Recommended practices for managing the information driving long-distance supply chains. Materials Handling Benchmarking The Materials Handling Benchmarking work group consists of a group of industry professionals who meet regularly to discuss material rack design, optimization of density and quality features for the effective transport of commodities into assembly plants. These companies are participating in this work group:. Cummins, Inc. Dana Corp.
Delphi Eaton Corp. Gunite Corp. Haldex Brake Products Corp. Harbinger Honda of America Manufacturing, Inc. IBM Corp. This is especially important for any organisation with either a highly automated process, or which follows the JIT just in time inventory model, where there is little room for supply errors. From sourcing to purchasing to transportation to storage, there are many nodes in the materials management network and each comes with a cost.
By taking time to track the data from each of these sources, a materials manager may be able to see where inefficiencies are occurring thus increasing costs , or where a less-expensive alternative may be possible i. Inventory turnover is a highly useful metric for determining how quickly your business turns over its entire stock in a set time period.
A high inventory turnover i. Learn more: How to Calculate Inventory Turnover. For many manufacturers, what comes out is equal to what goes in. Fluctuations in the quality of components could lead to fluctuations in the quality of products, which may harm customer satisfaction down the line. As such, materials managers must work to ensure continuity of materials quality to better guarantee a desirable end result. Finally, the importance of a strong supplier network cannot be overstated.
Building strong relationships with key suppliers can lead to a variety of benefits, for example, VIP customer discounts, stronger negotiating positions, or even just making life a little easier by reducing friction. Given that both terms seem related to the flow of goods from the origin point to selling manufactured products, it would appear at first glance that materials management and supply chain management are redundant terms — more or less the same.
In a sense, they are. Downstream, it extends through more logistics companies and distribution centres until it gets to the business that sells your products, then on to the end-users themselves. To put it in short, materials management is a logistical function, which forms just one component in the supply chain.
Read more: How to implement a supply chain management system. Whereas materials managers are concerned specifically with the continuity of materials supply whether direct or indirect , logistics managers have a wider scope. Their objectives also include activities associated downstream, for example order fulfilment, product delivery and quality assurance related to transport.
A common category of software used by materials managers is MRP. This is a very manufacturing-focused tool designed to help specialists in that area understand and quantify those five Rs we mentioned areas — essentially, what goods are needed, where are they coming from, when will they arrive and how much are they costing? Your bill of materials is key to effective use of MRP software.
This goes onto the bill of materials, which goes into the MRP system and helps a manager source the right supplies. Enterprise resource planning ERP software is commonly used across sectors, manufacturing included, as it is a tool capable of creating a highly accurate cross-section of an organisation in order to monitor, essentially, its every component. When an organisation uses ERP software, multiple departments will have a module in the system that they update with key information, such as financial data, stock levels, customer demand, and so on.
This can help the organisation track its sales from entry point supply to exit point selling the finished product , and all the costs that come in between.
For example, ERP will not just factor supply and inventory but also CRM, supply chain management, sales data, scheduling and more. ERP is an integrated software that combines multiple arms of the business, whereas MRP tends to operate as a standalone service.
While this may make it feel like ERP is better as it includes more, many organisations choose an MRP service instead because MRP providers are highly specialised and therefore offer a suite of manufacturing-specific tools. That said, the flip side is that MRP operates alone and therefore its data may not readily plug into other parts of the business.
It also may be quite heavy software for, say, a smaller business, or a business with a smaller manufacturing component. Logistics management is a small portion of Supply Chain Management which combines the flow of goods, services, information and capital right from raw material to its final consumer. While Supply Chain Management is a broader term which is associated with the sourcing of raw material, procurement of consumer requirements, conversion into final products and delivering on time at consumer end Logistics Management.
This article will help you understand the difference between Logistics Management and Supply Chain Management. With the ever-increasing need for business managers who can manage complex global supply chain trends spanning around the world, effective supply chain management is considered to provide an essential competitive advantage.
In the world of connectivity and speed, specialization in global supply chain management would enable students to understand the logistics, production and processes involved in the business.
With the objective of developing the business leaders of tomorrow, the Institute is seeking candidates with more than three years of experience. It is uniquely conceived to ensure professionals acquire the business tools, global mindset and interpersonal skills to pursue their careers.
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