Material stream

From CEOpedia | Management online

Material stream is the direction and route of material movement along with the sequence of material distribution in the supply chain. Material stream management is a set of planning, organizational and control activities carried out to ensure that material supply and production processes are carried out in accordance with the adopted criteria of material procurement and production processes. Improvements in the area of production and supply chain make it possible to obtain financial benefits (Christiane Jasch, 2008, pp. 37-48).

Material stream phases

In the logistics of supplies of a company, three basic material stream phases can be distinguished (Mario Schmidt, Carolin Raible, Rene Keil., Michale Gräbe, 2007):

  • supply - i.e. transport - it covers the supply of materials needed for production and all other goods necessary for efficient economic functioning to a company
  • collection and storage - i.e. collection of goods imported by the supplier and their storage in supply warehouses. In addition, this phase concerns all storage and handling activities related to the collection and storage of goods.
  • organization of the material stream - i.e. activities related to the stream of materials from warehouses where they were stored to the production hall, and more precisely to the first production station where the materials will be used.

Consequences and causes of the absence of the synchronization of the material stream

Material stream in the production or supply process can be restricted due to a number of reasons:

  • limited availability of materials and deliveries,
  • lack of financial resources,
  • the absence of a production space or machinery,
  • lack of warehouse space.

Lack of coordination of material stream in a company may result in:

  • delays, waiting and, consequently, working in a hurry to make up for the delays,
  • duplication of work, unnecessary activities, overlapping of responsibilities,
  • confusion, unclear instructions, missing out on information, misunderstandings,
  • lost data, information gaps, poor resources use, missed opportunities,
  • lack of flexibility, routinization, early "freezing" of plans, outdated standards, stagnation (Robert Ayres, Leslie Ayres, 2002, 79-113).

Material stream planning

Material flow planning has to be considered in terms of the supply chain, both internal (distribution, procurement, production) and external (producer, distributor, supplier). Demand for particular production materials depends on the demand for finished products on the market and is therefore related to production and sales plans. Consistency in the material flow planning process concerns the three basic planning stages:

1. Planning level and horizon - it consists in:

2. Phases of material stream in the supply chain - it is production, distribution and supply phase.

3. The area and scope of planning:

  • logistics
  • human resources,
  • repair and overhaul,
  • marketing,
  • finances.

Planning material stream is aimed, on the one hand, at meeting customer requirements and ensuring the competitive position of the company's products on the market, and on the other hand, at ensuring the achievement of the company's objectives in terms of sales revenues and cost levels, as well as using production resources effectively (Robert Ayres, Leslie Ayres, 2002, 79-113).

Examples of Material stream

  • Manufacturing: Material stream in manufacturing is the sequence of material flow from suppliers, through the production process, to the customer. It typically begins with raw materials being collected from suppliers, which are then moved to the production line. The production line then processes the raw materials into finished goods, which are then packaged and shipped to the customer.
  • Logistics: Material stream in logistics is the sequence of material flow from the supplier to the customer. This includes the transportation of raw materials to the facility, the processing of those raw materials into finished goods, and the delivery of the finished goods to the customer. It also includes the tracking of the materials throughout the supply chain to ensure that they are delivered on time and that they meet quality standards.
  • Retail: Material stream in retail is the sequence of material flow from suppliers to the customer. It begins with the selection of the products to be sold in the store, which are then ordered from the suppliers. The products are then delivered to the store, where they are placed on shelves and made available for purchase by customers.

Advantages of Material stream

  • Material stream is an efficient way of managing material movement and distribution in a supply chain. It allows for improved planning, organization and control of material procurement and production processes, resulting in increased financial benefits.
  • It helps to ensure that material is delivered in the right amount, at the right time and in the right place. This helps to reduce wastage and unnecessary delays in the supply chain, leading to higher customer satisfaction.
  • It also helps to reduce the overall cost of production as it allows for better utilization of resources and improved processes.
  • Material stream also helps in reducing the inventory levels, which in turn helps in reducing the overall cost of the supply chain.
  • It also helps in improving the quality of the material being supplied, leading to improved customer satisfaction.
  • Material stream also helps in improving the visibility of the supply chain, allowing for better decision making.

Limitations of Material stream

  • Material stream management can be difficult to implement due to its complexity, and it requires significant resources to set up and maintain.
  • Material stream can be disrupted by sudden changes in demand or supply, which can lead to delays in the production process.
  • Material stream can be affected by changes in the pricing of raw materials, which can lead to higher costs.
  • It can be difficult to predict how changes in the material stream will affect the production process, which can lead to delays and production problems.
  • Material stream can be difficult to coordinate between different suppliers, which can lead to inefficient use of resources and delays in delivery.
  • Material stream can be affected by seasonal fluctuations in demand, which can lead to an increased need for inventory and increased expenses.
  • It can be difficult to effectively monitor and control the material stream, which can lead to ineffective use of resources and unexpected delays.

Other approaches related to Material stream

  • Product-Service System (PSS): PSS is a business model that shifts the focus from the product to the service that the product offers. PSS combines the delivery of a product with the provision of services, such as installation, maintenance, and repair.
  • Just-in-time (JIT): JIT is a strategy that focuses on reducing inventory levels while increasing production efficiency by delivering the right parts or components needed at the exact moment they are needed.
  • Total Quality Management (TQM): TQM is an approach to production and supply chain management that focuses on eliminating waste and improving quality. It involves continuous improvement, customer focus, and the use of data to make decisions.
  • Lean Manufacturing: Lean manufacturing is an approach to production and supply chain management that focuses on minimizing waste and maximizing value. It involves the use of techniques such as value stream mapping, standardized work, and continuous improvement.

In conclusion, material stream management is a complex process that involves a variety of strategies, techniques, and approaches. Other approaches related to material stream management include Product-Service System (PSS), Just-in-time (JIT), Total Quality Management (TQM), and Lean Manufacturing. Each of these approaches has a distinct focus and can help to improve the efficiency and effectiveness of a material stream.


Material stream — recommended articles
Production logistics subsystem — Logistics chain — Coordinative function of logistics — Added value (logistics) — Supply logistics subsystem — Distribution logistics subsystem — Dependent demand — Procurement logistics — Material flow execution function

References

Author: Sylwia Pasternak

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