RAW MATERIAL MANAGEMENT

WHAT IS RAW MATERIAL MANAGEMENT?

A process that is considered part of the overall supply chain management process , and focuses on the tasks of securing the highest quality materials

The evaluation and acquisition of the raw materials, moves on through the use of those materials in the manufacturing process

APPROACH TO RAW MATERIALS MANAGEMENT

• Materials planning• Make or Buy decisions• Purchasing• Receiving and inspection• Storage• Inventory control• Distribution of materials• Transportation

OBJECTIVES OF MATERIAL MANAGEMENT

• Is to minimize cost• Procure and provide material at lowest cost• Reducing investment tied up in inventories• Purchase, receive , transport and store materials efficiently

and reduce related costs.• Continuous supply of materials• Cut down costs through simplification, standardization ,

value analysis and import substitution• Minimizing procedural delays in procuring materials

MATERIALS- QUALITY AND QUANTITY

• For the purchase of raw materials, 4 factors are considered to be essential –

- Quality

- Quantity

- Price

- Delivery time DATE

• Optimizing these factors is the essence of the material management.

RS.

FUNCTIONS OF PURCHASING DEPARTMENT

• Ordering section places orders with the vendors.

• Service section follows the progress of the purchase orders, its shipment by the vendor & its final receipt by the company.

• Records-section maintains all records of quotations, costs, purchases etc.

- Thus, purchasing involves control, coordination & communication

Problems faced in Raw Material Managment

• The quality of raw materials is not as per stds, The quality of material used has direct relationship with the end use of the product.

• Quantity is not the same as mentioned in the oder, function of purchasing department is to buy the right quantity.

• Damages occurring during transportation.• Raw Materials are not reaching on time.• Inappropriate storage of raw materials.

RAW MATERIALS MANAGEMENT OF MCDONALD

STEPS INVOLVED IN RAW MATERIALS MANAGMENT IN MCDONALD

• Procurement• Warehousing• Transportation

LIST OF SUPPLIERS OF MCDONALD

• Dynamic dairy industry (cheese)

• Trikaya agriculture (ice burg lettuce)

• Vista processed food pvt ltd. (chicken and veg range of products

• Radhakrishana food land(distribution centre- Delhi and Mumbai)

• Amrit food(long life UHT milk and milk products for frozen desserts)

Sesame seeds from Ghaziabad, Uttar Pradesh

Buns from Shah Bector & sons khooli Maharashtra,Cremica Ludhiana

Fresh Iceberg lettuceFrom trikaya agriculture, telegaconMaharashtra, Ooty farms, ootacamanduTN, meena agritech, Delhi

Cheedar Cheese fromDynamix dairy industryMaharashtra

Vegetable patty fromKiran foods, taojaMaharashtra

Special vegetarian sauce from quaker cremica, Punjab

Batter & Breading from creminca EBL,Ludhiana

2 IMPORTANT LOGISTICS DRIVE IN MCDONALD

• WAREHOUSING: The two main facilities are production sites and the storage sites. In McDonalds, because the products are perishable, storage time was minimal so as to reduce the wastage.

• TRANSPORTATION: Refrigerated vans are used here in this case.

CONCEPT OF COLD CHAIN

• A cold chain is a temperature-controlled supply chain. An unbroken cold chain is an uninterrupted series of storage and distribution activities which maintain a given temperature range. It is used help extend and ensure the shelf life of products such as fresh agricultural produce, processed foods.

• It was started by McDonalds in India.• It took 6 years.• Benefited to both consumers as well as farmers.• Helped to maintain freshness and nutritional value of raw

materials.

CAUSE AND EFFECT DIAGRAM

SUPPLIERS WAREHOUSING

UNIFORMITY COLD STORAGE

TRANSPORTATION

LOGISTICS MACHINERY

MAINTENANCE

POOR QUALITY

SOLUTIONS

• Purchase department has to keep check over the quality of raw materials

• Use of appropriate technology to check on the quantity of raw materials

• Trained staff/labor should be appointed to avoid damages, and to keep the track of the raw materials that reaches the godown on time.