[Completed]IMM -1 . Introduction To Material Management

1. operating enviorment

2. the supply chain concept

 

once processes exist, operation are managed so they produce good most economically.

managing the operation means planning for asd controlling the resources used in the process: labor, capital, and material.

if the right materials in the right quantities are not available at the right time, the process cannot produce what it should.

 

1. operating enviorment

 

operation enviorment works in a complex enviorment affected by many factors.

• goverment
  • regulation
• economy
  • general economic conditions influence the demand for a company's products or services and the availability of inputs.
  • all contributes to change in the marketplace.
• customers
• competition
  • competition from throughout the world
  • relatively more efficient and less costly than they used to be
• quality

order qualifiers and order winners.

customer requirements may be based on price, quality, delivery and so forth and so called order qualifiers.

for example, the price for a certain type of product must fall within range for the supplier to be considered by the potential customers.

to win the orders, a supplier must have  charateristics that encourage the custoemr tp choose its products and services over competitors.

since it is virtually impossible to be best in every dimension of competiton, firms should  in general strive to provide at least a minimal level of acceptance for each of the order qualifier but should try to be the best in the market for the order winners.

most products go through a life cycle, inclduing introduction, growth, maturity, and decline.

 

manufactuirng strategy.

operation must have a strategy that allows it to supply the needs of the marketplace and provide fast on-time delivery.

 

delivery lead time

engieer to order

make to order

configure to order

assemble to order

postponement

 

2. the supply chain concept

there are three phases to the flow of materials. raw materials flow into a manufacturing company from a physical supply system, they are processd by manufacturing, and finally, finished goods are distributed to end consumers through a physical distribution system.

product or services usually flow from supplier to customer; design, demand information, and cash usually flow from customer to supplier.

 

supply chain concepts - historical perspective

 

supplier partnerships were felt to be a major aspect of successful JIT.

great emphasis was put on trust between the partners, and many of the formal boundary mechanisms, such as the receiving/inspection activity of incomming parts, were changed or eliminated altogether.

-Mutual analysis for cost reduction

-Mutual product design

-Enhanced information flow.

 

supply chain concepts - the growth of the supply chain concept

 

to yield optimal performance for customer service and cost, it is felt that the supply chain of activities should be managed as an extension of the partnership.

1. flow of materials

2. flow and sharing of information

3. flow of funds

 

the most efficient and effectove way to manage the activities along the chain is to view each seperate organization in the chain as an extension of one's own organization.

overall, the kwy to managing such a concept is with rapid flows of accurate information adn increased organizational flexibility.

 

supply chain metrics

 

companies cannot ristk waiting to react until the order cycle is completed and feedback from customer is received.

this identifieds how a firm will compete in the marketplace. it is the customer who accesses the firm's offering by its decision to buy or not to buy. how metrics link strategy to operation is shown in figure 1.4.

there is a difference between performance measurements and performances standards.

a performance measure must be both quantified and objectives and contain at least two parameters.

for example, the number of orders per day consists of both a quzntity and a time measurement.

transforming company policies into objectives and specific goals creates performance standards. each goal should have target values.  an example of this would be to improve order fill rate to 98% measured by number of lines. performance standards set the goal, while performance measures reveal how close to the goal the organization reaches.

 

conflicts in traditional system

 

for example, the transportation department would ship in the largest quantities possible so it could minimize per - unit shipping costs. however , this increased inventory and resulted in higher inventory - carrying costs.

to get the most profit, a company must have at least four main objectives.

1.provide best customer service.

2. provide lowest production costs.

3. provide lowest inventory investment.

4.provide lowest distribution costs.

these objectives creates conflict among the markeing, production, and finance department because each has diffrenct responcibilitied in these areas.

one important way to resolve these conflicting objectives is to provide close coordination of the supply, production and distribution functions. the problem is to balance conflicting objectives to minimize the total of all the costs involved and maximize customer service consistent with the goals of the organization.

 

what is materials management?

 

the concept of having one department responsible for the flow of materials, from the supplier through production to consumer, thereby minimizing total costs and providing a better level of customer service, is know as meterlals management. as will be discussed in chapter 15,  lean production not only requires efficient individual operations but also requires all operations to work together.

 

Work in Process

 

inventory not only accounts for the raw materials and purchased components, but is also made up of the product as it processed into finished goods. this type of inventory is called work-in-process

 

manufacturing planning and control - inventory management

 

they are part of the planning process and provide a buffer against the diffrences in demand rate and production rates.

 

 

Physical supply/distribution

 

materials management is a balancing act. the objective is to be able to deliver what customer want, when and where they want it and to do so at minimum cost. to achieve the objective, materials amnagement must make tradeoffs between the level of customer service and the cost of providing that service. as a rule, costs rise as the service level increases, and materials management must find that combination of inputs to maximize service and minimize cost.

 

the overall concern of materials management is the balance between capacity and priority. materials management is responsible for planning and controlling priority and capacity to meet customer demand at minimum cost.