2. Materials Management ActivitiesAnticipating materials requirements
Sourcing and obtaining materials
Introducing materials into the organization
Monitoring the status of materials as a current asset
3. Objectives of Integrated Materials Management Low costs
High level of service
Quality assurance
Low level of tied-up capital
Support of other functions
4. Differences Between Inbound and Outbound TransportationMarket demand that generates the need for outbound movement is more uncertain and fluctuating
Inbound transportation tends to involve bulk raw materials, supplies, or parts
Firms exercise less control over inbound transportation due to total delivered pricing programs
6. Total Quality Management (TQM) the application of quantitative and human resources to improve the material services supplied to an organization, all the processes within the organization, and the degree to which the needs of customers are met - now and in the future.
7. Administration and Control of Materials FlowKanban/Just-in-time systems
Kanban (Toyota Production System)
JIT & JIT II
MRP systems
Materials requirements planning (MRP I)
Manufacturing resource planning (MRP II)
DRP systems
Distribution requirements planning (DRP I)
Distribution resource planning (DRP II)
8. Benefits Resulting from Implementing Just-in-TimeImproved inventory turns.
Improved customer service.
Decreased warehouse space.
Improved response time.
Reduced logistics costs.Reduced transportation costs.
Improved quality of vendor products.
Reduced number of vendors.
Reduced number of transportation carriers.
9. Elements of an MRP I System Inventory
transactionsCustomers’
ordersForecastsEngineering
changesMaster production
schedule (which
products to produce, in
what quantity, and when)Bill-of-materials file
(product structure
and routing)Inventory status
file (finished items,
work in progress,
planned orders)Planned schedules
and various
other reportsMRP I
systemSource: MCB University Press Ltd., Amrik Sohal, and Keith Howard, "Trends in Materials Management," International Journal of Physical Distribution and Materials Management 17, no. 5 (1987), p.11.
10. Elements of an MRP II SystemMaterials
requirements
planning
(MRP)Capacity
requirements
planning
(CRP)Execute
capacity plansExecute
material plans
Realistic
?Order
(production plan)Order
(production plan)Inventory
recordsYesNoSource:Karl A. Hatt, ‘What’s the Big Deal about MRP II?” Winning Manufacturing 5, no. 2 (1994), p. 2.
11. Elements of a DRP II System Source: “How DRP Helps Warehouses Smooth Distribution,” Mondern Materials Handling 39, no. 6 (April 9, 1984), p. 53. Modern Materials Handling, copyright 1984 by Cahners Publishing Company, Division of Reed Holdings.Distribution
centerDistribution
centerDistribution
centerDistribution
centerCustomersDistribution
centerDistribution
centerRegional
warehousePlant
warehouseRegional
warehouseDistribution
resource planning7-11 a
12. Elements of a DRP II System (cont.)Source: “How DRP Helps Warehouses Smooth Distribution,” Mondern Materials Handling 39, no. 6 (April 9, 1984), p. 53. Modern Materials Handling, copyright 1984 by Cahners Publishing Company, Division of Reed Holdings.Plant
warehouseFinal assembly
(manufacturing)Subassembly BSubassembly CSubassembly APart CRaw materialsPart CPart DPart BPart EPart AMaterial requirements planning7-11 b