Shrichakradhar.com 9958947060 ASSIGNMEN’ Course Code > MMPO-006 Course le : Materials Management Assignment Code: MMPO-006/TMA/ JULY/2023 Coverage All Blocks Note: Attempt all the questions and submit this assignment to the Coordinator of your study centre, Last date of submission for July 2023 session is 31° October, 2023 and for January 2024 session is 30" April 2024. 1. “Materials management contains an integrated process of materials flow, in, through and out of an organization”. Comment on it and talk about the reasons behind it 2. Why customer service, packaging and production scheduling are considered to be inter- functional management activity? How can they be managed effectively within a functionally organized firm? 3. What is supplier evaluation? Discuss the review process for rating of suppliers. Also, explain why the relationship between the buyer and seller is of immense importance? 4, “Recent developments in the area of codification include barcodes which help in keeping count of stocks”. Comment on the statement. Also, explain the steps for devising a barcode fora business. 5. Explain the concept of Kanban and its usefulness. How does CONWIP differ from Kanban? Disclaimer/Special Note: These are just the sample of the Answers/Solutions to some of the Questions given in the Assignments. These Sample Answers/Solutions are prepared by Private Teacher/Tutors/Authors Meenakshi Sharma for the help and guidance of the student to get an idea of how he/she can answer the Questions given the Assignments. We do not claim 100% accuracy of these sample answers as these are based on the knowledge and capability of Private Teacher/Tutor Meenakshi Sharma. Sanpple answers may be seen as the Guide/Help for the reference to prepare the answers of the Questions given in the assignment. As these solutions and answers are prepared by the private Teacher/Tutor so the chances of error orShrichakradhar.com 9958947060 mistake carmot be denied. Any Omission or Error is highly regretted though every care has been taken while preparing these Sample Answers/ Solutions. Please consult your own Teacher/Tutor before you prepare a Particular Answer and for up-to-date and exact information, data and solution. Student should must read and refer the official study material provided by the university. 1. “Materials management contains an integrated process of materials flow, in, through and out of an organization”. Comment on it and talk about the reasons behind it, ANS: The study of materials management began to aequire popularity in the early 1960s and has since grown in significance. Giveu that the whole cost of the materials is larger than the total cost of the workers, machines, and processes, the importance of the materials must be siguificant. It is the most practical area that can provide chances for cost-cutting and profit- improving prospects. Materials increase the worth of a product sinee they have a direct impact onits quality. Thus, materials management can be viewed as a systemthat ensures that products are available to customers at a reasonable price. Ina word, materialsmanagement is the process of manufacturing the appropriate materials, in the appropriate quantities, at the appropriate prices, at the appropriate times. The functions of the materials management are materials planning and control, purchasing, inventory control, store keeping, material handling, warehousing, standardization & simplification and organization & appraisal of materials According to Duita (1998), “When we say that materials management contains an integrated process of materials flow, in, through and out of an organization, we give some indication that materials management has interfaces of two Kinds, internal and external”. Materials management actually does uot start with purchase of materials and end with production of materials. The total material management concept forces itto do much more. INTERNAL Market forecasting Forecast demands to determine production on thie basis of existing/expanded facilities, equipment, processes, manpower and materials. Production Materials flow begins before the production cycle, runs throughout and continues even after production, ensuring uninterrupted flow of materials to feed the production process Finance Materials budget is affected by nonavailability of finance. A major chunk of finance is invested in materials and inventories, Inventory control Materials management has a ¢ritical role here as availability of materials and access to physical supply has to be assured: Inspection and quality control Close liaison with materials management is required as it also runs throughout like materials. Materials Handling and physical distribution logistics Materials management ensures that materials are physically distributed at the right time with a minimum of handling EXTERNAL Consumers/ Customers Material management interfaces with customers rarely but it happens sometimes, Suppliers/ Other Companies Materials Management is responsible for keeping a close liaison with outside vendors and other companies seeking trade relationships. Evaluation of supplier performances should also be done. The vendor or supplier from whom the material is to be purchased initiates the material flow. The stuff is received and examined after it has been purchased. It is accepted by retailers afterShrichakradhar.com 9958947060 inspection. The materials are needed as and when they are needed by the production/manufacturing system and its subsystems. After that, logistics assumes control. Then comes warehousing and customer service. There is constant flow of information. You can see that information flow encompasses a lot more than material flow does. Whether it involves sales and marketing, inventory management, or purchasing and procurement procedures. Decision-information is therefore necessary for the materials flow to be effective If an organization can control these two flows easily and effectively then it will render goods products at a low cost and also would be able to offer good service 2. Why customer service, packaging and production scheduling are considered to be interfunetional management activity? How can they be managed effectively within a ; 2 ANS: If a company has high standards for customer service, large logistics expenditures as a percentage of overall costs, and an effective logistics operation rumby knowledgeable staff, partnering with or outsourcing logisties operations is probably not going to be very beneficial. Performing logistics-related tasks internally is better. Due of its efficient supply chain, Wal- Mart is a firm that possesses these qualities. On the other hand, outsourcing the logistics activities to third-party providers may well result in significant cost reductions and customer service improvements for those businesses where logistics is not the centre of strategy and a high level of logistics competency is not supported within the firm, Dell computer consider its core competencies to be marketing and manufacturing of high-technology pe hardware rather than logistics. This direct marketing fim contracts with several third-party logisties providers to coordinate distribution firm in geographical areas, The basic issue in logistics organization is how to achieve coordination or cooperation among activities, functions, and firms so that logistics plans can be implemented effectively. Organization should facilitate optimum logistics performance and is, in general, guided by total cost concept, except when customer service or information strategies dominate:"The organization should be considered on three levels. Grouping relevant activities together and managing them collectively as a logistics function has received the greatest attention. In certain cases, the payoffs have been great as a result of this activity realignment. Much less-considered have been the problems of inter functional and inter organizational cooperation. The potential benefits may far exceed those from direct activity management However, achieving cooperation among functions within firm and among firms beyond their legal boundaries, when cooperation is likely to be largely voluntary, is a highly complex organizational problem. Undoubtedly in the future, logisties organization at all levels will choose cooperation as a general theme for organizational effectiveness rather than simply, selecting formalized organizational structures that create as many coordination problems as they resolve. As an alternative to perfonning all logistics task in-house and, therefore, needing extensive logistics organization, many firms have sought to outsource logistics activities or to form logistics partnership and share their logistics systems with other firms, Advocates have argued that such a strategy can lead to reduce costs and improved customer service, while allowing the firm to focus on its core competencies. Those opposing the strategy'cite loss of control of the logistics activities and a resulting deterioration in customer service. This also leads to knowledge gap which needs to be filled consciously. Products may have a number of issues due to improper packaging, including exposure to moisture, sunshine, or previous use. Similar to this, improper product storage not only results in inaccurate records but also harms other products. The product will become harmed and need to be rejected if frozen goods are kept on pallets at a moderate temperature. Due to improper storage, merchandise warehouses experience issues with ghost inventory in terms of size and colour. Food products can have problems like the offensive fragrance of nearby goods or begin to spoil owing to incorrect storage, shelf life, etc. These issues can be avoided by implementing a few preventive steps, including asShrichakradhar.com 9958947060 Given the volume of data and the quantity of computations needed, a computer-based factory planning aud control system is almost a given. If a computer is not used, performing computations manually involves a large amount of time and labour, which forees a corporation to make compromises, The organisation may need to extend lead times and increase inventory in order to make up for the inability to swiftly schedule what is needed and when, rather than scheduling requirements through the planning system. The system is intended to operate as a fully integrated planning and control system that gets input from both the top down and the bottom up. Strategic business planning integrates marketing, finance, and production plans to create plans that aim to achieve the company’s overall goals. As a result, master production scheduling, material requirements planning, and production activity are all affected. Control and purchasing are aimed at achieving the production goals. and strategic business plans, as well as, eventually, the company If priority plans must be made, Because of capacity issues, changes can be made at any of the planning levels. Should be reflected in the higher levels as a result, feedback must be provided throughout the process. System, : supplier evaluation A buying company must carefully choose where to focus its supplier development efforts because not all chosen suppliers are eligible for development support. Results of supplier evaluations might reveal important details regarding general areas where performance has to be improved, Ratings, rankings, and certificates are Some,possible formats for supplier evaluation, It might also depend on timely material delivery, such as when just-in-time delivery is used. A solid review system must exist before a Supplier assessment system can be implemented. Finding suppliers who share the’same aim and vision as well as providing the necessary items marks the beginning of the,process, Numerous elements that might be important for evaluating a supplier shouldbe recognised. Rating or ranking system are both possible. The rankings can be weighted as per the importance level allocated to each factor The process of evaluating suppliers is quite complicated as the parameters maybe conflicting or maybe difficult to measure, Evaluation should be an ongoing process and must be undertaken at timely intervals. Mostof the buyers) require a continuous improvement of the suppliers, Few important techniques of stpplier evaluation are cost based approach, categorical approach and weighted approach. Amongst the three approaches, categorical approach is, subjective as there are no weightt§ associated while cost based approach is objective as it takes into account hidden and non hidden costs, Total Cost of Ownership approach takes into account each type of cost associated with a product. These costs may be hidden, quality related, administrative, lifecyclepvalueladded, service costs and so on. This approach examines the cost incuired as a whole rather than only tangible costs. This method is slightly complex and difficult to implement. review process for rating of suppliers Under the periodic review process, the order quantity equals the difference between ROL and quantity in stock. That is, Order quantity = ROL - Quantity in stock The time intervals for inventory review are fixed, say monthly review — on the last date of the month, The time interval is one month, Under the continuous review process, orders a fixed quantity when the inventory level falls below the ROL. Here the time to place au order varies, but the amount ordered every time is fixed. The BOQ is prescribed for the quantity to be ordered. relationship between the buyer and seller is of immense importance Transactions are improved by the dynamic relationship between the buyer and vendor. Their behaviour, perceptions, and roles all influence how they interact. The buyer, the seller, or their agent may engage in these transactions. While purchasers’ primary goal is to make money,Shrichakradhar.com 9958947060 sellers concentrate on designing products that meet those wants. The goal of relationship marketing is to build close emotional connections between buyers aud vendors. Amicable discussions in a transaction are prefeired in order to forge long-lasting relationships and to gain from them. Negotiation aids in debt reduction, price reduction, better agreements, and contract term negotiating. Sales negotiation aids in comprehending client needs, maintaining clients, and analysing contract terms and conditions. Supplier selection has now become an important task and there are various techniques for identifying, selecting, evaluating and developing suppliers. These approaches can be related to ranking, rating, cost or quality checks. The relationship between the buyer aud seller is of immense importance and a balance has to be achieved for long term fulfilling mutual benefits, « ~ keeping count of stocks”. Comment on the statement. Also, explain the steps for devising a barcode for a business, ANS: BARCODE: Recent developments in the area of codification include barcodes which help in keeping count of stocks. Barcodes are an accurate and effective way of inventory management. At times there are confusions with respect to labelling in an organization, which may lead to collecting wrong items from the stock. This can be taken care of by introducing the barcode inventory system. Bar codes were introduced in 1951 but they were widely adopted only in mid 1970 when supermarkets started using them. Now they were referred to as universal product codes (UPC). These codes are visual representation off data. They use lines and spacing they can be easily read by scanners. In a UPC barcode, there is information, pertaining to the product and manufacturer. It is a one dimensional barcode. These days'there are more than 30 barcodes with different applications. A QR code for example is a twoidimensional barcode. It can store much more information than a UPC like pricing and shipping details. Barcodes assist in tracking inventory, setting safety stocks, checking reorder points, determining economic order quantity and starting a perpetual inventory system. For barcode inventory management there is a need to select the need for it for the organisation. For instance, it can be order fulfilment, speedy delivery, accounting, theft protection and so on. There is also a need for having required software and hardware for manging the barcodes. At a basic level, a bareode is a square or rectangle with a combination of yertical black lines of varying thickness and height, white space and numbers that together identify specific products and their relevant information, Computers linked to scanners ¢an read these codes and use the exact combination of bars, spaces and numbers to retrieve the data for that product. Today, barcodes are found on not only household items that come from supermarkets or retail stores, but licenses, rental ears, checked luggage and hospital bauds. In each case, they identify a product or person and encode important details. Barcodes save time and money because they can be read by a scanner, either a handheld device or one built into a checkout station, instead of an employee having to manually key in produetinformation. There are two primary. types of barcodes: one-dimensional (1D), like those found on food packaging ora shampoo bottle, and two-dimensional (2D), like a QR code on an advertisement that directs the user to that company’s website. Most scanners can only read 1D, or linear, barcodes, and they remain the most popular format; more on ID vs. 2D codes later Two of the most common types of linear barcodes are the Universal Product Code (UPC) in the U.S. and the European Article Number (EAN) in Europe. How Bareodes Work The width of the black bars usually represents the numbers 0 or 1, while the sequence of those bars signifies a number between 0 and 9. A computer connected to the scanner has all the information on what item is associated with that unique combination of bars and spaces andShrichakradhar.com 9958947060 may add, multiply or divide those numbers to identify the comect product, which shows up on the screen. Ina warehouse, the barcode might encode an item’s size, color and other attributes, as well as its location, so the company has a detailed view of current inventory and can quickly fulfill orders or conduct physical inventory counts, In a retail setting, this information could include the product name and price that an associate needs to check out a customer. Organizations can use barcodes to track goods throughout their life cycle, from manufacture to distribution to purchase to service and repair steps for devising a barcode for a business: Step 1: Select the barcode ‘A barcode must be chosen based on the organization's requirements. For example, UPC, QR, SKU, and B2B sales. Additionally, the barcodes may be industry-specific, Consider the publishing of books, supply chain management, logistics in the healtheare industry, electronics in the public sector, and retail. The size of the barcode also influences the choice of barcode Step 2: Barcode specifications It is necessary to specify te barcode's requirements. As am ilhistration, consider the category for which it is necessary, such as raw materials, finished. goods, commodities for resale, packing, and maintenance, repair, and operation (MRO) supplies. Additionally, this labelling helps with accounting procedures, keeping track of physical inventories, and setting prices Step 3: Bareode information The information which can be stored and retrieved throtghya barcode includes description of item, its name, colour, size, category, cost, supplier information and store location. Step 4: Software and Hardware To implement barcode scanning, selecting) appropriate software and hardware is very important. The scanners for barcodes can be wireless, portable or fixed. Step 5: Implementing Barcode process To implement barcode progesses, itis important to define the use of barcodes, the location of items. It is also important to identify key performance indicators and train employees. §. Explain the concept of Kanban and its usefulness. How does CONWIP differ from Kanban? ANS: KANBAN ‘Card! orsignal’ are both translated as ‘katiban! in Japanese. The kanban system is a pull-based scheduling method that uses kanbans, or cards, transmitted from a downstream operation to start production (or supply) at a supplier-controlled upstream activity. A signalling device is used by a kanban control system to manage JIT flows. Kanban is the Japanese word for "sign" or "instruction card." Cards could be replaced with containers in a paperless control system. The kanban pull system is nade up of the cards or containers. Upstream operations have the power to generate or provide more parts. Workers create in accordance with the schedule, yet they operate entirely manually thanks to Kanbans. Kanban is intrinsically a system for repetitive manufacturing. Also, since each daily assembly schedule must be very similar to all other daily schedules, it becomes essential to be able to freeze the MPS fora fixed time period, generally at least one month. The final assembly schedule must, thus, be very level and stable Kanban will not succeed without modification in a batch production (non-repetitive manufacturing) enviroument. It requires a leveled schedule, standard containers and very strict discipline. It may be considered inflexible in that it cannot easily respond to irregular changes (in the MPS) and to large unexpected changes in market demand, Also, the implementation of Kanban scheduling requires great cooperation from outside suppliers (recall supplier’s flexibility in the definition). Moreover, from the perspective of the manufacturing process, it places emphases on process technologies, stich as produtct-based flow configurations, and may,Shrichakradhar.com 9958947060 therefore, require considerable investment of time and money in developing new production methods, procedures, jigs, fixtures, etc. and perhaps even new capital equipment. CONWIP differ from Kanban Constant work in Process (CONWIP) limits WIP via cards as similar to Kanban systems Kanban cards part number specific, while CONWIP cards are line specific. However, from a pull perspective, CONWIP cards limit WIP in the same manner as Kanban cards. CONWIP uses cards to control the number of WIPs. For example, no partis allowed to enter the system without a card (authority). After a finished part is completed at the last workstation, a card is, transferred to the first workstation and a new part is pushed into the sequential process route. Spearman et al. (1990) proved the potential of COWIP systems in controlling WIP numbers as compared to Kanban systems. Traditionally, Kanban has been useful for a production system with less variety; however, the system has been modulated to cope with high variety product manufacturing systems. One such Kanban variant is the CONWIP!or the Constant Work in Process approach. Unlike Kanban, there is no fixed part identification number in the CONWIP approach. Here, a temporary number is used to identify the different parts required for the particular variety of the product. Kanban’s approach allows monitoring of the system with minimal human intervention as the component or parts of the Stages and the workstations are predetermined. However, CONWIP requires human intervention to trigger the next step of the operation. Kanban works well with high-quantity low-variety parts. Since every card has a part number permanently associated with the card, the cards always replenish this part number. Of course, this works only if there is a continuous demand for this particular part number. A good example of this would be any made-to-stock parts'that will be sold in larger quantities. On the other hand, if you produce to order, a kanban will have difliculties. If every product you make is unique, then you would need a unique kanbam for this product. But since kanban are always assigned a part number, this will be difficult CONWIP, on the other hand, has no part aiumber a8signed by default to the CONWIP card. Heuce, any part number can be assigned (temporarily) to the CONWIP patt, even if the patt is, produced only once. Therefore, CONWIP is well stited for made-to-order parts. However, for made-to-stock production, you need a good production sequence or you may end up in hot water with CONWIP