materials -vendor mgmt-value analysis-stores mgmt
TRANSCRIPT
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16-1 Supply Chain Management
Materials Management - DefinitionIt 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 a scientific technique, concerned with Planning, Organizing &Control of flow of materials, from their initial purchase to destination.
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16-2 Supply Chain Management
AIM OF MATERIAL MANAGEMENT
To get
1. The Right quality
2. Right quantity of supplies
3. At the Right time
4. At the Right place
5. For the Right cost
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16-3 Supply Chain Management
PURPOSE OF MATERIAL MANAGEMENT
•To gain economy in purchasing
•To satisfy the demand during period of replenishment
•To carry reserve stock to avoid stock out
•To stabilize fluctuations in consumption
•To provide reasonable level of client services
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16-4 Supply Chain Management
Primary•Right price•High turnover•Low procurement •& storage cost•Continuity of supply•Consistency in quality•Good supplier relations•Development of personnel•Good information system
Objective of material management
Secondary•Forecasting•Inter-departmental harmony•Product improvement•Standardization•Make or buy decision•New materials & products•Favorable reciprocal relationships
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16-5 Supply Chain Management
Economy in material management
•Containing the costs
•Instilling efficiency in all activities
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16-6 Supply Chain Management
Purchasing is responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service.
PurchasingPurchasing
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16-7 Supply Chain Management
Develop and implement purchasing plans for products and services that support operations strategies
Goal of PurchasingGoal of Purchasing
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16-8 Supply Chain Management
Identifying sources of supply
Negotiating contracts
Maintaining a database of suppliers
Obtaining goods and services
Managing supplies
Duties of PurchasingDuties of Purchasing
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16-9 Supply Chain Management
Purchasing InterfacesPurchasing Interfaces
Purchasing
Legal
AccountingOperations
Dataprocessing
Design
ReceivingSuppliers
Figure 16.5
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16-10 Supply Chain Management
Purchasing CyclePurchasing Cycle
1. Requisition received
2. Supplier selected
3. Order is placed
4. Monitor orders
5. Receive orders
PurchasingPurchasing
LegalLegal
AccountingAccountingOperationsOperations
DataDataprocess-process-inging
DesignDesign
ReceivingReceiving
SuppliersSuppliers
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16-11 Supply Chain Management
Value analysis Examination of the function of purchased
parts and materials in an effort to reduce cost and/or improve performance
Value Analysis vs. OutsourcingValue Analysis vs. Outsourcing
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16-12 Supply Chain Management
Value Analysis Value Analysis (Value Engineering)(Value Engineering)
Ratio of value / costRatio of value / cost Assessment of value : Assessment of value :
1. Can we do without it?1. Can we do without it?2. Does it do more than is required?2. Does it do more than is required?3. Does it cost more than it is worth?3. Does it cost more than it is worth?4. Can something else do a better job4. Can something else do a better job5. Can it be made by less costly method, tools, 5. Can it be made by less costly method, tools,
material?material?
6. Can it be made cheaper, better or faster by someone 6. Can it be made cheaper, better or faster by someone else?else?
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16-13 Supply Chain Management
Centralized purchasing
Purchasing is handled by one special department
Decentralized purchasing
Individual departments or separate locations handle their own purchasing requirements
Centralized vs Decentralized PurchasingCentralized vs Decentralized Purchasing
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16-14 Supply Chain Management
Choosing suppliers
Evaluating sources of supply
Supplier audits
Supplier certification
Supplier relationships
Supplier partnerships
Suppliers’ / Vendors’ ManagementSuppliers’ / Vendors’ Management
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16-15 Supply Chain Management
Quality and quality assurance Flexibility Location Price
Factors in Choosing a SupplierFactors in Choosing a Supplier
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16-16 Supply Chain Management
Product or service changes Reputation and financial stability Lead times and on-time delivery Other accounts
Factors in Choosing a Supplier (cont’d)Factors in Choosing a Supplier (cont’d)
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16-17 Supply Chain Management
Evaluating Sources of SupplyEvaluating Sources of Supply
Vendor analysis: Evaluating the sources of supply in terms of price, quality, reputation, and service
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16-18 Supply Chain Management
Vendor analysis - evaluating the sources of supply in terms of Price Quality Services Location Inventory policy Flexibility
Evaluating Sources of SupplyEvaluating Sources of Supply
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16-19 Supply Chain Management
Ideas from suppliers could lead to improved competitiveness
1. Reduce cost of making the purchase2. Reduce transportation costs3. Reduce production costs4. Improve product quality5. Improve product design6. Reduce time to market7. Improve customer satisfaction8. Reduce inventory costs9. Introduce new products or services
Supplier PartnershipsSupplier Partnerships
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16-20 Supply Chain Management
Storage
•Store must be of adequate space
•Materials must be stored in an appropriate place
• in a correct way
•Group wise & alphabetical arrangement helps in
•identification & retrieval
•First-in, first-out principle to be followed
•Monitor expiry date
•Follow two bin or double shelf system, to avoid
•Stock outs
•Reserve bin should contain stock that will cover
•lead time and a small safety stock
Issue & useCan be centralized or decentralized