2. To identify the activities of materials
management.
To identify the role of materials
management.
To identify and describe the scope and
objectives of material management.

3. Managing Materials Flow
(MMF)
is an integral part of the logistics management
process, which encompasses the administration of raw
materials, subassemblies, manufactured parts, packing
materials, and in-process inventory.
In a formal sense, implementation of a materials
management organization will have "a single manager
responsible for the planning, organizing, motivating, and
controlling of all those activities and principally
concerned with the flow of materials into an
organization.“

4. Materials management
-is critical to the total logistics process.
Although materials management does not directly
interface with the final customer, decisions made in its
portion of the logistics process will directly affect the
level of customer service offered. The ability of the
firm to compete with other companies, and the level of
sales and profits the firm is able to achieve in the
marketplace.

5. Role of Materials Management
*as an organizationshave developed
and matured, the role of materials
management has expanded to meet the
challenges of market-driven, rather
than production-driven economies.

6. Materials Management: Old and New Thinking
Old thinking New thinking
Market -seller’s market; low competition; restricted  buyer’s market; keen competition; global
export
oriented
Products - small assortment; long life cycle; low
technology  wide assortment; short life cycle; high
technology
Production -full capacity load; low flexibility; large lot sizes;
long lead times; low costs; make instead of buy  full capacity load; high flexibility; low lot
sizes; short lead times; low costs; buy instead
of make
Service level -high service level; high inventories; slow
logistics process; slow transport time
 high service level; low inventories; quick
Information technology - manual data processing; paper logistics process, quick transport time
administrator
 electronic data processing; paperless factory
Enterprise strategy -production oriented
 market oriented

7. SCOPE OF MATERIALS
MANAGEMENT
Materials management is typically comprised of four basic
activities:
1. Anticipating materials requirements.
2. Sourcing and obtaining materials.
3. Introducing materials into the organization.
4. Monitoring the status of materials as a current asset.
Functions performed by materials managers include purchasing,
inventory control of raw materials and finished goods, receiving,
warehousing, production scheduling, and transportation. The
definition of materials management views the activity as an
organizational system with the various functions as interrelated,
interactive, subsystems.

8.  The objectives of materials management are to solve
materials problems from a total company viewpoint
[optimize] by coordinating performance of the various
materials functions, providing a communications net
work, and controlling materials flow.

9.  Materials management encompasses a variety of
logistics activities. The primary differences between
the process of materials management and that of
finished goods distribution are that the items handled
in materials management are incoming finished
goods, raw materials, component parts, and
subassemblies to be further processed or sorted before
being received by the final customer. The recipient of
the materials management effort is the production or
manufacturing group and oilier internal customers,
not the final customer.

10.  Integral aspects of materials management include
purchasing and procurement, production control,
inbound traffic and transportation, warehousing and
storage, management information system (MIS)
control, inventory planning and control, and salvage
and scrap disposal.

11. OBJECTIVES OF MATERIALS
MANAGEMENT:
 Low costs- to optimize materials costs, capital costs
and overhead expenses.
 High level of service- to optimize response toward
production and markets.
 Quality assurance- to maintain and improve the
quality of material.
 Low level of tied-up capital- to optimize capital tied-
up in inventories.
 Support of other functions- to support sales and
design/ development.

12. Total Quality management (TQM)
A philosophy and a set of guiding principles that
represent the foundation of a continuously improving
organization.
-the application of quantitative and human resources to
improve the material services supplied to an
organization, all the process within the organization,
and the degree to which the needs of the customers
are met- now and in the future.

13.  TQM integrates fundamental techniques, existing
improvement efforts, and technical tools under a
disciplined approach focused on continuous
improvement.

14. Additional information related
to managing materials

15. KANBAN/JUST-IN-TIME SYSTEMS
Kanban and just-in-time systems have become much
more important in manufacturing and logistics
operations in recent years. Kanban, also known as the
Toyota Production System (TPS), was developed by
Toyota Motor Company during the 1950s and 1960s.
The philosophy of Kanban is that parts and materials
should be supplied at the very moment they are
needed in the factory production process. This is the
optimal strategy, from both a cost and service
perspective. The Kanban system can apply to any
manufacturing process involving repetitive operations.

16. Just-in-time
 Just-in-time (JIT) systems extend Kanban, linking
purchasing, manufacturing, and logistics. The primary
goals of JIT are to minimize inventories, improve
product quality, maximize production efficiency, and
provide optimal customer service levels. It is basically a
philosophy of doing business.

17. JIT has been defined in several ways, including the following:
1. As a production strategy, JIT works to reduce manufacturing costs and to
improve quality markedly by waste elimination and more effective use of
existing company resources.
2. A philosophy based on the principle of getting the right materials to the right
place at the right time.
3. A program that seeks to eliminate nonvalue-added activities from any
operation with the objectives of producing high-quality products (i.e. "zero
defects"), high productivity levels, and lower levels of inventory, and
developing long term relationships with channel members.
At the heart of the JIT system is the notion that waste should be eliminated. This
is in direct contrast to the traditional "just-in-case" philosophy in which large
inventories or safely stocks are held just in case they are needed. In JIT, the
ideal lot size or EOQ is one unit, safely stock is considered unnecessary, and
any inventory should be eliminated.

18. Many firms have successfully adopted the JIT approach. Companies in industries
such as metal products, automobile manufacturing, electronics, and food and
beverage have implemented JIT and realized a number of benefits, including:
1. Productivity improvements and greater control between various production
stages.
2. Diminished raw materials, work in process, and finished goods inventory.
3. A reduction in manufacturing cycle times.
4. Dramatically improved inventory turnover rates.
In general, JIT produces benefits for firms in four major areas: improved
inventory turns, better customer service, decreased warehouse space, and
improved response time. In addition, reduced distribution costs, lower
transportation costs, improved quality of supplier products, and a reduced
number of transportation carriers and suppliers can result from the
implementation of JIT.

19. Problems Associated with
Implementation JIT:
It has some inherent problems which fall into three
categories:
 production scheduling (plant),
 supplier production schedules, and
 supplier locations.

20. MRP SYSTEMS
MRP has been used to signify systems called materials
requirements planning (MRPI) and manufacturing
resource planning (MRI II). Introduced first, MRP I
developed into MRP II with the addition of financial,
marketing, and purchasing aspects.

21. MRP I became a popular concept in the 1960s and 1970s.
From a managerial perspective, MRP I consists of:
(1) computer system,
(2) a manufacturing information system, building on
inventory, production scheduling, and administering
all inputs to production, and
(3) a concept and philosophy of management.

22. MRP I is a computer-based production and inventory
control system that attempts to minimize inventories
while maintaining adequate, materials for the
production process. MRP I systems are usually
employed when one or more of the following
conditions exist:

23. 1. When usage (demand) of the material is discontinuous or
highly unstable during a firm's normal operating cycle.
'This situation is typified by an intermittent manufacturing
or job shop operation, as opposed to a continuous
processing or mass-production operation.
2. When demand for the material depends directly on the
production of other specific inventory items or finished
products. MRP I can be thought of as primarily a
component fabrication planning system, in which the
demand for all parts (materials) is dependent on the
demand (production schedule) for the parent product.
3. When the purchasing department and its suppliers, as
well as the firm's own manufacturing units, possess the
flexibility to handle order placements or delivery releases
on a weekly basis.

24. MRP I systems offer many
advantages over traditional
systems, including:
1. Improved business results (i.e., return on investment,
profits).
2. Improved manufacturing performance results.
3. Better manufacturing control.
4. More accurate and timely information.
5. Less inventory.
6. Time-phased ordering of materials.
7. Less material obsolescence.
8. Higher reliability.
9. More responsiveness to market demand.
10. Reduced production costs.

25. Thank you! ^_^