Meaning of Material planning factors affecting material planning , techniques of material planning ..

Meaning/ nature of material planning - in any integrated material management environment planning forgetting the material is the starting point for whole material management function . Material planning sets the procurement process process and subsequent material functions rolling .

Factors affecting material planning -

Macro factors - these factors condition the rapid changes in global environment, such as global price trends, business cycles, import / export policies of the government etc ... Which can influence the material planning . The governments credit policy plays a critical role in bank following the guidelines mentioned therein, during the course of extending financial support to the business enterprise .

Micro factors - these factors can sign changes that take place within organization, such a plant capacity utilization, production plan, acceptable inventory holding, early times, rejection rate, working capital, delegation of power,communication, sensitivity etc that can affect the material planning .

Techniques of material planning -

1. Direct materials

High value 

(a) BOM  ( bill of materials )/ explosion chart

(b) MRP
 

Low value

 (a)  inventory control

2. Indirect material

(a) past consumption analysis technique

(b) exponential smoothing

(c) inventory control

Capacity requirement planning - capacity requirement planning is an accurate method used to determine the available production capacity of the company . Requirement planning first assess schedule of production that has been planned upon by the company .

Strategy of capacity requirement planning
 

1. Lead strategy
2. Lag strategy
3. Match strategy
4. Adjustment strategy