Post on 17-Aug-2015
description
Procurement And Materials Management Procurement And Materials ManagementIt Is Not Always Economical For The Companies To Make All The Materials Used In Manufacturing.ome Items Are !rocured From "thers# And ome Are !roduced In The Company. Procurement And Materials Managementome $easons For Making%& 'ower !roduction Cost& Unrelia(le "r Unsuita(le uppliers& Assure Ade)uate upply *+uantity,& Utili-e urplus 'a(or Capacity& "(tain .esired +uality& !rotect pecial .esign "r +uality Procurement And Materials Managementome $easons For Buying%& 'ower Ac)uisition Cost& Inade)uate Capacity& $educe In/entory Costs& Ensure Alternati/e ources "f upply& Item Is !rotected 0y A !atent "r Trade 'icense Procurement And Materials ManagementChoosing 0etween Making or 0uying An Item Is 'argely .ependent "n The Vertical Integration trategy "f A Company. Procurement And Materials Management0y 1ertical Integration# 2e Mean .e/eloping The A(ility To !roduce 3oods "r er/ices that are !re/iously !urchased.It Can Take The Form "f Forward "r 0ackward Integration% Procurement And Materials Management Procurement And Materials Management0ecause !urchased Items $epresent A 'arge !art "f The Costs#Many "rgani-ations Find Interest In 1ertical Integration.For e4ample# Murat Ticaret "riginally !roduces Ca(le. Then It tarted !roducing Ca(le Cords For Automo(iles *"tosan# .odge# "toyol# Etc., Procurement And Materials Management1ertical Integration Is Ad/entageous 2hen The "rgani-ation 5as 'arge Market hare.0ackward Integration May 0e .angerous For Firms In Industries Undergoing $apid Technological Changes. Materials Management!urpose "f Materials Management Is To "(tain E6ciency "f "perations Through Integration "f 7, Material Acquisition# 8, Material Movement, and 9, Material Storage. Materials Management2hen Transportation And In/entory Costs Are u(stantial# A Focus "n Materials Management Is Appropriate. Materials Managementome 0asic Functions "f Materials Management%& hipping& !urchasing& 2arehousing *$aw Material# 2ip# End Material,& "rder !rocessing& !roduction And In/entory Control Materials Management"ne of the ma:or issues that materials managers might encounter is the method of Procurement. Materials Management!rocurement method is the way of ordering material.ome of the new de/elopments in this area include%7, Electronic "rdering8, tockless !urchasing9, tandardi-ation# and;,