Chapter 4 - Materials management. Chapter 4 focuses on materials management in support of the transformation of raw materials and component parts into throughput (sales). The functions included in the materials management concept include materials planning and control, production scheduling, receiving, stores, traffic, disposal of scrap, quality control, and inventory control.
Chapter4: MaterialsManagement PurchasingandSupplyChainManagement 3rdedition PurchasingandSupplyChainManagement,3rdedition,Copyrightâ2013,W.C.BentonJr.,Allrightsreserved. PurchastingandSupplyChainManagement,3rdedition,Copyright2013W. MaterialsManagement ã Thepurposeofmaterialsmanagement • To support the transformation of raw materials and component parts into shipped or finished goods Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved. The Five Functions of Inventory 1. Pipeline inventories 2. Cycle inventories 3. Buffer stock 4. Seasonal 5.Decoupling PurchasingandSupplyChainManagement,3rdedition,Copyrightâ2013,W.C.BentonJr.,Allrightsreserved. OrderCycleasaLink ã Alinkorpipelinethatfacilitatestheflowof informationandmaterials ã Characteristics ã Length ã ã Thedistancebetweensupplierandcustomer Modes ã Methodbywhichinformationissentandmaterial moved PurchasingandSupplyChainManagement,3rdedition,Copyrightâ2013,W.C.BentonJr.,Allrightsreserved. Order Cycle as a Set of Activities • Activities • Order preparation by Customer • Order transmission by Customer • Order processing by Supplier • Order transportation by Supplier Tasks: • Order receipt by Customer 1. Physical receipt 2. Unloading 3. Inspection 4. Storage location decision 5. Move to storage 6. Documentation PurchasingandSupplyChainManagement,3rdedition,Copyrightâ2013,W.C.BentonJr.,Allrightsreserved. CustomerSatisfaction ã ã ObjectivesofMaterialManagers ã Customersatisfaction ã Minimumtotalmaterialscosts Customer Satisfaction Dimensions • Customer service • Material availability • Quality • And others PurchasingandSupplyChainManagement,3rdedition,Copyrightâ2013,W.C.BentonJr.,Allrightsreserved. ProductdesignandQuality ã ã ã Designissettingthespecificationsforamaterialor product Aproductdesignersjobistocapture,intheproducts design,theexpectationsofthecustomer AMaterialsmanagersjobistoensurethatproductsare madeintheleastcostlywaysothattheitemqualifiesas abestbuy PurchasingandSupplyChainManagement,3rdedition,Copyrightâ2013,W.C.BentonJr.,Allrightsreserved. ObjectiveQuality ã Approachestoquality ã Subjectivequality ã Objective quality • • The degree to which material conforms to specifications High quality products must both: • Conform closely to specifications • • Objective Quality Satisfyconsumerexpectations ã SubjectiveQuality PurchasingandSupplyChainManagement,3rdedition,Copyrightâ2013,W.C.BentonJr.,Allrightsreserved. MROMaterialsandSpecification ã ã MaintenanceMaterials ã Periodical replacement in a piece of equipment • Resupply by original equipment manufacturer • Specified by manufactured part number and the model number of the unit Repair Materials • Unexpected replacement • Usuallynotcarriedasinventory ã Specifiedbyvariouswayssuchasdrawingsandphotographs PurchasingandSupplyChainManagement,3rdedition,Copyrightâ2013,W.C.BentonJr.,Allrightsreserved. MROMaterialsandSpecification(cont.) ã OperatingSupplies ã Essentialpartsoftheenditem • Unit value or size is too small to plan or control usage unit by unit • Standard items • Specified by manufacturer or industry codes 10 Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved. Questions? 11 Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved. ... Material availability • Quality • And? ?others Purchasing? ?and? ?Supply? ?Chain? ?Management, 3rd edition, Copyright © 2013,? ?W.? ?C.? ?Benton? ?Jr., All rights reserved. Product design? ?and? ?Quality • • • Design is setting the specifications for a material or ... Specified by various ways such as drawings? ?and? ?photographs Purchasing? ?and? ?Supply? ?Chain? ?Management, 3rd edition, Copyright © 2013,? ?W.? ?C.? ?Benton? ?Jr., All rights reserved. MRO Materials? ?and? ?Specification (cont.)... 1. Physical receipt 2. Unloading 3. Inspection 4. Storagelocationdecision 5.Movetostorage 6.Documentation PurchasingandSupplyChainManagement,3rdedition,Copyrightâ2013,W.C.BentonJr.,Allrightsreserved. CustomerSatisfaction