for any company to meet the supply and demand in the market.As material management involves cost,effective material management can reduce companys cost associated with materials.Material management ensures the success of an organization by proper adjusting the items needed.
The following are the raw materials for manufacturing environment
1.Raw materials
These type of materials are purchased items and ready for processing
2.Work-in-process(WIP)
These materials are under process and not final item
3.Purchased parts
Parts that a company may buy from supplier
4.Finished goods.
The complete product that are ready for sell in the market.
5.MRO(Maintenance,repair and operational supplies)
Items which can be used in production process and are not finish product
Functions of inventory
The following are the main functions material management
Material planning
This is planning of material according to the requirement of production.
Scheduling
This refers to lead time of delivery of products
Warehouse and material Handling
This involves handling of both raw materials and finish product
Stores Management
This requires management of stores .
Procedures and policies
The main objectives of inventory management are
Better customer service
Operation at very minimal cost
Invest very low at inventory
For a company to use best strategy with regard to inventory strategy,a company has to focused on major associated cost
1.Item cost
2.Carrying cost
3.Ordering cost
4.Stockout cost
5.Capacity associated cost
The following are best four methods to evaluate inventory
FIFO(first in first out)
Last in first out(LIFO)
Average Cost
Standard Cost
Challenges of material management
The company may face stiff challenge if proper planning is not done.
Roles of material manager
The manager has to plan for materials and check if any shortage has occurred in the plan.he has to control the material problems
The material manager is responsible for procurement of material and selecting the right raw material at right time.
The material manager is held responsible for storing materials and maintain the stock records in the factory.
The material manager is also responsible for production control and distribution of finished goods to warehouse and to final customers.
Material manager has to have co-ordination with functional department of the industry.
IMPORTANCE OF MATERIAL MANAGEMENT TO MANUFACTURING INDUSTRY
Material management is an important factor to industry.Improper planning of materials can be complex problem for any industry.
The poorly managed inventory records can cause a serious problems for any industry.Material management keeps inventory accurate for the industries.The fluctuation in prices of items can be managed by material management.sometimes the prices rises overnight.The important function of material management is to check smooth flow of raw materials into the production process without shortage of materials.It increases efficiency of workers,reduces material obsolescence ,better records and control and improves quality of the product.
COMPONENTS OF MATERIAL MANAGEMENT
The components of material management are
Inventory management
Supplier relationship management
Purchase and contract management
Supply chain and logistics management
Stores management
Fig: Components of material management
Tools for material manager
1.ABC analysis
2.Statistical quality control
3.Inventory control Technique
CHALLENGES OF MATERIAL MANAGER
Any manager will find it difficult to manage smooth flow of materials into the operations parts.The issues relating to the problem can be a complex one.The following are the issues relating to material manager are
Large number of scraps and not done at regular time
Shipping errors to the final customers.
Unable to maintain production reports
Making mistakes while receiving raw materials.
Errors in automated handling of materials
Not updating inventory records and failing to order inventory.
Limitation of automated system
A company has to invest heavily
Need additional staff
Need more space
Training of staff to use automates system which incur cost
No flexibility
Purchasing is an important function of material management.The elements of purchasing are
a. right quality
b. right quantity
c.right price
d. right time
e.right source.
The process of purchasing are:
a.materials requisitions from various departments
b.If the material is of priority to the department
c.Formulate policy and procedures for purchasi
d. Identify various supplier
e.Identify the source of supply
f.Issue of tender based on requirement
.PurchAse material with low cost
h.Delivery at right time
i.Inspect the materials before storing at factory
j.Payments of materials to the vendor
Benefits of effective purchasing are:
1. improvement in quality of materials delivery
2. Performance of quality of product
3. short production cycle
4. continuous improvement of quality
5. Building trust between buyer and supplier
CONCLUSION:
This paper has highlighted the mandatory requirement and role for material managers in the dynamic business environment. Without proper planning, there can be haphazard and disruption in the production process.Firm has to build on strategy to manage materials and uninteruption flow of materials in the production process.Further there are scope of future value addition in the material management areas.
1. J.R. Arnold,S.N. Chapman, “Introduction to Materials Management”,5thed., New Jersey: Prentice-Hall, 2004.
2. D.U. Kini “The material management is key to successful project management”, journal of
management in engineering/January/February 1999
3. Kasim N.B., Anumba C.J. and Dainty A.R.J., “Imroving Material Management Practices on Fast Track Moving Construction Projects”, 21st Annual ARCOM Conference, September-2005, 793-802
4. Ramakrishna, R. V. 2005. Materials Management -Profit Centre. Indian Institute of Materials Management Knoelwdge Bank
5.. D.U. Kini “The material management is key to successful project management”,journal of
management in engineering/January/February 1999
6. L.C. Bell, G. Stukhart “Attributes of material management systems”, ASCE, Vol.112, No. 1, March
1986
7. Ramakrishna, R.V. (2005). Materials Management – profit centre. Indian Institute of Materials Management Knowledge Bank.
8 . Leenders, M(1992). Purchasing and Material Management (9th Edition), New Delhi: Universal Book publishers.
9. Taiwo O. A, Claudius J. A, and James M. U, (2012) “materials management: an effective tool for optimizing profitability in the Nigerian food and beverage manufacturing industry” Journal of Emerging Trends in Economics and Management Sciences, 3 (1), 25-31
10. Chase, R.B., Jacobs, F.R. and Aquilano, N.J., Operations Management for Competitive Advantage, 10th ed., McGraw-Hill/Irwin, New York, 2004.
11. Wallin, C., Rungtusanatham M. J., and Rabinovich, E., What is the “right” inventory management approach for a purchased item? International Journal of Operations & Production Management, vol. 26, no. 1, pp. 50-68, 2006. Kros, J. F.,
12. Lemu T (2007). The Role of Materials Management in Economic Development, Lagos: Zenith Publications.
http://ispatguru.com/materials-management/
The efficient material management is important for any industry.The need for material management inany manufacturing industry plays a major role in production process.This paper aims to describe the roles and tools of material management for manufacturing sector.The tools are currently being used in many industries.The various barriers to implementation of materials associated with any manufacturing industry is highlighted.The poor handling of materials may cause serious drawbacks for any industries.
Keywords:Material management,Manufacturingindustry,tools and technique.
OBJECTIVE OF THE STUDY
1. To study the various tools of material management
2.to identify strategic framework for small scale industry
INTRODUCTION
Material is a vital component for any industry.It involves a part of companys cost.The smooth flow of materials upto company warehouse doesn’t delay the work at factoty.A proper planning of material is very much needed for any company to meet the supply and demand in the market.As material management involves cost,effective material management can reduce companys cost associated with materials.Material management ensures the success of an organization by proper adjusting the items needed.
The following are the raw materials for manufacturing environment
1.Raw materials
These type of materials are purchased items and ready for processing
2.Work-in-process(WIP)
These materials are under process and not final item
3.Purchased parts
Parts that a company may buy from supplier
4.Finished goods.
The complete product that are ready for sell in the market.
5.MRO(Maintenance,repair and operational supplies)
Items which can be used in production process and are not finish product
Functions of inventory
The following are the main functions material management
Material planning
This is planning of material according to the requirement of production.
Scheduling
This refers to lead time of delivery of products
Warehouse and material Handling
This involves handling of both raw materials and finish product
Stores Management
This requires management of stores .
Procedures and policies
The main objectives of inventory management are
Better customer service
Operation at very minimal cost
Invest very low at inventory
For a company to use best strategy with regard to inventory strategy,a company has to focused on major associated cost
1.Item cost
2.Carrying cost
3.Ordering cost
4.Stockout cost
5.Capacity associated cost
The following are best four methods to evaluate inventory
FIFO(first in first out)
Last in first out(LIFO)
Average Cost
Standard Cost
Challenges of material management
The company may face stiff challenge if proper planning is not done.
Roles of material manager
The manager has to plan for materials and check if any shortage has occurred in the plan.he has to control the material problems
The material manager is responsible for procurement of material and selecting the right raw material at right time.
The material manager is held responsible for storing materials and maintain the stock records in the factory.
The material manager is also responsible for production control and distribution of finished goods to warehouse and to final customers.
Material manager has to have co-ordination with functional department of the industry.
IMPORTANCE OF MATERIAL MANAGEMENT TO MANUFACTURING INDUSTRY
Material management is an important factor to industry.Improper planning of materials can be complex problem for any industry.
The poorly managed inventory records can cause a serious problems for any industry.Material management keeps inventory accurate for the industries.The fluctuation in prices of items can be managed by material management.sometimes the prices rises overnight.The important function of material management is to check smooth flow of raw materials into the production process without shortage of materials.It increases efficiency of workers,reduces material obsolescence ,better records and control and improves quality of the product.
COMPONENTS OF MATERIAL MANAGEMENT
The components of material management are
Inventory management
Supplier relationship management
Purchase and contract management
Supply chain and logistics management
Stores management
Fig: Components of material management
Tools for material manager
1.ABC analysis
2.Statistical quality control
3.Inventory control Technique
CHALLENGES OF MATERIAL MANAGER
Any manager will find it difficult to manage smooth flow of materials into the operations parts.The issues relating to the problem can be a complex one.The following are the issues relating to material manager are
Large number of scraps and not done at regular time
Shipping errors to the final customers.
Unable to maintain production reports
Making mistakes while receiving raw materials.
Errors in automated handling of materials
Not updating inventory records and failing to order inventory.
Limitation of automated system
A company has to invest heavily
Need additional staff
Need more space
Training of staff to use automates system which incur cost
No flexibility
Purchasing is an important function of material management.The elements of purchasing are
a. right quality
b. right quantity
c.right price
d. right time
e.right source.
The process of purchasing are:
a.materials requisitions from various departments
b.If the material is of priority to the department
c.Formulate policy and procedures for purchasi
d. Identify various supplier
e.Identify the source of supply
f.Issue of tender based on requirement
.PurchAse material with low cost
h.Delivery at right time
i.Inspect the materials before storing at factory
j.Payments of materials to the vendor
Benefits of effective purchasing are:
1. improvement in quality of materials delivery
2. Performance of quality of product
3. short production cycle
4. continuous improvement of quality
5. Building trust between buyer and supplier
CONCLUSION:
This paper has highlighted the mandatory requirement and role for material managers in the dynamic business environment. Without proper planning, there can be haphazard and disruption in the production process.Firm has to build on strategy to manage materials and uninteruption flow of materials in the production process.Further there are scope of future value addition in the material management areas.
1. J.R. Arnold,S.N. Chapman, “Introduction to Materials Management”,5thed., New Jersey: Prentice-Hall, 2004.
2. D.U. Kini “The material management is key to successful project management”, journal of
management in engineering/January/February 1999
3. Kasim N.B., Anumba C.J. and Dainty A.R.J., “Imroving Material Management Practices on Fast Track Moving Construction Projects”, 21st Annual ARCOM Conference, September-2005, 793-802
4. Ramakrishna, R. V. 2005. Materials Management -Profit Centre. Indian Institute of Materials Management Knoelwdge Bank
5.. D.U. Kini “The material management is key to successful project management”,journal of
management in engineering/January/February 1999
6. L.C. Bell, G. Stukhart “Attributes of material management systems”, ASCE, Vol.112, No. 1, March
1986
7. Ramakrishna, R.V. (2005). Materials Management – profit centre. Indian Institute of Materials Management Knowledge Bank.
8 . Leenders, M(1992). Purchasing and Material Management (9th Edition), New Delhi: Universal Book publishers.
9. Taiwo O. A, Claudius J. A, and James M. U, (2012) “materials management: an effective tool for optimizing profitability in the Nigerian food and beverage manufacturing industry” Journal of Emerging Trends in Economics and Management Sciences, 3 (1), 25-31
10. Chase, R.B., Jacobs, F.R. and Aquilano, N.J., Operations Management for Competitive Advantage, 10th ed., McGraw-Hill/Irwin, New York, 2004.
11. Wallin, C., Rungtusanatham M. J., and Rabinovich, E., What is the “right” inventory management approach for a purchased item? International Journal of Operations & Production Management, vol. 26, no. 1, pp. 50-68, 2006. Kros, J. F.,
12. Lemu T (2007). The Role of Materials Management in Economic Development, Lagos: Zenith Publications.
http://ispatguru.com/materials-management/