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Sonal Arshpreet Aman Hosp.2 Yr Uiams

The document discusses material management concepts including definitions, aims, purposes, objectives and functional areas. It describes material management as planning, organizing and controlling the flow of materials from initial purchase through operations to distribution. The primary objectives are listed as buying the best items at lowest cost and maintaining production flow and quality. Functional areas covered include purchasing, stores, print shops and pharmacy. ABC analysis is introduced as a method to exercise selective control over items based on their costs and resources consumed.

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snehakhedekar
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35 views

Sonal Arshpreet Aman Hosp.2 Yr Uiams

The document discusses material management concepts including definitions, aims, purposes, objectives and functional areas. It describes material management as planning, organizing and controlling the flow of materials from initial purchase through operations to distribution. The primary objectives are listed as buying the best items at lowest cost and maintaining production flow and quality. Functional areas covered include purchasing, stores, print shops and pharmacy. ABC analysis is introduced as a method to exercise selective control over items based on their costs and resources consumed.

Uploaded by

snehakhedekar
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Sonal

Arshpreet
Aman
Hosp.2nd
yr
UIAMS
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.
AIM OF MATERIAL MANAGEMENT

To get
1. The Right quality
2. Right quantity of supplies
3. At the Right time
4. At the Right place
5. For the Right cost
PURPOSE OF MATERIAL MANAGEMENT

To gain economy in purchasing


To satisfy the demand during period of
replenishment
To carry reserve stock to avoid stock out
To provide reasonable level of client
services
Objective of material management

PRIMARY OBJECTIVES

SECONDARY OBJECTIVES
PRIMARY OBJECTIVES
 Buying the best item at the lowest cost
 Reduction in inventory cost and High inventory
turnover
 Maintaining the flow of production

 Maintaining the consistency of quality


 Optimisation of acquisition and possession,
resulting in lower cost
 Cordial relationship with suppliers

 Maintaining good records


 Contribution towards competitiveness
 Promotion of standardisation with suppliers
 Committees to decide on economic make –
or- buy decisions
 Development of inter departmental
relationships
 Can undertake acquisitions
Four basic needs of Material
management

1. To have adequate materials on hand when needed


2. To pay the lowest possible prices, consistent with
quality and value requirement for purchases
materials
3. To minimize the inventory investment
4. To operate efficiently
 Cost can be lowered
 Controlling of indirect cost (such as materials
movement)
 Risk of inventory loss minimised (theft, pilferage )
 Control of manufacturing cycle
 Material congestion in storage places avoided
 Improvement in delivery of the product
 PLANNING (Plans for capacity or production
levels and required inventory levels
 MATERIAL UTILISATION (efficiency of the flow
of materials through the plant)
 PHYSICAL (storing, receiving and issuing of
materials and physical checking of inventory of
raw materials, work in process, finished goods,
record keeping)
 CONTROL OR FOLLOW UP (feedback and
corrective action involved)
 Selection of appropriate vendors
 Land and storage cost increase
 Difficulty in forecasting demand accurately
Scarce capital for investment in materials
inventory
 Diversification of product lines
 Optimising time and quantity for products
Management of information
Functional areas of material management

1. Purchasing
2. Central service supply
3. Central stores
4. The print shops
5. The pharmacy
6. Dietary
& Linen services
(ABC = Always Better Control)
This is based on cost criteria.

It helps to exercise selective control when


confronted with large number of items it rationalizes
the number of orders, number of items & reduce the
inventory.
Small in number, but consume large amount
of resources
About 10 % of materials consume 70 % of resources

Must have:

Tight control

Rigid estimate of requirements

Strict & closer watch

Low safety stocks

Managed by top management


Intermediate.
About 20 % of materials consume 20 % of resources

Must have:

Moderate control

Purchase based on rigid requirements

Reasonably strict watch & control

Moderate safety stocks

Managed by middle level management


Larger in number, but consume lesser amount of
resources
About 70 % of materials consume 10 % of resources

Must have:

Ordinary control measures

Purchase based on usage estimates

High safety stocks

ABC analysis does not stress on items those are less


costly but may be vital
 This approach helps the materials manager to exercise
selective control and focus his attention only on a few
items when he is confronted with lakhs of stores items.
 By concerning on ‘A’ category the materials manager is
able to control inventories and show visible results in a
short span of time
 By controlling the ‘A’ its and doing a proper inventory
analysis, obsolete stocks are automatically pinpointed.
 Many organizations have claimed that the ABC analysis
has helped in reducing the clerical costs and resulted in
better planning and improved inventory turnover.
• ABC analysis has to be resorted to because
equal attention to ‘A’ ‘B’ and ‘C’ items will not be
worth while and would be very expensive.
• Concentrating on all the items is likely to have a
diffused effect on all the items irrespective of the
priorities.
It gets harder to do correctly the longer you do
them.

Needs to be completed in the moment for the most


accuracy.

Still might reflect the biases of the data collector.

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