After reading through the articles of material management, i come out with these ideas.
First of all, companies needs a good material management as a foundation to be successful.
material is a key to produce a product. All material companies need all areparts of products. From procurement, quality test to manufacturing, the whole process are managed from people, as a result, poor management will affect poor material management. For example, if the procurement department makes a mistake of writing down more amounts of materials, it will become waste for companies. If the production deaprtment recognise the material A as material B, the result they will produce definately is not the one customers expected. And if the store man caluculates the wrong number of materials, it will cause production problems because of the materials shortage.
Secondly, material management affects procurement plan.
How does procurement deaprtment make material requirement plan? They should focus on the order they have now to decide what they need and when they need in order to avoid material not being used. appropriat amount should be measured accurately, otherwise, if when the material shortage happens, it will affect the production plan and loss business. therefore, when making a material requirement plan, it is necessary to consider market prediction from marketing department. Furtheremore, having a clear understaning of how manay invetories we have now, how many we should deliver, how manay we are using, the lead time of procurement and when the purchase order point is is also crucial.
Thirdly, material management strongly connect to cost management.
A good material management is based on how well companies manage the cost. procurement cost, manufacturing cost, quality cost and delivery cost are the costs in the business management. However, according to the business environment, it is becoming more competitive. The price becomes a key issue for all companies to achieve. Of course, cost will be the first thing to do. Int terms of manufacturing cost, material management is crucial and becomes a direct solution for companies to solve the manufacturing cost issue. As a result, having a good material management is having a good manufacturing cost managment. It can be viewed as reducing operating cost.
To conclude, i am sure that material requirement plan is a helpful tool to help me to learn how to run a company being successful. it is a part of business bit needed to be managed.