Material Management-Emerging Trends

 

The way technology has transformed the unprecedented pace of lives was never been imagined in the beginning of this century. Especially the aspects of material management have emerged with several disruptive and constructive technological trends. Internet of things, mobility, advanced robotics and alternative energy sources are all going to influence the movement of supply chain in a significant way. Most of the traditional approaches are losing their effectiveness as the intricacies in supply chain become more and more complex. This segment deals with some innovative and effective trends in material management which will allow you to rethink on your approach and consider this 7 step MM program.

Development of Material Management Strategy

A supply chain organization must focus on its strategy and the factors it includes in it, apart from this, attention should be drawn towards systematic influence upon three cost categories;

Material cost- which includes raw materials, semi-finished goods, finished goods and indirect materials. Working Capital cost- including its interest on all material and goods, depreciation or value adjustments. The third is Overheads where all other miscellaneous expenses are included.

Internet of Things

In terms of managing warehouse efficiently, the internet of things offer great support in terms of providing sensors and data communication technology for physical objects to be tracked timely. In the warehouse, the Internet of Things will support communication and coordination across conveyors, automated storage and retrieval systems, forklifts, and other systems to enable new levels of visibility and automation.

Inventory Optimization

Inventory management is another crucial concept which needs to be paid due importance in order to reduce complex and time consuming calculations to the minimum. A proper decision support system that implements best methodologies along with critical analysis of each stock item will act as an effective tool to control your inventory and its demand forecasting.

Planning for Fast and Slow moving materials

Identifying your fast-moving and slow-moving stock will allow you to implement your material management strategy in an effective way. Calculating average days to sell inventory, estimating holding costs and using inventory turnover to identify the merchandise which is resulting in low profits and operational inefficiencies. 

Data clean up, data analysis and data capture

A systematic approach towards data cleaning allows you to eliminate irrelevant and duplicated data which may hinder your overall efficacy. Stay updated with the recent data available and ensure timely evaluation and analysis to form proper and feasible policies for further purchase modules. Bar codes, RFIDs and use of biometrics are few innovative technologies which must be utilized for data capture to ensure authenticity.

Bill of materials (BOM) analysis and update in ERP system

A bill of material has a powerful impact on the available inventory and purchase of raw material. Proper and timely analysis will help you to allocate accurate information and form productive policies with an improved decision making. Your ERP solution must include updated facts and figures which are relevant to your purchase orders, current inventory and sales forecast. An incorrect BOM can lead to a massive headache, wasted money and loss of revenue, for you and everyone on your team.

Expediting 

This is another inevitable concept in terms of managing materials as it includes purchasing and project management for confirming with the quality and timely delivery of goods and other components. Most of the mid-sized and small scale businesses do not have a real-time tracking tool to record expedite requests, track response times and measure actual delivery improvements. Moreover, the process creates an impact on the production side as well as supply chain and customer service. It reduces workload and chaos in communication.