Wednesday, May 26, 2010

Material Planning functions and objectives

Material Planning functions and objectives

1. Translation of the sales projections into long term requirements.

2. On the basis of updated production plan adjusted to the latest sales demand to adjust

the materials accordingly.

3. To project the facilities required for the materials management.

4. Setting up of consumption standards, for working out requirements.

5. To perform value analysis to determine the intrinsic worth of materials.

8. To keep inventories as low as possible.

9. To procure parts as & when needed by the production/assembly schedule.

10. To decide where to make or buy

Factor that affect the Material Planning

There are many factors, which influence the activity of material planning. These factors can be classified under two catergories as macro factors and micro factors.

1. Macro factors: Some of the micro factors which affect material planning, are price trends, business cycles Govt. import policy etc.

2. Micro factors:
Some of the micro factors that affect material planning are plant capacity utilization,  rejection rates, lead times, inventory levels, working capital, delegation of powers and communication.


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