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MS-56: Materials Management

MS-56: Materials Management

IGNOU Solved Assignment Solution for 2023

If you are looking for MS-56 IGNOU Solved Assignment solution for the subject Materials Management, you have come to the right place. MS-56 solution on this page applies to 2023 session students studying in PGDOM, MBA, MPB courses of IGNOU.

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Assignment Code: MS-56/TMA/JULY/2022

Course Code: MS-56

Assignment Name: Materials Management

Year: 2022-2023

Verification Status: Verified by Professor

 

Attempt all the questions and submit this assignment to the coordinator of your study centre. Last date of submission for July 2022 session is 31st October 2022 and for January 2023 session is 30th April 2023.

 

Q1) Describe the various role of materials management in the context of internal and external interfaces to the materials management system.

Ans) Materials management plays a crucial role in the efficient and effective management of materials within an organization. It encompasses various activities such as planning, procurement, storage, distribution, and disposal of materials. In today's competitive business environment, materials management has become more critical than ever before, as it impacts the overall success of an organization. In this article, we will discuss the various roles of materials management in the context of internal and external interfaces to the materials management system.

 

Internal Interfaces

  1. Procurement Management: One of the essential roles of materials management is procurement management. It involves the acquisition of materials needed by the organization to carry out its operations. The materials manager is responsible for developing a procurement plan that ensures that the organization obtains the required materials at the right time and cost. The procurement process involves identifying potential suppliers, negotiating contracts, and monitoring supplier performance.

  2. Inventory Management: Materials management is responsible for ensuring that the organization has adequate inventory levels to meet its operational needs. The materials manager is responsible for developing inventory control policies and procedures that ensure that inventory levels are optimal. The inventory management system should be designed to minimize stockouts while minimizing inventory carrying costs.

  3. Production Planning: Materials management plays a critical role in production planning. The materials manager is responsible for ensuring that the organization has the right materials, in the right quantity, and at the right time to support production operations. Production planning involves forecasting demand, scheduling production, and determining the required raw materials.

  4. Logistics Management: Materials management is responsible for the effective and efficient movement of materials within the organization. The materials manager is responsible for coordinating the transportation, storage, and distribution of materials. Logistics management involves optimizing transportation routes, selecting the best transportation modes, and minimizing transportation costs.

 

External Interfaces

  1. Supplier Relationship Management: Materials management plays a crucial role in managing supplier relationships. The materials manager is responsible for developing and maintaining relationships with suppliers that are essential to the organization's success. This involves selecting the right suppliers, negotiating contracts, and monitoring supplier performance.

  2. Customer Relationship Management: Materials management is also responsible for managing customer relationships. The materials manager is responsible for ensuring that the organization meets its customers' needs by providing the right products at the right time and cost. Customer relationship management involves understanding customer needs, developing customer-focused policies and procedures, and ensuring customer satisfaction.

  3. Environmental Management: Materials management plays an important role in environmental management. The materials manager is responsible for ensuring that the organization's activities are environmentally sustainable. This involves managing waste disposal, minimizing the use of non-renewable resources, and promoting recycling and reuse.

  4. Regulatory Compliance: Materials management is responsible for ensuring that the organization complies with regulatory requirements related to the management of materials. The materials manager is responsible for staying abreast of regulatory changes and ensuring that the organization's policies and procedures are compliant.

 

Materials management plays a critical role in the efficient and effective management of materials within an organization. It encompasses various activities such as procurement, inventory management, production planning, logistics management, supplier relationship management, customer relationship management, environmental management, and regulatory compliance. Materials management interfaces with various internal and external stakeholders to ensure that the organization's materials management system is optimized to support the organization's objectives.

 

Q2) What do you understand by “Make or Buy decision”? What is the significance of the question “Make or Buy”?

Ans) The "make or buy" decision is a strategic choice made by a company regarding whether to produce goods or services in-house (make) or purchase them from external suppliers (buy). It is a critical decision for any organization, and it involves an analysis of the company's core competencies, strategic objectives, and cost considerations. The decision can impact the company's operations, financial performance, and overall competitiveness.

 

The significance of the "make or buy" decision lies in its ability to impact the company's bottom line. By carefully considering whether to make or buy, a company can reduce costs, improve efficiency, and enhance its competitive position. The following are some of the key reasons why the "make or buy" decision is significant:

  1. Cost Considerations: The primary reason for the "make or buy" decision is to determine which option is more cost-effective. By analysing the costs associated with in-house production versus outsourcing, companies can determine which option is more cost-efficient. This analysis includes direct costs such as labour, materials, and overhead, as well as indirect costs such as training and equipment maintenance.

  2. Core Competencies: Another significant factor in the "make or buy" decision is the company's core competencies. If a company's core competencies lie in a particular area, it may be more efficient and cost-effective to produce those goods or services in-house. On the other hand, if the company lacks the necessary expertise or resources to produce a particular product or service, outsourcing may be a better option.

  3. Capacity Considerations: Another factor that companies consider when making the "make or buy" decision is their capacity. If the company has excess capacity, it may be more cost-effective to produce goods or services in-house. However, if the company's production capacity is limited, outsourcing may be a better option.

  4. Strategic Objectives: The "make or buy" decision can also impact a company's strategic objectives. For example, if the company's strategic objective is to expand its product line or enter a new market, outsourcing may be a better option as it allows the company to focus on core competencies while leveraging the expertise of external suppliers.

  5. Risk Considerations: Finally, the "make or buy" decision can impact a company's risk profile. For example, if the company relies heavily on a single supplier, it may face significant supply chain risks. On the other hand, if the company produces goods or services in-house, it may face operational risks such as equipment failure or labour disputes.

 

The "make or buy" decision is a critical strategic choice for any organization. It involves an analysis of cost considerations, core competencies, capacity, strategic objectives, and risk factors. By carefully weighing the pros and cons of each option, companies can make informed decisions that enhance their competitiveness and bottom line.

 

Q3) Distinguish between production and manufacturing. Describe the various types of industries based on this distinction.

Ans) Production and manufacturing are two related terms that are often used interchangeably, but they have distinct differences. In simple terms, production is the process of creating goods and services, while manufacturing is the process of producing physical goods. Production encompasses all aspects of creating a product or service, from design to delivery, while manufacturing is concerned only with the physical production of goods.

 

There are several types of industries based on the distinction between production and manufacturing. These industries can be broadly classified into the following categories:

  1. Service Industry: This industry is primarily concerned with the production of intangible goods or services. Examples of service industries include healthcare, education, consulting, and hospitality.

  2. Manufacturing Industry: This industry is concerned with the production of physical goods using machinery and other tools. Examples of manufacturing industries include automotive, electronics, textiles, and food processing.

  3. Hybrid Industry: This type of industry combines elements of both service and manufacturing industries. For example, a software company that produces physical hardware products would be considered a hybrid industry.

  4. Extractive Industry: This industry is concerned with the extraction of natural resources, such as oil, coal, and minerals. The extraction process is considered a type of manufacturing, as it involves the physical production of goods, but the end products are not typically physical goods themselves.

  5. Construction Industry: This industry is concerned with the construction of physical structures, such as buildings, bridges, and roads. While construction is not typically considered manufacturing, it does involve the use of physical materials and tools to produce a physical product.

 

Each industry has unique characteristics and challenges, and understanding the distinction between production and manufacturing can help organizations make informed decisions about their operations and strategies.

 

Production and manufacturing are two distinct but related concepts. Production encompasses all aspects of creating a product or service, while manufacturing is concerned only with the physical production of goods. The types of industries based on this distinction include service industries, manufacturing industries, hybrid industries, extractive industries, and construction industries. Understanding the differences between these industries can help organizations make informed decisions about their operations and strategies.

 

Q4) Briefly explain the management of spare parts. Also, explain the life cycle of spare parts.

Ans) A spare part is a component that is used to repair a damaged or worn-out machine or equipment. A machine's spare parts are used to keep it running efficiently. A car's spare parts help it run smoothly and safely, and a building's spare parts keep it structurally sound and comfortable to live in. Essentially, when a machine or vehicle needs repairing, the person who created it will send out the necessary spare parts.

 

When a part is manufactured, it generally bears the manufacturer's name, logo, number, and brand. Parts are also packaged to ensure they reach their destination without damage. Some parts are shipped in crates or boxes to avoid damage from transport. After the manufacturer sends out exported parts, some of them may make it to their intended destination without any problem. However, some parts may be damaged during transport. At this point, the original manufacturer may have to replace those damaged parts with new ones. In some cases, the damaged part may no longer be available from the original manufacturer; in that case - the part would have to be replaced by another manufacturer.

 

When a part is used, it starts its life cycle all over again. Some parts are only used once and then thrown away. Other parts are used so many times that manufacturers find ways to reuse them. For example, car manufacturers use wrench flats metal pads on the end of wrenches repeatedly. They smooth the metal edges so that they don't cut through car bolts like a regular wrench would. Some wrenches are also made with handles made from an automotive grade ABS plastic that can be chopped off and re-used when needed. Reusing parts helps save time and money while maintaining high standards of production quality.

 

A part is essential to any machinery or equipment that requires repair or maintenance. Spare parts manage easy re-use since damaged ones can easily be replaced- and new ones can be manufactured when needed. Manufacturers save time and money by having ready access to replacement parts whenever needed by following a life cycle for their components.

 

Life Cycle of Spare Parts

Planes are used for transportation and communication. They carry human beings, animals, and goods all over the world. Without spare parts, they're practically inoperable. Each part of a plane is an integral part of the vehicle's structure and must be maintained as such. Additionally, maintenance workers must know how to troubleshoot problems with parts when they occur.

 

After a plane has been brought down, spare parts are collected and inventoried. Technicians must first identify which parts are needed to re-establish flight capabilities. These are then packed into boxes and labelled with the plane's serial number and location on the aircraft. Parts arrive at the repair facility from different locations around the world via air, ship, or truck. They're stored in a spare parts room that's climate controlled and protected from moisture and light. Once collected, parts are placed in a stockroom for inventorying and storage purposes before being sent to the technician's workshop for repair work.

 

Q5) Explain why control is needed in Materials Management? Also, write the different types of control needed in materials management.

Ans) The variety of items that businesses manufacture, and sell has risen because of the development of marketing, market segmentation, and heightened competition. This has made it more difficult for the businesses' manufacturing and material management processes. When practises such irregularly extended manufacturing runs result in delays and stock outs, it assumes a significant role. Another scenario could be the management of an excessive amount of inventory. Such circumstances are likely to cause a conflict between the marketing and planning systems.

 

The performance of an organisation depends on the efficient use of its resources because:

  1. A company's main expense is its material expenditures.

  2. Cost-effectiveness requires inventory management that is in line with demand and a strategy to reduce it.

  3. A company gains a competitive edge by running with fewer inventories.

  4. Contracts must be timely executed, implemented, and administered to be effective.

  5. It is crucial to supervise and/or keep track of the movement and storage of items.

  6. Long-term existence of the organisation depends on the development of appropriate partnerships with suppliers and other organisational units.

  7. Productivity growth is an ongoing process.

  8. It's critical to guarantee client satisfaction, which includes timely and high-quality supplies.

  9. For cost-cutting, it is necessary to minimise waste and obsolescence.

 

Different Types of Control Needed in Materials Management

Depending on the specific functions, different controls are required to meet the goals of material management. These can be grouped generally into the following categories:

 

  1. Forecasting: Planning is based on forecasting, which establishes assessment assumptions about future requirements. An effective organisation depends on accurate forecasting and timely information availability. Forecasting identifies the demand for goods and services in the future. Materials managers can identify the opportunities the company is able to take advantage of based on the forecasting of changes that can be reasonably predicted to occur in the business.

  2. Purchasing and Procurement: One of the essential controls required for materials management is this one. A buying manager's duties include:

a) Reviewing requests for purchases.

b) Requesting and assessing requests.

c) Examining both existing and future suppliers.

d) Carrying out discussions with the vendors.

e) Completing, putting into practise, and managing contracts.

f) Creating projections and purchase plans.

g) Monitoring and/or supervising the movement and storage of commodities.

h) Establishing cooperative partnerships with suppliers and other organisational units.

3. Stores and Stock Control: The store is responsible for managing and regulating the flow of materials. The following categories can be used to group the crucial tasks that must be completed in this:

a) Depending on the type of material, choosing binning, raking, pallet shelving, block staking, or floor storage, etc.

b) Examination of both entering and leaving items.

c) Taking stock and choosing the best course of action.

d) Control over all warehouse operations.

4. Inventory Planning and Control: Due to the seeming high capital immediately involved, inventory management is the most important issue in material management. An ideal inventory level at a high service level must be guaranteed by effective materials management. The important factors in this are planning and control.

5. Production Planning and Control: In many businesses, material requirement planning is used. It entails tracking and prioritising, expediting and de-expediting, all the tasks associated with the purchasing area, as well as estimating lead times, standard units, discounts, replacements, vendor issues, and price increases. MRP regularly produces purchase orders using data on product design, inventory levels, and master production schedule. Like MRP, distribution requirement planning begins with the customer's demand for a product and works backward from there, using the inventory of items on hand, anticipated receipts, and anticipated order dates to create a timetable for effectively securing the supply.

 

Q6) Warehousing system has been divided into three important sub-systems. Name them and briefly explain them.

Ans) Warehousing is a term that refers to the facility where goods are stored before being sold or delivered. Warehouses are, essentially, safe and secure storage solutions that allow for extra organization and celerity. There is also warehouse software, like SAP Business One, that can assist with inventory and warehouse management, finances, item packing, shipping, and receiving.

 

But does warehousing only work for brick-and-mortar retail stores? No, it can work for ecommerce as well. For online-only businesses, the products are usually stored within a warehouse until they are ordered. At that point, the item is shipped directly from the warehouse to the consumer. Traditionally, retail items would be temporarily stored until the physical store needed to replenish stock.

 

There are three key parts to warehousing, which include warehouse management, warehouse management systems, and warehousing services or operations. Here is an in-depth look at the three parts of warehousing:

 

Warehouse Management

A warehouse needs to be strategically managed to function properly. Warehouse management includes training and overseeing the staff, safety, and security practices, maintaining inventory and equipment, and keeping relationships with shipping carriers. These responsibilities break down even further:

  1. Ensuring the best safety practices are being followed and that all safety gear is in good shape.

  2. Maintaining compliance to requirements from various agencies.

  3. Forecasting and handling projected volume and labour.

  4. Keeping goods secure and available.

  5. Completing warehouse audits when necessary.

  6. Keeping a record of inbound and outbound shipments and collecting all documentation.

  7. Providing instructions that clearly direct how to receive, unpack, retrieve, handle, and ship all items in the warehouse.

  8. Setting up bins or other storage units to maximize productivity and efficiency.

 

Warehouse Management Systems

Since running a warehouse can be overwhelming at times, there exists warehouse management system software. This software comes with tools that give more oversight and control over warehouse operations. When using a WMS, you can automate certain processes, save time, and make more money. Warehouse management systems can also optimize workload distribution, shipping and receiving, inventory tracking, and more.

 

One reason why warehousing shouldn’t be done without a WMS is the real-time insight to everything happening within the warehouse. A decent warehouse management system enables you to react faster, so you can decrease downtime and effectively strengthen weaker areas of the warehouse.

 

Warehouse Services and Operations

When a warehouse is functioning properly, the movement of goods flows seamlessly. To get that, there are principles of warehousing that need to be followed. The principles include practices such as placing an SKU on every item received and sending it to the appropriate storage location. Efficient warehouses have many benefits, such as:

  1. Productive staff

  2. Lower operating costs

  3. Happy customers

  4. On time shipping and receiving

  5. Optimized storage and space

  6. Effective use of equipment

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