Materials Management

Question from last lesson

Classic Cleaners specialises in supplying Australian households with washing machines and dishwashers. The company is planning to reorganise its operations as it prepares for the introduction of new models. The Operations Manager, Connie Lemnos, is investigating having some product parts manufactured in China and shipped to its Australian factories.

Identify and describe one facilities and design layout strategy that could be employed as a result of the introduction of the new models at Classic Cleaners.

Facilities and design layout strategies may include: Classic Cleaners producers white goods in a variety of models and therefore the Process or Functional Layout would be the best choice. This layout groups activities, equipment and machinery of similar nature or function together. !Award 1 mark for valid identification and description of facilities and design layout strategy that could be employed as a result of the introduction of the new models at Classic Cleaners. 

Example of a good response

Facilities design and layout refers to the way an operations system is organised. They should adopt a process layout which is required for organisations which produce a variety of products as they do produce different models. Their work stations should be grouped according to functions eg. Assembling to be done in one place and sticking of stickers in another to allow for high levels of productivity and efficient flow of the new machines through the production line.

Outcomes (What you need to know and be able to do) • Explain, in your own words, what materials ‘management’ is

about. • List the benefits of efficient materials handling. • Briefly outline the two key steps involved in materials

planning. • What is inventory? • What is the main benefit of inventory control? • Explain how the just in time approach can improve

productivity and reduce costs. • List potential problems that you can see with the just in

time approach.

Materials management is the strategy that manages the use, storage and delivery of materials to ensure the right amount of inputs is available when required in the operations system.

Inventory is the goods and materials held as stock by an organisation.

The problem with having a high inventory is that it is costly

Materials handling is the physical handling of goods in warehouses and at distribution points.

Materials Planning

A production plan is an outline of the activities undertaken to combine resources (inputs) to create goods or services (outputs).

Master production scheduling!details what is to be produced and when.

Materials requirements planning involves developing an itemised list of all materials involved in production to meet the specified orders.

Inventory control

Inventory control ensures that costs are minimised and that the operations system has access to the right amounts of inputs when required.

Just in time (JIT)

Supply Chain Management

A supply chain is the range of suppliers from which the organisation purchases materials and resources.

Supply chain is critical because

• If materials are not on hand, nothing can be produced.

• If materials are of inferior quality, it is difficult or costly to produce quality products.

• If the right quantity of materials is not available, the organisation cannot meet demand.

Exit Question

Explain Master Production Schedule.

Suggested solution !Explanation should refer to the Master Production Schedule as the detail of: • what needs to be produced • the quantity to be produced • how product will be produced • when it will be produced. !Award 1 mark for two of the points mentioned above and 1 more mark for another two of the points mentioned above.