CHAPTER 4

SAMPLE ACTIVITIES/ASSESSMENTS

1. Explain the objectives of materials management

- it is one of the processes of businesses that is used by businesses to organize, plan, and manage
the actions they take to manage the tangible elements of their business processes. It also helps
ensuring a supply of materials with optimized inventory levels and the least amount of variance
between the results expected and those achieved
.
The main objectives of materials management are:
 To minimize material cost – it will help to increase the profitability of the
organization
 To purchase, receive, transport and store materials efficiently and to reduce the
related cost – Material management makes sure resources are delivered, kept, and
quickly accessed in warehouses so they may be used for manufacturing without any
delays.
 To cut down costs through simplification, standardization, value analysis, import
substitution, etc. - Once the cost of inventory is reduced and the purchase of
components and goods is standardized, manufacturers can significantly lower their
purchasing expenses.
 To trace new sources of supply and to develop cordial relations with them in order to
ensure continuous supply at reasonable rates - this provides continuous supply of
materials to production process and enables timely production.
 To reduce investment tied in the inventories for use in other productive purposes and
to develop high inventory turnover ratios.- With effective material management,
businesses may avoid overstocking and reorder inventory just in time. They can also
save money on related expenses, increasing their liquidity and available working
capital.

2. What are the functions of stores?

The functions of stores can be classified as follows:

 To receive raw materials, components, tools, equipment’s and other items and
account for them.
 To provide adequate and proper storage and preservation to the various items.
 To meet the demands of the consuming departments by proper issues and account for
the consumption.
  To minimize obsolescence, surplus and scrap through proper codification,
preservation and handling.
 To highlight stock accumulation, discrepancies and abnormal consumption and effect
control measures.
 To ensure good housekeeping so that material handling, material preservation,
stocking, receipt and issue can be done adequately.
 To assist in verification and provide supporting information for effective purchase
action.

3. Explain the reasons for keeping inventories.

 To stabilize production - The inventory is maintained to take attention of this

variation to ensure smooth output.
 To take advantage of price discounts - inventory is kept in order to improve
purchasing efficiency.
 To meet the demand during the replenishment period - inventory is kept on hand to
meet demand during the period of purchasing (replenishment).
 To prevent loss of orders (sales) - To avoid the need for companies to keep
inventories
 To keep pace with changing market conditions- The organizations must prepare for
the
businesses must store materials in preparation of a change in market sentiment and
the non-availability of materials or a sharp price increase

4. What are the objectives of inventory control?

 To ensure adequate supply of products to customer and avoid shortages as far as

possible.
 To make sure that the financial investment in inventories is minimum (i.e., to see that
the working capital is blocked to the minimum possible extent).
 Efficient purchasing, storing, consumption and accounting for materials is an
important objective.
 To maintain timely record of inventories of all the items and to maintain the stock
within the desired limits.
 To ensure timely action for replenishment.
 To provide a reserve stock for variations in lead times of delivery of materials.
 To provide a scientific base for both short-term and long-term planning of materials.

5. What are the benefits of inventory control?

 Improvement in customer’s relationship because of the timely delivery of goods and
service.
  Smooth and uninterrupted production and, hence, no stock out.
 Efficient utilization of working capital. Helps in minimizing loss due to deterioration,
obsolescence damage and pilferage.
 Economy in purchasing.
 Eliminates the possibility of duplicate ordering.

6. What are the objectives of codification?

The objectives of a rationalized material coding system are:

 Bringing all items together.
 To enable putting up of any future item in its proper place.
 To classify an item according to its characteristics.
 To give an unique code number to each item to avoid duplication and ambiguity.
 To reveal excessive variety and promote standardization and variety reduction.
 To establish a common language for the identification of an item.
 To fix essential parameters for specifying an item.
 To specify item as per national and international standards.
 To enable data processing and analysis.

7. What are the advantages of simplification?

Following are the advantages of simplification:

 Simplification involves fewer, parts, varieties and changes in products; this reduces
manufacturing operations and risk of obsolescence.
 Simplification reduces variety, volume of remaining products may be increased.
 Simplification provides quick delivery and better after-sales services.
 Simplification reduces inventory and thus results in better inventory control.
 Simplification lowers the production costs.
 Simplification reduces price of a product.
 Simplification improves product quality.

8.Explain the basic steps in value analysis.

- The method is beneficial for organizations since it lowers costs and boosts product
quality. In addition, it enables a corporation to improve business efficiency and the
effectiveness of all connected operations.

 Identifying the function – knowing the primary and secondary function of the product is
very important since it will be the basis for you to know who is the best target customer
that you need to focus on and it should be aligned with the objectives of the organization.
 You must fully understand what are the functions of your product for it to be maximized
and for its value to increase.

 Evaluation of the function by comparison – after you identify the value of the product,
the next thing you need to do is to evaluate its function and compare this with the other
product that you have, or your competitors have. It will enhance the cost efficiency for
the manufacturing of this product since it will help you to identify and eliminate
unnecessary cost incurred while the product is being produce.

 Develop alternatives – developing number of alternative solutions to a problem are very

important, from which the most successful strategy or set of strategies can be chosen and
put into practice since not all function or strategies in creating a product always work.

9. Explain the objective of ‘Ergonomics’.

Human engineering (ergonomics) has two broader objectives:

1. To enhance the efficiency and effectiveness with which the activities (work) is carried out
so as to increase the convenience of use, reduce errors and increase in productivity
- the purpose of ergonomics is design to make a more comfortable, safe, and healthy work
environment. This will help the workers to become more effective, efficient, and productive to
the organization.

2. To enhance certain desirable human values including safety reduced stress and fatigue
and improved quality of life
- ergonomics also helps to reduce the exposure to work hazards that includes working in
awkward or uncomfortable postures and using excessive force or high repetition just to complete
the task. If a worker is working comfortably, free from stress, and fatigue at work, the worker
will be more eager to do their job properly in a given period of time, and a lot of work will be
done.