Principles of physical material supply and management

The principles underlying the control of the material flow represent another important influential factor in the design of the production logistics system that is indirectly linked to production type. It is also indirectly connected to the types of production. A distinction must be made between the principle of physical material supply, i.e., the delivery and pick-up principle, and the principles of control, i.e., the needs- and consumption-based material supply.
In physical material supply, various workers are responsible for supplying production lines from the material stores depending on the principle being used. If material supply is done with the help of the delivery principle, the production units will be supplied by specially assigned logistics workers from the material store. If, in turn, the pick-up principle is applied, the employee of a production unit must obtain the material himself from material stores [1].
In the principles of management, a distinction is drawn between the activators for material supply of the production units. Either the productive unit itself reports its need or a predetermined production plan sets needs planning [2].

 

Consumption-based material supply

The consumption-based material supply enables high production flexibility for the production units. The material flow is always triggered by the consumption of the production unit. This is usually done in an order-neutral manner, that is, in a way that is not related to a certain order placement. The objective of this system is to ensure supply security in the production unit by using sufficiently large but not oversized material stores.
In addition, the kanban system can be used.

Material supply and management in the kanban system

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The roots of the kanban system go back to developments at Toyota Motor Company of Japan. Kanban is the Japanese word for “card.” The kanban card is frequently attached to the container and contains information about the material to be supplied, the amount, the delivery time and the site where it is used. As soon as a container is used in production, the production worker places the container’s kanban card in a collection box. The kanban card, serving as a material withdrawal notification, is regularly collected by logistics employees. Afterward, the corresponding parts are picked in the stores and the full container with the same card is returned to the production unit. Today, an e-kanban is more frequently used than the paper version of the card. In the electronic form, the kanban cards are no longer collected. Instead, they are scanned at the site of use. New kanban cards are then printed out in the stores.
In determining the reorder point, the two most important factors are: the cycle time of replenishment from material stores and the consumption of the production unit. The kanban cycle must be designed in such a way that inventory levels in the stores for the production units and the transport costs between the stores and production unit are optimal.
The kanban principle can be applied not only between the stores and the production units but also to complete material management - from preparation of raw materials by several production units to the final stages of production. The final stages of production in the entire logistics chain - e.g., final assembly - report their requirements to the previous stage in the manufacturing process. And this stage passes the report to the stage that precedes it. This process is repeated until the information reaches the stage of raw material supply. After a delay, the material flow then goes in the opposite direction in which the information stream moved. The requested material travels through all affected stages of the logistics chain until it reaches the final production stage [1].

Needs-based material supply

The key difference between a consumption-based and needs-based system is the event that triggers a process. In the needs-based system, the push character is critical. In consumption-based systems, the pull character is decisive: The material needed by the production units is planned in a clearly defined process.
One such process is material-requirements planning - or MRP. In this process, the primary need for sales products is determined on the basis of customer orders and possible long-range production programs. As part of lot planning, secondary needs are then derived from the main production program. This is done with the help of information about product structure, inventories in the stores and process times. The result is roughly scheduled production orders for all products.
In the schedule planning that follows, the start and end times for all processes are set. Once this is done, capacity utilization levels are determined and compared with available capacities. If it is determined that the available capacities are not extensive enough to meet the schedule, an effort is made to eliminate capacity overloads by delaying orders or adding overtime.
Finally, production approvals are issued by production management. With the production plan, material needs in the form of material-withdrawal notifications or pick lists Pick list , or warehouse requests that initiate a material release from stores are determined. The information can be transmitted by paper or computer. Based on the ordered amount, the material is then picked in the stores and sent to the production unit [1].