1. Materials Management

2. Question from last lesson
Classic Cleaners specialises in supplying Australian households with washing
machines and dishwashers.The company is planning to reorganise its
operations as it prepares for the introduction of new models.The Operations
Manager, Connie Lemnos, is investigating having some product parts
manufactured in China and shipped to its Australian factories.
Identify and describe one facilities and design layout strategy that could be
employed as a result of the introduction of the new models at Classic
Cleaners.

3. Facilities and design layout strategies may include:
Classic Cleaners producers white goods in a variety of models and
therefore the Process or Functional Layout would be the best choice.
This layout groups activities, equipment and machinery of similar nature
or function together.
!
Award 1 mark for valid identification and description of facilities and
design layout strategy that could be employed as a result of the
introduction of the new models at Classic Cleaners.

4. Example of a good response
Facilities design and layout refers to the way an operations
system is organised.They should adopt a process layout
which is required for organisations which produce a variety
of products as they do produce different models.Their
work stations should be grouped according to functions eg.
Assembling to be done in one place and sticking of
stickers in another to allow for high levels of productivity
and efficient flow of the new machines through the
production line.

5. Outcomes (What you need to know and be able to do)
• Explain, in your own words, what materials ‘management’
about.
• List the benefits of efficient materials handling.
• Briefly outline the two key steps involved in materials
planning.
• What is inventory?
• What is the main benefit of inventory control?
• Explain how the just in time approach can improve
productivity and reduce costs.
• List potential problems that you can see with the just in
time approach.

6. Materials management is the strategy that
manages the use, storage and delivery of
materials to ensure the right amount of
inputs is available when required in the
operations system.

8. Inventory is the goods and materials
held as stock by an organisation.
The problem with having a high inventory is that it is costly

9. Materials handling is the
physical handling of goods in
warehouses and at distribution
points.

10. Materials Planning
A production plan is an outline of the activities
undertaken to combine resources (inputs) to
create goods or services (outputs).
Master production scheduling!
details what is to be produced and when.
Materials requirements planning involves developing an
itemised list of all materials involved in production to meet
the specified orders.

11. Inventory control
Inventory control ensures that costs are minimised and that the
operations system has access to the right amounts of inputs
when required.
Just in time (JIT)

12. Supply Chain Management
A supply chain is the range of suppliers from which the
organisation purchases materials and resources.
Supply chain is critical because
• If materials are not on hand, nothing can be produced.
• If materials are of inferior quality, it is difficult or costly to produce quality
products.
• If the right quantity of materials is not available, the organisation cannot
meet demand.

13. Exit Question
Explain Master Production Schedule.
Suggested solution
!
Explanation should refer to the Master Production Schedule as the detail of:
•
what needs to be produced
•
the quantity to be produced
•
how product will be produced
•
when it will be produced.
!
Award 1 mark for two of the points mentioned above and 1 more mark for another
two of the points mentioned above.