PPT on Material Management in Industrial organization and Management

Material management in IOM (industrial organization and management)

1. Materials Management..

2. Learning outcomes Plan Inventory for processes. Calculate Economic Order Quantity (EOQ). Practice Purchase procedure.

3. Definition Materials Management is planning, directing, controlling, coordinating the kind, amount, location, movement & timing of various commodities used in production by industrial enterprises. Deals and regulates flow of material in relation to changes in variables like demand, prices, availability, quality, delivery, schedules..

4. Objectives

5. Inventory Inventory: An inventory is a record of all goods or materials procured, received, stored and used in the organization (industry) An Inventory is a detailed list of materials, their specifications and standard number or quality.

6. Definition: Economic Order Quantity (EOQ) is a production formula used to determines the most efficient amount of goods that should be purchased based on ordering and carrying costs.

7. Economic Order Quantity (EOQ) By using this model, the companies can minimize the costs associated with the ordering and inventory holding. It can be a valuable tool for small business owners. To make decisions about how much inventory to keep on hand, how many items to order each time, and how often to reorder to incur the lowest possible costs. There are two most important categories of inventory costs are ordering costs and carrying costs.

8. It is a measurement used in the field of Operations, Logistics, and  Supply Management . In essence, EOQ is a tool used to determine the volume and frequency of orders required to satisfy a given level of demand while minimizing the cost per order. The Economic Order Quantity is a set point designed to help companies minimize the cost of ordering and holding  inventory . The cost of ordering inventory falls with the increase in ordering volume due to purchasing on  economies of scale . However, as the size of inventory grows, the cost of holding the inventory rises. EOQ is the exact point that minimizes both of these inversely related costs.

9. Ordering cost

10. Carrying cost

11. EOQ Cost Model

12. ABC Analysis

13. ABC Analysis

14. ABC Analysis

15. Steps for ABC Analysis A stock manager can perform   ABC calculations on both individual product groups or a wide range of inventory. An ABC Calculation is usually carried out within five steps, which are as follows- 1. First, multiply the annual number of products with each item's cost and find the utility of that product. Make a category of every product in the descending order based on its usage value.  Add the usage value of the products, including the total number of items.  Find out the cumulative percentages of items sold and annual consumption value.  Now, it's time to divide your data into three categories, finally, in an approximate ratio of 80:15:5. 

16. Just-in-time (JIT) Just-in-time, or JIT, is an inventory management method in which goods are received from suppliers only as they are needed. The main objective of this method is to reduce inventory holding costs and increase inventory turnover.

17. JIT Just in time requires carefully planning the entire supply chain  A just-in-time strategy eliminates overproduction Warehousing is expensive, and excess inventory can double your holding costs. In a JIT model, the manufacturer has complete control over the manufacturing process, which works on a demand-pull basis. Since just-in-time requires you to start manufacturing only when an order is placed, you need to source your raw materials locally as it will be delivered to your unit much earlier. In a JIT model, only essential stocks are obtained and therefore less working capital is needed for finance procurement.

18. Five S’s (5S)   5S is defined as a methodology that results in a workplace that is clean, uncluttered, safe, and well organized to help reduce waste and optimize productivity. Seiri :   (SORT) To separate needed tools, parts, and instructions from unneeded materials and to remove the unneeded ones. Seiton :( SET IN ORDER)   To neatly arrange and identify parts and tools for ease of use. Seiso :   (SHINE) To conduct a cleanup campaign. Seiketsu : (STANDARDIZE)  To conduct  seiri ,  seiton , and  seiso   daily to maintain a workplace in perfect condition. Shitsuke :   (SUSTAIN) To form the habit of always following the first four S’s.

19. Kaizen Kaizen is an approach to creating continuous improvement based on the idea that small, ongoing positive changes can reap significant improvements.

20. Six Sigma Six Sigma  is a set of management tools and techniques designed to improve business by reducing the likelihood of error. It is a data-driven approach that uses a statistical methodology for eliminating defects.

21. Five key principles Focus on the Customer Measure the Value Stream and Find Your Problem Get Rid of the Junk Keep the Ball Rolling Ensure a Flexible and Responsive Ecosystem

22. Th a nks ! 47