Material flow execution function
| Material flow execution function |
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| See also |
Material flow in the production process is very important. It affects the duration of orders and the cost of its production. This flow performs the function of providing materials for ongoing production, which allows you to optimize machine downtime due to lack of material. At the same time, it reduces or eliminates the costs caused by these downtime. The material flow function streamlines the production process. This process is monitored from the moment when raw material is obtained until the finished product is sold to the customer. Thanks to the constant flow of material, we are able to provide material for production at every stage of the production process. Its constant monitoring allows us to analyze its inventory and prevent the phenomenon of "frozen capital" in the form of excess inventory. The production process can then be based on production for a customer order and not on mass production where we produce material for storage. The material flow function is designed to supply[1]:
- Production - the needed material
- Sales - the necessary goods
- Business activities - the necessary tools and all supporting materials
The material flow is addiction to on the market demand from customers.
MRP system
MRP means Material Requirement Planning[2]. This system helps to introduce and maintain material flow in the process. It presents the relationship between the production process and material demand. His task is to strive to optimize machine downtime as a result of waiting for material. This system is based on ensuring material requirements in accordance with the production process schedule. On its basis it is determined what material is needed for production and in what quantity. These requirements are divided in time to ensure continuous production at every stage of the process. This system monitors every element that is part of the final product. It calculates the date when we should deliver the material and start production so that a fully complete finished product is produced by the deadline. The production plan is based on the demand reported on the market, from which you know what types of materials and goods will be needed for production or sales. The advantage of the MRP system is the ability to maintain inventory at minimum levels and the ability to liquidate them at all possible stages of the process. This allows us to reduce storage costs and effectively use the resulting free space. Through this system, we can control material orders submitted at various stages of the process. We have the ability to analyze the risk that may occur during the production process e.g. absence of material or see a decrease in demand for a given good or service. It forces a quick response to the situation and immediate solution of the problem by correcting the process.
MFA and MFCA methodology
There are two types of flow analysis methodology[3]:
- MFA - Material Flow Analysis
- MFCA - Material Flow Cost Accounting
Material flow modeling is designed to positively affect the efficiency and effectiveness of the production process. This analysis optimizes the consumption of materials and energy to a minimum and helps in managing the waste obtained. To start the analysis, specify the goal you want to achieve to be able to give direction to your activities. This analysis should be presented in the form of a Petri net, on the basis of which material flow models are created. This model shows all types of material or goods flows between different process units. The MFCA method is a tool whose task is to determine the costs arising from the flow of materials. It applies to the production system but also to the entire enterprise. It obtains information from the acquisition of material for the process to the sale of finished products. It specify the costs associated with obtaining the material, its consumption and consumption energy. It also involves system costs. All cost statements should be presented in the form of charts or diagrams to better illustrate in which part of the process we bear the highest costs. As a result, we have the ability to quickly respond to a loss of money and take action to eliminate the causes of costs.
Footnotes
References
- An Ch., Fromm H. (2005), Supply Chain Management on Demand. Strategies, Technologies, Applications, Springer
- Bocij P., Chaffey D., Greasley A., Hickie S. (2006), Business Information Systems. Technology, Development and Management for the e-business. The Third Editions, Person Education Limited
- Mabert, V.A. (2007), The early road to material requirements planning. Journal of Op-erations Management25(2), Elsevier B.V.
- Mengersen K. L., Robert C., Titterington M. (2011), Mixtures: Estimation and Applications, John Wiley & Sons, Ltd
- Schouten T. (2018), Material availability planning in a low volume environmenta case study at ASML, Eindhoven University of Technology
- Yahya, T., Riwaydi (2012), The design Model of Environment Management Accounting (EMA) Using Material Flow Cost Accounting (MFCA), (Case Study in PT. Semen Padang), Lacsit Press
Author: Marcelina Rusinek
