3.7 materials management

What is material management?

the strategy that managers use, storage and delivery of materials to ensure the right amount of inputs are available when required in the operations system

What is forecasting?

materials planning tool that relies on data from past and present and analysis of trends in order to attempt to determine future events

Advantages of forecasting (efficiency and effectiveness)

efficiency: reduce wait times, minimise wastage

effectiveness: helps operations meet cusomter demands, enhances ability to respond to changed in the market

Disadvanatges of forecasting

time consuming, potential for inaccuracies

What is just in time?

where the right amount of materials arrive just as they are needed for production

Advantages of just in time (efficiency and effectiveness)

efficiency: minimise wastage, reduce storage costs

effectiveness: improved product quality, less money tied up in idle stock, business can be responsive to market conditions

Disadvantages of just in time

increased delivery costs, higher carbon emissions, highly dependent on suppliers, vulnrable to supply chain disruptions

What is master production schedule?

a plan that details what is to be produced, in what quantities, where and when

Advanatages of master production schedule (efficeincy and effectiveness)

efficiency: reduce wait times, plan resources

effectiveness: increase cusotmer satisfaction, meeting customer demand to meet market demand

Disadvanatges of master production schedule

maintaining and monitoring requires dedicated staff, low flexibility

What is materials requirement planning?

an itemised list of all materials involved in production to meet the specified orders

Advantages of materials requirement planning (efficeincy and effectiveness)

efficiency: reduces waiting times as materials are on hand, minimise wastage

effectiveness: reduces delays ensuring cusotmer demands are met, reduced costs

Disadvanatges of materials requirement planning

requires accurate data to be effective, significant costs involved in implementation