Why Material Management

An effective materials management of TakeMe Group is essential in order to

  1. Provide the best services to customers nationally and internationally.
  2. Produce at maximum efficiency and
  3. Manage inventories at predetermined levels to stabilize investments in inventories.

Successful materials management requires the development of a highly integrated and co-ordinate system involves.

  • Sales forecasting
  • purchasing
  • Receiving
  • Storage
  • Production
  • Shipping
  • And actual sales.

The stages of Material Management

Procedures of Materials Acquisition

Procedures of Materials Acquisition

Cost of materials Acquisition.

Cost of materials Acquisition.

Product Costing and Cost Allocations

Product Costing and Cost Allocations

MATERIAL ACQUISITION PROCEDURES

In TakeMe Group’s material is divided into two parts. These materials are the direct material for the product. The classification of materials is as follows:

  • Raw material.
  • Packing material.

Before going to the report, let us have a look that what are the steps are involved in case of parching raw and packing materials from local forms such as:

  • Local purchase.
  • Import of materials.

LOCAL PURCHASE OF RAW AND PACKING MATERIALS

The domestic purchase of raw materials and packing materials include following business functions:

  1. Processing purchase order.
  2. Receiving goods, material, material and services.
  3. Recognizing the liability.
  4. Processing and recoding cash disbursement.

PROCESSING PURCHASE ORDER

The procedure begins with need recognition. The respective department identifies its need, gets approval of the developmental head and with the approval an authorized person sends purchase requisition to purchase department to initiative purchase.

In case of raw a packing material, the planning department determines the quality and timing of raw materials. The department informs the purchase department when to buy materials, when the purchase department got the requisition, it calls for quotation or tender. After receiving the quotation or tender supplier has been selected. The supplier may be local or international. If the terms and conditions are in favor of both TakeMe Group and the selected supplier, the purchase order is issued by the factory.

RECEIVING MATERIAL, GOODS AND SERVICES

Generally the goods and services are received by the user department who has issued the purchase requisition or in some cases by the authorized department.

In case of materials, materials are received by Quality Assurance Apartment (QAD) in the factory. After receiving materials, MRR (Material  Receiving Report) is issued for material and other than materials (goods)

A GGR (Goods Receiving Report) is issued by the receiving department to the purchase  department.

RECOGNIZING THE LIABILITY

The purchase department compares the invoice/bill and MRR/GRR/QC with the purchase order. If everything has been compiled, the amount payable to supplier is approved by the purchase department. There is a real on the invoice named “Approved by” with the signature of the purchase Manager.  It means the purchase department is satisfied with the information mentioned in the bill.

PROCESSING AND RECORDING CHECK/CASH DISBURSEMENT

After a certain period of time when the date becomes natured for the liability, the payment is made by TakeMe Group. The matured date has been calculated in the aged payable report for each vendor. In most cases the payment may be made by cash or by bearer check or by A/C payee check or paid in advance fully or partly.

THE TOTAL PROCESS OF LOCAL PURCHASE HAS BEEN PRESENTED BRIEFLY IN BELOW: