Professional Documents
Culture Documents
Materials
Management
Dr. D.T.Manwani
B.E(Mech), M.B.A(Finance), Ph.D(Finance)
Management
Basic Resources
MEN
Planning
MATERIALS
M/Cs
METHODS
MONEY
MARKET
Staffing
&
Communicating
ER
Organising
6 Ms
Coordinating
Directing
Controlling
Materials Management
Cost of Materials
Timely supply of quality material.
Materials utilization
Maximisation of production
Reduction in the cost of production
Maximisation of the margin of profit.
FINANCE
PAYS
THE BILLS
ENGINEERING
SPECIFIES
MATERIAL
MANAGEMENT
MARKETING
SELLS
PRODUCTION
TRANSFORMS
INTO
PRODUCT
PRIMARY
PROVISION OF
MATERIALS
1. Economic
Procurement
2. Proper storage
3. Proper issue &
distribution
SECONDARY
MINIMISATION
OF INVENTORIES
1. Inventory Control
2. Movement, storage
accounting
3. Assuring High
capital turnover
ratio
1. Location of New
sources of supply
2. Variety reduction &
simplification
3. Standardisation &
Quality control
4. Value Analysis
5. Coordination
6. Development of skill &
Knowledge.
long Term
Loan
Working
Capital
Minimise cost of
Products
Minimise Cost of materials
Minimise Inventories
Efficient coordination
Better communication
Improved productivity
Increased profitability
PURCHASING (6 Rs)
Purchasing Activities
National Association of Purchasing Management USA has
identified following activities related to purchasing
Communication and
specification changes
Productivity/cost improvements
Development of sourcing
strategy
Market Analysis
Price forecasting
Large range purchasing
planning
Determination of purchasing
policy
Value Analysis
BAR CODING
BAR CODING(Contd..)
History
VA had its genesis during the war years of the early 1940s. By the mid
1960s Values analysis was established as the corner stone of most
purchasing research and cost reduction programs in major manufacturing
firms.
During World War II many critical materials and components were difficult
to obtain, and most manufacturers were required to specify numerous
substitutes in their design and production activities.
Harry Erlicher, the Vice President of Purchasing for the General Electric
Company, observed that many of the required substitutions during this
period resulted not only in reduced costs but also product improvement.
Consequently, Mr. Erlicher assigned to L.D. Miles, the task of developing
a systematic approach to the investigation of the function/cost aspect of
existing material specifications. Larry Miles not only met this challenge
successfully, but subsequently pioneered the scientific procurement
concept, General Electric called Value Analysis.
Concept
VA/VE Tools
Design Analysis of the required produce part or material.
Cost Analysis of the required produce, part or material.
Design Analysis
The Values Analysis Check List National Association of Purchasing Management suggests first
determine the functions of the item & then determine the following
Can you make the item less expensively in your plant ? If you are
making it now, can you buy it for less?
Cost Analysis
Cost Analysis(contd)
It
VENDOR ANALYSIS
Vendor Analysis is the process of
evaluating the sources of supply.
The main factors for selecting a vendor are:
Price, Quality, Services, location, Inventory
policy of supplier & flexibility
Supplier Certification
It is a detailed examination of the policies
and capabilities of a supplier. ISO 9000
QMS is most widely used international
certification.
Suppliers Audit
Periodic Audits of supplier are helpful in
getting current information on suppliers
production capabilities, quality and
delivery problems etc. Supplier audits are
also important first step in the supplier
certification program.
Simplification
Most frequently, simplification means
reducing the number of standard items a
firm uses in its product design and carries
in its inventory.
For example, no of types of grease were
reduced to Six from earlier twenty seven
types. Number of bearings and fasteners
reduced by 50%
Thank You