5584material Planning

7/29/2019 5584material Planning

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Materials planning and control

By Priyanka

Deepali

Divya

Parineeta

Naqueeb

Sana


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What is material planning?

It is the scientific way of determining the

requirements of

rawmaterials,components,spares,andother items that go into meeting the

production needs within economic

investment.


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Importance of material planning

If the material has to be purchased in a scientific

manner.

Proper planning helps in purchasing of right qtyand quality.

Proper material planning leads to optimum use

of resources Effective material planning is nescessary for

efficent material planning mgmt.


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MRP is a tool to deal with these

problems. It provides answers for

several questions:

Whatitems are required?

How manyare required?

When are they required?


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Benefits of material planning

Avoid crisis management.

Works proactively.

Provides effective steps for manufacturing,purchasing and delivering activities.

Helps to know the prices and cost.


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Drawbacks of material planning

Can generate output problems.

Time consuming and costly.


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Factors influencing materials

planning

Micro factors

1. Seasonality

2. Working capital

3. Dilegation of powers

4. Communication

systems

5. Corporate objectives

Macro factors

1. Price trends

2. Import policy

3. Credit policy

4. Demand for items

5. Direct and indirect

taxes


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Bill of material explosion

Bill ofmaterial

Explosion chart

Requirement of materials

Delivery of schedules of

materials

a) Product

requirement

b) Product mixc) Product structure

Sales forecastingtechniques

Sales forecastSales forecastingtechniques


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Problems of material planning

Constraints regarding import policy of

government, foreign exchange, credit

availibilty. Sales forecast become less reliable


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Guidelines to be used effective

material planning

plan which products are to be produced and in

what quantities and ensure that they are able to

meet current and future customer demand

Computerisation is very nescessary as it saves

time and effort.

Cover the lead time anticipated.


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Relationship of MP with production

programe and sales forecasts

Bills of materials

Planning requirements

Delivery schedules for

material

Explosion chart

Sales forecasting

techniques

Sales forecast

Sales programes

Production programe

Sales planning

Production planning

Materials planning


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Data required for material planning

How much is required at a time.

When the quantities are required to meet

demand. Shelf life of stored materials.

Inventory status records.

Bills of materials. Planning Data.


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Material budgeting

Schedule showing how much material will be

required for production and how much material

must be bought to meet this production

requirement. The purchase depends on both

expected usage of materials and inventory

levels.


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Purpose of material budget

It helps the material mgmt department to plan its

purchases.(long term,short term)

It helps in understanding the controllable anduncontrollable elements that cause budget

variance.

Cash for procuring materials can be clearlyprojected. (year or month )


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Flexible budget

It makes use of supplementary data which

adjust variable cost in accordance with the

production levels actually experienced.


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Benefits of material budgets

Estimation of coming prices

Plans for a specific timing of purchases.

Inventory investment and associated risk can bereduced.

Provides maximum purchasing lead time.

Reduction in expediting cost and purchase work

load

Suppliers relationship can be improved.


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Material control

Material control is a systematic control over the

purchasing storing and using of material to

minimizing the possible cost. In every

manufacturing concern materials constitute an

important factor of production. It is an important

element of cost & covering 60-70 percent of the

total cost of the production.


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Importance of material control

Regular supply of material

No possibility of overstocking and

under stocking Minimum Wastage

Getting material at reasonable prices


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Role of material control manager

Lead the Materials (Purchasing, Warehousing,

Dispatch) and Planning Departments

Develop and implement supply chain strategies Ensure continuity of material supply

Looks after quality or timing issues on orders.


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Material control cycle

Material control cycle comprises of all of those

procedures which are necessary for the

provision of materials for manufacturing process

with a minimum investment and at lowest cost

possible


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Steps of material control cycle

Determining needs

Preparing requisitions

Receiving purchased material and finished parts

Inspecting and delivering the materials Entering receipts in records

issuing for production

Recording the issue in records

Entry of Receiving and issuing transactions


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Conclusion

"Manufacturing organizations, whatever their products,face the same daily practical problem - that customerswant products to be available in a shorter time than ittakes to make them. This means that some level of

planning is required." Companies need to control the types and quantities of

materials they purchase, plan which products are to beproduced and in what quantities and ensure that they

are able to meet current and future customer demand,all at the lowest possible cost. Making a bad decision inany of these areas will make the company lose money

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5584material Planning