materials management Flashcards
A process encomposing acquisition, shipping, receiving,
evaluation, warehousing and distribution of goods,
supplies and equipment.
materials mgmt
aim og mm
The right quality
Right quantity of supplies
At the right time
At the right place
For the right cos
To gain economy purchasing
PURPOSE OF MATERIALS MANAGEMENT
To satisfy the demand during period of replenishment
purpose of mm
To carry reserve stock to avoid out
purpose of mm
To stabilize fluctuations in consumption
purpose of mm
To have adequate materials on hand when needed
BASIC NEED OF MATERIAL MANAGEMENT
To pay the lowest possible prices, consistent wish
quality and value requirement for purhases materials
basic need of mm
To minimize the inventory investment to operate
efficiently
basic need of MM
Demand estimation
elements of MM
Identify the needed items
elements of MM
Calculate from the trends in consumption during last 2
years
ELEMENTS OF MM
Review with resource constraints
ELEMENT OF MM
FUNCTION OF MM
Material planning and programming
Procurement ( purchasing and outsourcing)
Inventory control
Store keeping and warehousing
Codification
Standardization and evaluation of all products
Transportation and material handling
Inspection and quality control
Cost reduction through value analysis
Disposal of surplus/ obsolete material
Distribution
Based on need assessment
PROCUREMENT PRINCIPLE
ULTIMATE AIM OF PROCUREMENT PRINCIPLES
Ultimate Aim: Right quality, right quantity, right prices,
right source and right time to the right place.
Centralize the purchase system
PROCUREMENT PRINCIPLE
Back up of good systems management
PROCUREMENT PRINCIPLE
OBJECTIVES OF PROCUREMENT SYSTEM
Acquire needed supplies as inexpensively as possible
Obtain high quality supplies
Assure prompt & dependable delivery
Distribute the procurement workload to avoid pend of
idleness &
Optimize inventory
PROCUREMENT CYCLE
Review selection
Determine needed quantities
Reconcile need & funds
Choose procurement method
Select suppliers
Specify contract terms
Monitor order status
Receipt & inspection
POINTS TO REMEMBER WHILE PURCHASING
Proper specification
Invite quotations from reputed firms
Comparison of offers based on basic price, freight &
insurance, taxes and
Quantity & payment discounts
LAB MANAGEMENT
LECTURE / FIRST SEMESTER SY 2023-2024
Payment terms
Delivery period guarantee
Vendor reputation ( reliability, technical capabilities,
convenience, availability)
Short listing for better negotiation terms
Seek order acknowledgement
FINDING THE RIGHT SOURCE
Supplies catalogue
Print media: trade directories, trade journals , news
paper papers, yellow pages
Sales person: many advantages
Trade exhibition, fairs, conferences
Colleagues in similar fields
Interne
NEGATION PRINCIPLE
Not to purchase on listed price
Negotiate bulk price
Always ask for discount
Price protection
Credit
Establish written protocols, assign responsibility
RECEIBING
Checking of goods for quality, expiry etc.
Cross check with purchase order & invoice/ delivery
Proper record in designed registers
Signature of receiver & delivery person
Periodic check
RECEIVING
MUST BE FOLLOWED IN STORAGE
First- in, first- out principle to be followed
Follow to avoid stock cut
two bin double shelf system,
should contain stock that will cover lead
time and a small safety stock.
RESERVE BIN
Scientific system which indicates
What to order
When to order
How much to order
How much to stock
INVENTORY CONTROL
FUNCTION OF INVENTORY CONTROL
Stock to ensure uninterrupted supplies
The idle resources which have future economics value
Cushion between estimated and actual demand
of material
MEANING OF ABC IN ABC ANALYSIS
always better control
This based on cost criteria
abc analysis
elps to exercise selective control when confronted
with large number of items, to rationalize the number of
orders, number of items & reduce the inventor
abc analysis
Must have: Tight control, Rigid estimate of
requirements, strict closer watch and managed by top
management
a items
Must have: Moderate control, Purchase based on rigid
reqs., reasonably strict watch & control, moderate
safel
b items
MUST HAVE: control measure, purchase based on usage
estimate
c items
shortage cannot be circulate
vital
shortage can be tolerated for a short period
essential
: shortage will not adversely affect, but may be
using resources. These must be strictly scrutinized.
Desirable
Maintain big safety stocks
SDE ANALYSIS
BASED ON AVAILABIITY
SDE ANALYSIS
BASED ON UTILIZATION
FSN ANALYSIS
BASED ON COST PER UNIT
HML ANALYSIS
used to keep control over consumption at
department level for deciding the frequency.
HML ANALYSIS
CATEGORIZATION AND CODIFICATION
Time consuming very helpful in long run
Make stock taking easier
Helps keeping track of movements of goods
Design registers according to requirements & volume of
turn over.
2 METHODS OF DISTRIBUTION
REQUISITION, PER LEVEL
as and when required
REQUISITION
l: periodic replenishing to a certain fixed level.
PER LEVEL
Have security against data tempering
COMPUTERIZATION
PROCUREMENT OF EQUIPMENT
Point to holed before purchase of an equipment
Latest technology
Availability of maintenance & repair facility with
minimum down time
Upgrade ability
Reputed manufacturer
Availability of consumables
Low operating cost
Install action
Proper installation per guidelines
PROCEDURE FOR CONDEMNATION AND DISPOSAL
The equipment has become:
Non- functional & beyond economical repair
Non- functional & obsolete
Functional, but hazardous
Functional but no longer required
PROCEDURE OF DISPOSAL
Circulate to other units, where it is needed
Return to the vendor, if wiling to accent
Sell to agencies,scrap dealer etc.
Local destruction
AUCTION
PROCEDURE FOR CONCEMNATION
Verify records
History sheet of equipment
Log book of maintenance & repair
Performance record of equipment
Put up in proper form & to the proper authority
