Page 192 - DMGT525_MATERIALS_MANAGEMENT

Unit 14: Computers in Materials Management

Computers are now the principal tool for processing the information that materials managers Notes
use for sound decision making, and computer-aided materials manage-menu is crucial to
organizational effectiveness. Computer-Aided Materials Management (CAMM) is an advanced
manufacturing technique that is used to manage the flow of raw materials and component parts
into the conversion process, to develop master production schedules for manufacturing, and to
control inventory.’ The difference between traditional materials management and the new
computer-aided techniques is the difference between the so-called push and pull approaches to
materials management.
CAMM also helps an organization pursue a low-cost or differentiation strategy. The ability to
control the now of materials in the production process allows an organization to avoid the costs
of carrying excess inventory and to be flexible enough to adjust to product or demand changes
quickly and easily.

Just-in-Time Inventory Systems

Another advanced manufacturing technique for managing the flow of inputs into the organization
is the just-in-time inventory system. Developed from the Japanese kanban system, a just-in-time
inventory system requires inputs and components needed for production to be delivered to the
conversion process just as they are needed, neither Caller nor later, so that input inventories can
be kept to a minimum,”. Components are kept in bins and as they are used up, the empty bins
are sent back to the supplier with a request on the bin’s card (Kanban) for more components.
Computer-aided materials management is necessary for a JIT system to work effectively because
CAMM provides computerized linkages with manufacturing technology combines the variety
advantages of small-batch production with the low-cost advantages of continuous process
production.

In sum, computer-integrated manufacturing, just-in-time inventory systems, computer-aided
materials management, and computer-aided design give organizations the flexibility to make a
variety of products, as well as different models of the same product, rapidly and cost-effectively.
They break down the traditional barriers separating the input, conversion, and output stages of
production; as a result, input, conversion, and output activities merge into one another. These
four innovations in materials technology decrease the need for costly inventory buffers to
protect conversion processes from disruptions in the environment In addition, they increase
product reliability because they increase automation and technical complexity.

Self Assessment

Fill in the blanks:

11. The integrated computer system should be utilized for the sake of an integrated
……………… system.
12. The integrated system also ensures a fast reaction to ……………… changes.

13. On the basis of record and basic data, the computer can ……………… inventory levels.
14. The difference between traditional materials management and the new computer-aided
techniques is the difference between the so-called ……………… and ………………
approaches to materials management.

14.4 Materials Planning

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Materials Planning can be used to assess the firm requirements for different planning horizons.
As the planning horizon exceeds one year, the forecast becomes less reliable. Normally, planning

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