Professional Documents
Culture Documents
Contents
Definition
Contd..
Contents
Value analysis
Purchasing
Vendor development Buying techniques Purchasing cycles and procedure Advantages of material management
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 a scientific technique, concerned with Planning, Organizing &Control of flow of materials, from their initial purchase to destination.
PURPOSE OF MATERIAL MANAGEMENT To gain economy in purchasing To satisfy the demand during period of
replacement To carry reserve stock to avoid stock out To stabilize fluctuations in consumption To provide reasonable level of client services
inventory turnover. Responding to the market changes related to any product. Ensuring the cooperation of all departments. Providing best services to the king of the market i.e customer.
for storing finished bulk. & for raw materials as per the property of materials they are stored- plastic containers ( light weight containers)
Re-handling and back tracking of the materials
should be avoided.
The materials handling service should not interfere
Classes of materials
Raw materials:- These are materials that are
Classes of materials
In-progress materials:- They are called work in
process of manufacturing.
Quantity
From the inventory point of view, quantity standards are decided on the following parameters; i. Maximum inventory ii. Minimum inventory iii. Standard order iv. Reorder point 3) Price 4) Delivery Date
Value Analysis
Definition:- It is a systematic study of every element for its cost in a part, material or service to make certain that it performs its function at the lowest possible cost. Benefits of value analysis:i. Decrease in existing cost of the product or service. ii. Unnecessary expenditure is identified and eliminated. iii. Product value improves for new materials and processes. iv. More profits.
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Purchasing
Centralized :- The purchasing procedure of materials for different department is done together from one purchasing department. This is seen in small organizations. Advantages Efficient system Bargaining capabilities increased Good raw material obtained at lower price Decentralized:-Different department purchase their requirement seperately. This is basically seen in large organizations.
Vendor development
The supplier or the person who sells the required materials or services for the production is known as a vendor. The purchase of raw materials/service from a specific vendor is known as the vendor development.
3rd 4th
1) Survey stage
The following sources are considered for information Trade directories :- e.g. Yellow pages , eindiabusiness.com Trade journals:- e.g. Pharmatimes Telephone directories Suppliers catalogue Salesmen Other ways are like interchanging of information with other companies, tracing of public tenders and advertisements in the press.
2) Enquiry stage
After getting the information of the suppliers, detailed analysis of the supplier is being carried out. A comparison is being made between the different suppliers on basis of the following points:a.
b.
c. d.
2) Enquiry stage
The following aspects can be verified by the first hand visit: Internal facilities of the vendor Financial adequacy, stability and reputation of the vendor Location of vendors factory After sales service Industrial relations
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vendor. The objective is to improve the performance of the vendors. Few ways of evaluating a vendor are:Categorial method Weighted point method Cost ratio method
Categorial method
The buyer sets up some category on which the evaluation of the vendor is done. Specimen of suppliers evaluation form is given below.
Grading
Always 9 8 7
Usually 6 5 4
Seldom 3 2 1
Never 0
Buying techniques
Purchasing of material , machinery and services is done by purchasing department. For buying the material company has to pay up a price, the value that a seller sets on his goods in the market is called as the price of that good. Price is one of the greatest variables in the material. purchasing of
know whether the vendor can supply the desired material and at what price. They are not the purchase order. They just contain all the details including freight, taxes and many other costs. The highly used quotation techniques are Spot quotations Floating a limited enquire
value of the purchase is small. In this technique the reliable vendors are called upon and asked to provide the quotations.
It is a written letter or a published document that is aimed at finding the price for procuring certain materials.
Tenders are invited from recognized firms. A few types of tenders are: # single tender # Open tender # Closed tender or limited tender
supplier. This kind of tender is floated only when the itms are required urgently.
Open tender:- Also known as press tender. This
is used when the value of item to be purchased is very high. It is used to locate more suppliers. In this tender procured, a small amount of the deposit money is taken from the supplier so that they do not withdraw from the submitted rates.
between
the
Discounts:- They are cash concessions offered by the vendor to the buyer, in order to enhance the volume of the business opportunities. Reasons for offering discounts????? ! When there is a bulk purchase. ! When the bills are cleared immediately. ! And also to maintain the good rapo with the buyer Types of discounts:1) Volume contracts. 2) Deals 3) Discounts 4) Consignment terms
The purchasing department of the company is responsible for the purchase of all the raw materials as well as the requirements. The following steps are followed in the purchasing cycle. 1) Recognition of need and receipt of requisition: The requisition includes the following information:- Name - Quality and quantity specifications - Date by which material is required - Place at which material is to be delivered
Need recognition
Select suppliers
Quotations & analysis prices and terms, negotiations, finalisation Purchase order for supply Suppliers acceptance
Follow-up
Contd .
Delivery of materials
Payment made
Location of Stores :
Store should be located adjacent to the manufacturing area.
It depends up on nature and value of items to be stored and frequency with which items are received and issued
Objectives : Minimum wastage of space Maximum ease of operation Minimum handling cost Minimum other operational cost
Facilities of Store
Inspection center Quarantine room Washing room Centralized weighing department
Adequate space
Functions of stores
General function :
Maintenance of Stock (materials and tools)
pest control
Maintenance of material handling equipment
Functions of stores
Receiving & recording of raw materials
Quarantine storage Sampling & approval by QC Positioning & Storage
Specific functions :
Optional functions :
Dispensing, Maintenance of weights & measures
Material handling uses the right method to provide the right amount of the right material at the right place, at the right time, in the right sequence, in the right position, in the right condition, and at the right cost.
activities as is practical into a coordinated system of operations, covering vendor, receiving, storage, production, inspection, packaging, warehousing, transportation. etc.
9. Automation principle. Provide automation to include production, handling, and storage functions.
10. Equipment selection principle. In selecting handling equipment, consider all aspects of the material being handled.
11. Standardization principle. Standardize handling methods as well as types and sizes of handling equipment.
12. Adaptability principle. Use methods and equipment that can best perform a variety of tasks and applications where special purpose equipment is not justified.
18. Capacity principle. Use handling equipment to help achieve desired production capacity.
19. Performance principle. Determine effectiveness of handling performance in terms of expense per unit handled. 20. Safety principle. Provide suitable methods and equipment for safe handling.
Efficiently
At low cost In a timely manner
products Delay in production schedule and long production cycle Waste of machine time and personnel time Increase in in-process inventories Damage or loss of material and employee safety liabilities Employee frustration and reduced morale Customers dissatisfaction
2.
Observe activities Obtain layouts, flow patterns, schedules, etc. Obtain information on existing material handling equipment Analyze situation by Twenty Principles of Material Handling, and/or forms Can activities be combined, simplified, eliminated???
3.
Organize meeting with: material handlers machine operators supervisors support engineers
4.
Evaluate alternatives
Meet again to rate alternatives
Industrial Trucks
Two basic categories: 1. Non-powered
2.
Powered
Powered Trucks
Capacities from 450 kg up to 4500 kg Power sources include on-board batteries and internal combustion motors
Powered Trucks
Designed to pull one or more trailing carts in factories and warehouses, as well as for airport baggage handling Powered by onboard batteries or IC engines
be introduced around 1954 Common application is moving heavy loads over long distances in warehouses and factories without intermediate stops along the route
loads along predetermined routes Vehicle is backed into loaded pallet by worker; pallet is then elevated from floor Worker drives pallet truck to AGV guide path and programs destination
AGVs Applications
1.
2.
3.
4.
5.
Driverless train operations - movement of large quantities of material over long distances Storage and distribution - movement of pallet loads between shipping/receiving docks and storage racks Assembly line operations - movement of car bodies and major subassemblies (motors) through the assembly stations Flexible manufacturing systems - movement of work parts between machine tools Miscellaneous
Rail-Guided Vehicles
Self-propelled vehicles that ride on a fixed-rail
system Vehicles operate independently and are driven by electric motors that pick up power from an electrified rail
Fixed rail system Overhead monorail - suspended overhead
from the ceiling On-floor - parallel fixed rails, tracks generally protrude up from the floor
Overhead Monorail
Conveyor Systems
Large family of material transport equipment designed to move materials over fixed paths, usually in large quantities or volumes
1. Non-powered :
Materials moved by human workers or by gravity
2. Powered :
Power mechanism for transporting materials is contained in the fixed path, using chains, belts, rollers or other mechanical devices
Conveyor Types
Roller
Skate-wheel Belt In-floor towline Overhead trolley conveyor
Roller
Skate-wheel
Belt
In-floor towline
Hoists Used for vertical lifting of materials Cranes usually include hoists so that the crane-
Hoist
Load
Bridge Crane
Gantry Crane
Jib Crane
These occur for the following reasons: Mistakes in procurement Wrong planning decisions Wasteful processes in production Inevitable waste during the adjustment of the
materials is one of the most important area of materials management, but often overlooked or considered minor.
Popular due to increased public awareness of
environment, government legislation, better recognition of opportunities it offers in return. e.g. paper files and forms are recyclable item that can be sold to recycle company.
The following measure are adopted and monitored for handling scrap:
1. Controlling of surplus and scrap 2. salvaging or converting the waste for
advantageous use. 3. Disposal of the surplus and scrap to the best advantage.
The production department primarily controls the first function by proper design, while purchase department handles the second and third functions. Waste materials in pharmaceutical industry:
Empty
drums, packing materials, card boards, aluminium caps, bottles etc. these are nonrecoverable rejects. Spoiled materials during production. In a few instances, these may be recoverable. Worn-out parts of equipments (examples are punches and dies), old equipment (due to expiry of life) and obsolete equipment (due to technology change).
Salvage : It is defined as the processing of materials (items) for advantageous use or disposal of company property, which is no longer economically useful in its present position.
Salvage operation : Waste materials are properly collected and stored at one place continuously, so that these can form a separate batch in production. Recoverable materials are stored in a scientific way as other items stored.
Materials are stored in terms of quality or size or specifications. Waste is invested for suitability to recover or avoid them. Salvaging
conditions: Evidences from laboratory tests and assays that the drug products meet all applicable standards of identity, strength, quality and purity.
Evidence from inspection of premises that the drug products and their associated packing were not subjected to improper storage condition, as a result of the disaster or accident.
Disposal
Disposal of scrap, waste and surplus materials can be effected by several way :
Surplus material should be returned to the
original supplier. Alternatively a customer who needs them should be explored. As a social obligation, some material are defected or broken before selling them as scrap.
Disposal
Materials
may be sold by inviting quotations from potential buyers or through various contracts such as fixed price contract, varying price contract, specific bids and negotiations.
finished parts, finished product) to be move together, like: A set of cartons on a pallet A set of products in a container
In something (In a carton) On something (On a pallet) Grouped by something (wrapped, strapped)
Multiple items handled simultaneously Required number of trips is reduced Loading/unloading times are reduced Product damage is decreased
Pallets :
Style and Size based on: Shipping and receiving restrictions Size and weight of items on the pallet Space restrictions Equipment used to move the pallet Cost, supply, and maintenance Aisle widths, door sizes, stacking heights
Types of Pallets :
Materials used :
Softwood Hardwood
Paper
Containerization :
Different types of containers are used according to the type of material. e.g Boxes, cartons, cases, sacks, bales, pallets, drums, barrels, crates, cable drums, machinery, and processed timber Tank containers for bulk liquids and dangerous goods.
utilized.
The issue of materials is also facilitated. It