Page 196 - DMGT525_MATERIALS_MANAGEMENT

Unit 14: Computers in Materials Management

14.5 Summary Notes

 Materials management is an important and specialized function existing in all industries
and utilities.

 For Materials Management computers software is tailor-made as per the requirements of
a particular manufacturing organization.

 Stock recording and stock movement recording has been greatly simplified and improved
by the automation of the data entry by bar coding.
 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.

 It has been found from experience that one to two per cent of the total, turnover is spent on
processing data in all areas of management, in large companies.
 Based on regular updating on the stock and control limits, the computer can initiate
follow-up action during the periodic review. Computers can be programmed to trigger
purchase orders and also to initiate follow-up action on outstanding orders.

 The greatest improvement derived from an integrated computer information system is
the replacement of paper work by organic data.
 Clerical processes, including tedious and erroneous computations are absorbed by
computerized system to make more time available for decision making, planning and
control.

 The integrated system also ensures a fast reaction to environmental changes—changes in
either supply or price of materials or changes in customer taste and measurement of
functions such as inventory, purchasing and vendors.

 A computer can easily maintain this information flow with basic data, coming from
production planning, design and maintenance departments and environmental information
coming from purchase and sales departments.
 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,”.

 Materials planning does help in effectively moving the whole organization in the right
direction.

14.6 Keywords

Back-flushing: It refers to the process of determining the number of parts that must be subtracted
from inventory records.
Bill of Materials: A bill of materials indicates the name, part number, and usage of each component
and the sub-assembly in which it is to be used.
Electronic Data Interchange (EDI): Electronic data interchange is a method for transferring data
between different computer systems or computer networks.
Electronic Data Processing: It refers to the use of automated methods to process commercial data.
Enterprise Resources Planning (ERP): Enterprise resource planning systems integrate internal
and external management of information across an entire organization.

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