Material Handling involves the movement of material, manually or mechanically in batches or one item at a time within the plant. The movement may be horizontal, vertical or combination of horizontal or vertical. Material Handling is the movement, storage, control and protection of materials, goods and products throughout the process of manufacturing, distribution, consumption and disposal. The focus is on the methods, mechanical equipment, systems and related controls used to achieve these functions. Briefly, Material Handling is the moving of materials from the raw stage through production to ultimate Customer with the least expenditure of time and effort so as to produce maximum Productive Efficiency at the lowest Material Handling cost. Material Handling is concerned with motion, time, quantity and space. Material Handling Institute describes this as follows: Material Handling is MOTION. Parts, material and finished products must be moved from store to location. Material Handling is concerned with moving Continue reading
Materials Management Concepts
Principles of Material Handling
Material Handling is the art of implementing movement of materials-economically and safely. In the classic sense, Material Handling is the act of creating Time and Place utility, as distinct from Manufacturing, which creates form utility. The proper application of Material Handling knowledge will result in the smooth integration of all the process in an enterprise into one efficient Production Machine. The principles presented here represent an accumulation of experience equivalent to untold years of practice. They are adapted from those stated in the literature, with certain changes made for clarification and with several new one added to round out the coverage of the field. In reviewing the principles it will be found that nearly every one applies to several aspects of Material Handling and aids in accomplishing one or more objectives. 1. Principle of Planning: All Handling activities should be planned. Description: If there is one principle on which all Continue reading
Make-or-Buy Decisions in Purchase Management
The make-or-buy decision is the act of making a strategic choice between producing an item internally (in-house) or buying it externally (from an outside supplier). The buy side of the decision also is referred to as outsourcing. Make-or-buy decisions usually arise when a firm that has developed a product or part–or significantly modified a product or part–is having trouble with current suppliers, or has diminishing capacity or changing demand. Make-or-buy analysis is conducted at the strategic and operational level. Obviously, the strategic level is the more long-range of the two. Variables considered at the strategic level include analysis of the future, as well as the current environment. Issues like government regulation, competing firms, and market trends all have a strategic impact on the make-or-buy decision. Of course, firms should make items that reinforce or are in-line with their core competencies. These are areas in which the firm is strongest and Continue reading
Purchase Systems and Importance of Source
In an organization all activities are carried out according to systems and procedures for reducing variations and errors arising out of individuality. This makes performing the function simple and less prone to errors. Purchase organization also consists of such systems established for smooth running of purchasing function. These systems are pre purchase system, ordering system, post purchase system. Pre Purchase System: This system lays down how purchase activity is initiated. Various activities controlled by this system are requisitioning, selection of suppliers and obtaining & evaluating quotations. Requisitions: Requisition for an item may be made by anyone in the organization. Pre purchase system prescribes separate requisition form for capital equipment as this purchase activity is controlled by a separate system. Requisition for an item shall be made in a standard format. This format ensures that indenting person furnishes all relevant information like quantity, specifications, etc. and gets the purchase authorized by Continue reading
Recent Trends and Developments in Purchase Management
Many companies are now confronted with diminishing growth opportunities, which results in a situation where an increase in turnover can only be realized at the expense of the competition and only with a great deal of effort. This leads to increased pressure on sales prices and consequently on cost prices and margins, which causes two developments. On the one hand it has resulted in shifts of power between purchasing and selling parties in many markets. Due to the fact that in many cases the market has changed from seller’s market to buyer’s market, the role of the buyer is now more dominant than a number of years ago. On the other hand the increasing pressure on sales prices and margins has resulted in an increased pressure on direct materials-related costs. Because the purchasing prices determine the sales prices in the industrial sector to a large extent, the company will be Continue reading
Purchasing Management – Meaning and Functions
The purchasing department in any organization acts as an interface between suppliers of materials and the production function. Since materials comprise one of the largest sources of cash outlay in any manufacturing firm, their acquisition requires careful management. The responsibilities of a purchasing department include learning the material needs of the organization, selecting suppliers and negotiating price, ensuring delivery, and monitoring cost, quality, and delivery performance. Occasionally the term procurement is used to describe the acquisition of goods and services. This is a broader term and includes purchasing, stores, traffic, receiving, and inspection. The principal goals of purchasing are related to quality, service, price, and vendor relations. In addition to the obvious necessity of quality purchased parts, the purchasing department must consider vendor reliability, maintenance and return policies, and other aspects of customer service. Moreover, they must continually seek new vendors and products and be able Continue reading