Page 189 - DMGT525_MATERIALS_MANAGEMENT

Materials Management

Notes payment settlement towards e-commerce. It is now common to communicate the output
of a delinquent MRP system to a supplier, with much greater speed via electronic means!
4. Back-flushing: The computer technique of deducting components parts from stock based
on the arrival of a subassembly at some key measurement (“deduct”) point has been
developed in response to the need to automate the stock issuing process in conjunction
with the introduction of JIT techniques. This has also been used as a basis for paying
suppliers. By doing this, a situation has been created where the Bill of Material accuracy
for these inexpensive parts must be totally accurate. Often these parts’ usage is probabilistic
anyway rather than deterministic (with shims for example), with average usage entered
into the Bills of Material making the usage approximate.
5. Enterprise Resources Planning (ERP) Systems: These systems grew out of MRP and/or
Inventory Management and/or Accounting systems in the early 1990’s depending on the
pedigree of the software supplier into a “total” business control system integrating the
functions and data from various areas.

Example: A goods receipt would automatically update outstanding purchase orders,
reduce requirements generated by MRP, update the stock balance, create a creditor in the purchase
ledger and eventually update the general ledger with the new asset.

14.1.2 Disadvantages of Computer in Materials Management

Following are the various disadvantages of using computers in materials management:
 The inherent weakness of computers is that it is notoriously difficult to change computer
programs quickly and reliably in the event of requirements, suppliers, or system changes
and the lack of visibility of the process. This led to the expansion of parameters held
within the computer system that could be changed to reflect the changed situation. This
has now led to a process of “configuration” where the software can be “configured” to
reflect different circumstances. Presently and unfortunately the process of reconfiguring
can often be difficult.
 Another trap that the software suppliers have fallen into in the race to provide increased
functionality is to add complexity to the configuration process. This has resulted in many
horror stories of incorrect configuration, and a demand for highly skilled “configurers”
which for a time outstripped supply.
 These factors combined to constrain sales of the software, and have led to the sale of
preconfigured or cut down versions of complex software. Unfortunately this misses the
point which is that the manufacturing plant was simply trying to plan materials and
capacity simply.

Self Assessment

Fill in the blanks:

1. …………………..... management is a specialized function existing in all industries and
utilities.
2. Computers began to be used …………………..... to generate the schedule for the preceding
stages.
3. …………………..... is the dominant technique used by most computer softwares such as
“ERP”.

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