1. Presented by :Mr. Manjunath halkeri
M.Pharma 1st yr (Pharmaceutics)
BLDEA’s College of pharmacy,
Bijapur.
Under the guidance of :Dr C.C.Patil,M.pharm,Ph.D
Dept. of Pharmaceutics,
BLDEA’s College of pharmacy,
Bijapur.

2. CONTENTS

Definition

Objective and importance

Principles of material management

Functions of material management

Materials – Quality and Quantity

3. CONTENTS
 Value analysis
 Purchasing
 Vendor development
 Buying techniques
 Purchasing cycles and procedure
 Advantages of material management

4. DEFINITION
It is defined as an organizational concept, which has the
authority and responsibility of all activities, concerned with
the flow of materials in the organization
or
Material
management
is
a
scientific
technique, concerned with Planning, Organizing &Control
of flow of materials, from their initial purchase to
destination.

5. OBJECTIVES AND IMPORTANCE
Efficient use of the working capital.
 Responding to the market changes related to any product.
 Ensuring the cooperation of all departments.
 Providing best services to the king of the market i.e
customer.
 Lowering inventory investment and increasing the
inventory turnover.
 Right quantity of supply ,at right place and time


6. PRINCIPLES OF MATERIAL HANDLING

Simple inventory control programme

Least handling is the best handling.

Minimize the distance

Lengths and number of move to be minimized

Unit loads

7. PRINCIPLES OF MATERIAL HANDLING

The materials handling service should not interfere
with the production flow.

The design of the container e.g. shippers are used
for storing finished bulk. & for raw materials as per
the property of materials they are stored- plastic
containers ( light weight containers)

Re-handling and back tracking of the materials
should be avoided.

8. CLASSES OF MATERIALS

Raw materials:- These are materials that are used
in the product which is in an unprocessed condition.

Supplies:- These are consumable goods used in
the process of manufacturing.

Purchased Parts:- These are the items used in the
assembly of the product.

9. 
In-progress materials:- They are called ‘work in
progress’ inventories. These goods require further
processing.

Finished materials:- These are fully manufactured
goods, inspected and ready for delivery to the
customers.

10. FUNCTIONS OF MATERIAL MANAGEMENT

11. MATERIALS-QUALITY & QUANTITY
Four factors affecting the purchase of raw materials are
1) Quality :- The suitably of an item to accomplish the intended
work.
The raw materials should satisfy the
following
requirements.
i.
Efficiency of the material.
ii.
Cost and the shelf –life.
iii.
For equipments, power consumption and
power
requirement.


12. 2) QUANTITY

i.
ii.
iii.
iv.
3)
4)
From the inventory point of view, quantity standards are
decided on the following parameters;
Maximum inventory
Minimum inventory
Standard order
Reorder point
Price
Delivery Date

13. VALUE ANALYSIS


i.
ii.
iii.
iv.
Definition:- It is a systematic study of every
element for it’s cost in a part, material or service to
make certain that it performs it’s function at the
lowest possible cost.
Benefits of value analysis:Decrease in existing cost of the product or service.
Unnecessary expenditure is identified and
eliminated.
Product value improves for new materials and
processes.
More profits.

14. TYPES OF VALUE
User value: properties that accomplish use, work or service.
Ex:- self sealing tape
Cost value: properties that are the sum of labour, material, overheads
& other costs, required for producing that object
Ex:- mixing, granulation & drying are done in single equipment.
Value ratio: it is expressed as Value =function
Total cost
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15. PURCHASING
Advantages
 Efficient system
 Bargaining
capabilities
increased
 Good raw material obtained at
lower price
Decentralized:different
department purchase their
requirement seperately. This is
basically seen in large
organizations.
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Centralized :- the purchasing
procedure of materials for
different department is done
together from one purchasing
department. This is seen in
small organizations.
Advantages
 Flexible purchasing system
 Procurement is faster
15

16. VENDOR DEVELOPMENT
The supplier or the person who sells the required materials or
services for the production is known as a vendor.
The purchase of raw materials/service from a specific vendor
is known as the vendor development.
There are four stages of vendor development:-
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17. Four stages of vendor development
Stage
Name
Development
Survey stage
Identifying the potential
sources of suppliers.
Seeking information.
Provisional vendors list.
Enquiry stage
Analysis of information in
standard enquiry format.
Accreditation, FDA
approval, ISO certification.
Personal visits.
Quality control
specifications, clarification,
credit, quantity discounts.
Performance appraisal,
Quality, delivery time.
1st
2nd
3rd
Negotiations and
selection stage
4th
Experience and
evaluation stage
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18. 1) SURVEY STAGE
The following sources are considered for information
 Trade directories :- e.g.
Yellowpages.eindiabusiness.com
 Trade journals:- e.g. Pharmatimes
 Telephone directories
 Supplier’s catalogue
 Salesmen
Other ways are like interchanging of information
with other companies, tracing of public tenders and
advertisements in the press.
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19. 2) ENQUIRY STAGE
After getting the information of the suppliers, detailed analysis
of the supplier is being carried out. A comparison is being
made between the different suppliers on basis of the
following points:a.
b.
c.
d.
Technological competition,
service competition,
price competition,
delivery time.
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20. The following aspects can be verified by the first hand visit:




Internal facilities of the vendor
Financial adequacy, stability and reputation of the vendor
Location of vendor’s factory
After sales service
Industrial relations
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20

21. 3) NEGOTIATION AND SELECTION STAGE

The vendors who clear the enquiry stage are selected and
negotiations are being carried out with them.

The various aspects such as credit, quantity discount, quality
specifications are being discussed.
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21

22. 4) EXPERIENCE AND EVALUATION STAGE
The buyer evaluates and appraises the performance of the
vendor.
 The objective is to improve the performance of the vendors.
Few ways of evaluating a vendor are:o Categorical method
o Weighted point method

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23. CATEGORICAL METHOD
The buyer sets up some category on which the evaluation of the vendor is done. Specimen
of supplier’s evaluation form is given below.
Grading
Factors
Always
9
8
7
Usually
6 5 4
Seldom
3
2
1
Never
0
Supplies are as per
quantity selected
Deliveries are on
time
Rigorous follow up
is not necessary
Willing to
accommodate when
production schedules
are suddenly
changed
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24. WEIGHTED POINT METHOD
Here the rating points are divided between quality,
delivery and price.
For eg
quality – 50 points
delivery- 30 points
price – 20 points so total is 100 points.
The rating can be obtained by following equation.
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25. WEIGHTED POINT METHOD
Quantity rating = (no. of lots accepted/ no. lots
received) ×rating points
Delivery rating = (no of lots delivered on time/ no
of lots delivered) rating points
Price rating =(least offer received/ supplier’s offer)
rating points
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26. BUYING TECHNIQUES
Purchasing of material , machinery and services is done by
purchasing department.
For buying the material company has to pay up a price, the value
that a seller sets on his goods in the market is called as the price of
that good.
Price is one of the greatest variables in the purchasing of material.
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27. HOW IS THE PURCHASING DONE????
 Quotations
:- It is a kind of an enquiry done to
know whether the vendor can supply the desired
material and at what price.
 They are not the purchase order. They just contain
all the details including freight, taxes and many
other costs.
 The highly used quotation techniques are
 Spot quotations
 Floating a limited enquire
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28. HOW IS THE PURCHASING DONE????
 Spot
quotations:- this is basically used for the small items
not related to the technical purpose.
The prospective buyer goes to the market and gets the
quotations from the different suppliers.
 Floating
a limited enquire:- this method is used when the
value of the purchase is small. In this technique the
reliable vendors are called upon and asked to provide the
quotations.
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29. HOW IS THE PURCHASING DONE????

Tenders:It is a written letter or a published document
that is aimed at finding the price for procuring certain
materials.
Tenders are invited from recognized firms. A few
types of tenders are:
 single tender
 Open tender
 Closed tender or limited tender
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30. HOW IS THE PURCHASING DONE????
 Single
tender:- It is invited from one reliable
supplier. This kind of tender is floated only when
the itms are required urgently.
tender:- Also known as ‘ press tender’. This
is used when the value of item to be purchased is
very high. It is used to locate more suppliers.
In this tender procured, a small amount of the
deposit money is taken from the supplier so that
they do not withdraw from the submitted rates.
 Open
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31. HOW IS THE PURCHASING DONE????

Closed tender or limited tender (Negotiations):- It is done to arrive
at the mutual understanding between the supplier/vendor and the
buyer.
Negotiations
It may be defined as an art of arriving at a common
Understanding through bargaining on the essentials of a
Contract such as delivery, specifications, prices and term
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32. HOW IS THE PURCHASING DONE????
What’s the need for negotiation?
 prices are related to large volumes or to a large
value.
 terms and conditions are required for large volumes.
 contract is desired for a longer period.
 variations in quantity to be purchase are possible.
 when supplies or services can be obtained from only
one source.
 when no acceptable quotations are received from the
other vendors.
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33. HOW IS THE PURCHASING DONE????
Process of negotiations:- It is a kind of win-win situation.
Both the parties try to benefit to the maxima through the
negotiation.
It is not a kind of bargaining but a mutual understanding
between the two parties.
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33

34. HOW IS THE PURCHASING DONE????
Discounts:- They are cash concessions offered by the vendor to
the buyer, in order to enhance the volume of the business
opportunities.
Reasons for offering discounts?????
! When there is a bulk purchase.
! When the bills are cleared immediately.
! And also to maintain the good rapo with
the buyer
Types of discounts:1)
Volume contracts.
2)
Deals
3)
Discounts
4)
Consignment terms

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35. HOW IS THE PURCHASING DONE????

Volume contracts:- This kind of discount is offered
proportionate to the volume of material ordered.

Cash discount:- Cash discount is given on the basis of
the time of the payment done by the purchaser. The
normal credit period is 90 days.

Cumulative discount:- It is a method of offering the
discount on the basis of actual purchases and appropriate
to the quantity range in a year.
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35

36. PURCHASING CYCLE AND PROCEDURE
The purchasing department of the company is
responsible for the purchase of all the raw materials as
well as the requirements.
The following steps are followed in the purchasing cycle.
1) Recognition of need and receipt of requisition:
The
requisition
includes
the
following
information:- Name
- Quality and quantity specifications
- Date by which material is required
- Place at which material is to be delivered

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37. PURCHASING CYCLE AND PROCEDURE
2) Selection of potential sources of supply
3) Making request for quotation
4) Receipt and analysis of quotations
- material specifications and quality
- price of the material
- taxes
- terms of payment
- place of delivery
- delivery period
- guarantee period
- validity of tender
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38. PURCHASING CYCLE AND PROCEDURE
5) Selection of right source of supply
6) Issuing the purchase order
7) Follow-up of the order
8) Receipt of materials,reports and analysis
9) Checking and approving of vendor’s invoice for
payment
10) Closing of completed order
11) Maintenance of record and file
Purchasing cycle flow chart has been given in the
following slide.
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39. Need recognition
Spell out of specifications &
requirements
Official requisitions
Check specifications,
prices/supplies
Specifications
file
Enquiry tender
Select suppliers
Purchase
records
Supplier’s
record
Quotations & analysis prices and terms, negotiations, finalisation
Purchase order for supply
Follow-up
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Suppliers’ acceptance
39

40. 
Contd ….
Delivery of materials
Checking of invoice
with purchase order
Materials & reports, analysis
Payment made
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41. Location of Stores :
 Store should be
manufacturing area.
located
adjacent
to
the
It depends up on nature and value of items to be
stored and
frequency with which items are received and
issued
Objectives :
 Minimum wastage of space
 Maximum ease of operation
 Minimum handling cost
 Minimum other operational cost
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41

42. FACILITIES OF STORE
Inspection
center
Quarantine room
Washing room
Centralized weighing department
Adequate space
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43. Functions of stores
 GENERAL FUNCTION :
 Maintenance
of Stock (materials and tools)
 Maintenance
of hygiene, sanitation, and
pest control
 Maintenance
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of material handling equipment
43

44. Functions of stores
 SPECIFIC FUNCTIONS :
 Receiving
& recording of raw materials
 Quarantine storage – Sampling & approval by QC
 Positioning & Storage
 Issuing & recording of materials
 Receiving & Dispatching of finished goods
 Distribution

Optional functions :
 Dispensing,
Maintenance of weights & measures
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44

45. MATERIALS HANDLING

The movement of materials (raw materials, scrap,
semi finished and finished) to, through, and from
productive processes; in warehouses and storage;
and in receiving and shipping areas.
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46. GOALS OF MATERIAL HANDLING

The primary goal is to reduce unit costs of
production

Maintain or improve product quality, reduce damage of
materials
Promote safety and improve working conditions
Promote productivity
 material should flow in a straight line
 use gravity! It is free power
 move more material at one time
 mechanize material handling
 automate material handling


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47. GOALS OF MATERIAL HANDLING
Promote increased use of facilities
 Reduce tare weight (dead weight)
 Control inventory

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47

48. IMPORTANCE
OF
MATERIAL MANAGEMENT
Increase in cost of raw materials & finished
products
 Delay in production schedule & long cycle
 Increase in in-process inventories
 Damage or loss of material & employee safety
liabilities
 Employee frustration & reduced morale
 Customers dissatisfaction

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48

49. APPLICATIONS OF MATERIAL
MANAGEMENT EQUIPMENT IN
PHARMACEUTICAL INDUSTRY
Production department
 Stores department

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49

50. FUNCTIONS OF MATERIAL HANDLING
Handling of unit load :-the principle of
containerization, unit-load & palletization are
employed for moving an optimum number of
pieces at a time to their ultimate destinations.
 Placement of equipment :-In production operations,
appropriate plant layout & proper placement of
equipment minimizes the movement of materials.
 Appropriate material handling equipment :Mechanical aids should be employed in place of
manual handling.

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51. SELECTION OF MATERIAL HANDLING SYSTEMS

The best equipment is one that :
Permits smooth & continuous production flow
Involves less number of accidents
Reduces production cycles time
Promotes better working condition
Lessens fatigue to the operators
Brings down total material handling cost
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51

52. 
Nature of material to be moved :- the
size, weight, delicacy, nature (solid, liquid, gas) of
material & chances of getting damaged during
handling should be considered.
Plant building & layout :-A multi-storeyed building
facilitates the use of gravity for material flow.
The door locations,sizes,ceiling heights, roof& floor
strenghts,columns,etc..
Production machines :-Different machines have
different outputs per unit time.
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52

53. Type of material flow patterns :-A vertical flow
pattern requires elevators,conveyors,pipes
etc.,whereas horizontal flow patterns need trucks,
overhead bridges, cranes, conveyors etc.
 Type of production :-Conveyors are more suitable
for fixed routes for continuous process & powered
trucks are suitable for batch operation.

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53

54. Cost of material handling equipment :-The initial
cost of handling equipment are high. when human
contact with product must be
minimized, equipment is the alternative, hence cost
does not limit the installation.
 Handling costs :-Economy in material handling can
be achieved by employing gravity-aided
movements & minimizing the distance of material
travel. A system that allows the product directly fall
over the material handling equipment is more
ideal.

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54

55. 
Life of equipment :-Proper periodic
insepection,repairs & maintaences of equipment
increases its life. smoothen the flow of materials &
economize the production system.
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55

56. MAINTENANCE OF MATERIAL HANDLING
EQUIPMENT
Inspection :-all parts, open or covered are
inspected for wear & tear. Worn out or unworkable
components such as wire ropes, bearing & bolts,
are identified & remedial measures are taken.
Breaks are adjusted & lubricated wherever &
whenever necessary.
 Repairs :-After inspection, all repairable parts are
corrected & minor defected are rectified. open gear
transmission, coupling, riveted & bolted joints,
trolleys, breaks, guards etc., require frequent
repairs.

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56

57. 
Overhaul:-involves dismantling the complete
mechanism & replacing the damage components.
Crane structure, buffers, rails, open gear
transmission, pulley blocks etc., may be overhauled
& various sub mechanisms may be aligned &
adjusted.
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57

58. UNIT-LOAD, PALLETIZATION &
CONTAINERIZATION
It is easier & faster to move a hundred small parts
by grouping them into one unit than moving them
individually one by one. these are collectively
known as unit-load.
 For example, each formulation of tablet contains a
number of ingredients. For a lot
size, ingredients(raw materials) are weighed &
packed individually & loaded onto a pallet.

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58

59. 
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
Pallet is one unit load these
are moved to the production
department by suitable
handling system.
Depending on the types of
item to be transferred, a
suitable pallet can be
designed. for example,
items of irregular in shape
are liable to be damaged by
crushing, for such items, a
post pallet is useful. small
items can be placed in a
wire mesh-box.
59

60. 

Containerization
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Containerization uses the
principle of unit load. in
this system, a big metal
container is filled with a
number of small
products. many such
containers are placed on
a truck or trailer that is
pulled by tractor or truck.
such containers can be
loaded on railway trailers
& transported.
60

61. TYPES OF MATERIAL HANDLING SYSTEMS

Conveyors:-are employed for transporting materials
in a fixed path, which may be horizontal, vertical or
inclined to different locations of a factory. these
prove economical, if the flow of material is
continuous.
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61

62. BELT CONVEYORS
It is used in transporting containers (bottles) for
filling, capping, sealing, labeling, visual inspection
etc.,in production of injectables,liquid orals,
ointments & jellies.
 Several types of other conveyor are available.
example are roller conveyor, slat conveyor, wheel
conveyor, apron conveyor, pusher bar conveyor, &
bucket conveyor.

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62

63. 
Belt Conveyors
◦
Conveys materials along
horizontal, and slightly
inclined paths
◦ Driven by power operated
roll mounted underneath
the conveyor or at the one
end of the conveyor.
◦ supported on either rollers
or on metal slider pan and
we call them roller
conveyor and slider
conveyor respectively
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63

64. BELT CONVEYORS-ADVANTAGES
Belt can be made of asbestos fibers, neoprene, Teflon, &
vinyl polymer. cord belt are also used.
 Belt conveyors are for general purpose installation &
available in relatively large sizes. these can travel several
kilometers as in case of coal mines.
 Routine maintenance is easy.
 It is economical.
 Disadvantage-it is expensive.

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64

65. PNEUMATIC CONVEYOR
Pneumatic conveyor or pipeline conveyor is one of
the most commonly used handling techniques in
chemical industry. it is employed when the material
is light & bulky, for example, formulation of powder
insufflations.
 This type of conveyor is a closed system, handling
of unpleasant & injurious substance is easy. it is
used for transporting of granular(example,wheat)or
pulverized material(example,salt)through the
pipes.

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65

66. PNEUMATIC CONVEYORS



Involves the transportation
of a wide variety of dry
powdered and granular
solids in a gas stream.
In most cases the gas is
normally air.
Where special conditions
prevail, different gases are
used.
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66

67. WHY PNEUMATIC CONVEYING?

Advantages






Dust free transportation of a variety of products.
Flexibility in routing.
Low maintenance and low manpower costs.
Multiple use.
Security.
Ease of automation and control.
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67

68. WHY PNEUMATIC CONVEYING?

Disadvantages





High power consumption
Wear and abrasion of equipment
Incorrect design can result in particle degradation
Limited distance
By virtue of the complex flow phenomenon which
take place, there is a requirement for high levels of
skill to design, operate and maintain systems
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68

69. FORK-LIFT TRUCKS

It consist of forks attached to a column of the truck.
fork can be lifted upto the desired height with
material(boxes) on them. the material can be
stacked at the proper place very close to the roof in
warehousing & shinning area. fork-lift trucks are
used for short distance(40 to 70 meters) travel.
these are used for indoor applications.
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69

70. Platform truck (low-lift) is
used for transporting the
palletised raw materials
of a lot-size manually
from the warehouse to
the production area.
 Platform trucks (high lift)
is used for loading the
tablet granules into
double cone blender.

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70

71. Three wheel fork lift
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Four wheel fork lift
71

72. CRANES

Cranes are employed for
lifting & lowering of bulky
items, packages & boxes.
these find applications in
heavy engineering
industry & generally in
intermittent type of
production.
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73. HOISTS

Hoists means lift or pull something up to higher
place (overhead position) with ropes. this
equipment is mounted on single rail fixed at the
height nearer to the roof. hence, material are
transferred along fixed path. hoists find application
in industries employing chemical cleaning. Cranes
are used for heavy items & hoists are employed for
small items.s
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73

74. Air operated Hoist
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Electric Hoist
74

75. SLIDES, CHUTES & LIFTS

Slides can be straight,
spiral & vibrating, & made
up of wood or steel.
these transfer small jobs
that can slide down under
gravity. vibrating slides
transport material up &
inclined.(example,cigarette factories)
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75

76. CHUTES
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Chutes have sheet metal
or roller base for
transferring components
down the incline. chutes
generally deliver the feed
material directly onto the
conveyor to reach the
destination further.
 Spiral chutes are used for
transporting sealed vials
from aseptic area to
packing section using gravity
principle.

76

77. LIFTS

Lifts are used to transport
material up in multi-stored
plants. it is a fast & flexible
equipment for floor to floor
travel.
buckets or trays are
mounted on the endless
chain running from the
ground floor to the top floor.
the material can be loaded
into trays automatically.
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
77

78. TRACTORS & TRAILERS
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Three wheeled or four
wheeled tractors are
employed & fitted with an
IC engine drive. these are
used for outdoor
applications.
 Trailers are loaded with the
material & attached to the
tractor. it can be either
uncoupled from the tractor
or the material can be
dumped in respective
stations.

78

79. REFERENCES

Pharmaceutical Production & Management by C.V.S.
Subrahmanyam, Vallabh Prakashan, first edition, pg. no. 260267.

Modern business organization & Management systems approach
by Prof.S.A.Sherlekar,V.S.Sherlekar, Himalaya publishing
house, 5th edition,pg.no.5.38–5.58.

Applied
production
&
operation
management
by
rd edition, West
Evans, Anderson, Sweemey & Williams, 3
publishing company ltd.

Management (Task, responsibility & practices) by Peter F.
Ducker, Allied publication, Bangalore.

The eastern pharmacist-1993

www.google.com
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