Materials Management Best Practices

Proven Materials Management Leading Practices to Adopt

  • Best Practices (#119) / Materials Management / Inventory Management & Control

    Best Practice (Good)
    Prepare a weekly inventory “hot list” for the Purchasing Group that lists which items currently are over or understocked. Include all relevant data about these items, such as retail price, cost, lead times, demand forecasts, etc.
    Typical Practice (Bad)
    Determine items that are over/understocked by comparing data from weekly or monthly inventory reports and demand forecasts.
    Benefits: Improves storage efficiency by opening warehouse capacity for more high-value, demand-heavy materials, and greatly improves materials availability by ensuring that high-demand items are appropriately stocked.
  • Best Practices (#120) / Materials Management / Inventory Management & Control

    Best Practice (Good)
    Identify redundant orders (same order number) immediately and call them out in the order management system. An automated notification is sent to the correct parties to ensure that no duplicate work takes place.
    Typical Practice (Bad)
    Use a simple yellow warning, but no use automated communication or "hard stop" to call out redundant orders in the system.
    Benefits: Reduces instances of duplicate orders and related rework and overall order management or entry costs.
  • Best Practices (#121) / Materials Management / Inventory Management & Control

    Best Practice (Good)
    Create a permanent Vendor Compliance Manager position. Implement firm-wide vendor compliance standards to address such issues as advanced shipping notifications (ASN), labeling requirements, packaging quality, delivery timeliness and standard case quantities. Assess all vendors based on these criteria on a regular basis.
    Typical Practice (Bad)
    Allow individual buyers and purchasing managers to assess the performance of their vendors subjectively. Allow them to use their judgment to determine whether the vendor adheres to company standards (if explicit company standards even exist).
    Benefits: Improves performance of third-party vendors by establishing expectations on labeling, packaging, promptness, etc. Consequently improves materials availability, delivery quality, on-time delivery percentage and correct order percentage, which in turn improve overall customer service.
  • Best Practices (#122) / Materials Management / Receiving

    Best Practice (Good)
    Force suppliers to use advanced shipping notifications (ASN) to ensure that receiving employees know the expected arrival time and contents for each specific purchase order.
    Typical Practice (Bad)
    Randomly receive products as they arrive, using ad-hoc, non-standard methods to allow suppliers to notify receiving employees of shipments.
    Benefits: Improves receiving dock capacity and allows receiving employees to plan unloading and storage activities based on advanced shipment notifications (ASNs).
  • Best Practices (#123) / Materials Management / Receiving

    Best Practice (Good)
    Analyze continuously and proactively implement cross-docking activities, and use these techniques wherever possible. Use cross-docking for back-ordered products, incoming products from third-party suppliers, reverse line picking, etc.
    Typical Practice (Bad)
    Use cross-docking techniques only to move products or materials from third party vendors directly to customer or production facilities.
    Benefits: Reduce inventory handling costs by minimizing (or eliminating) the time that materials or goods need to be stored and improves on-time delivery percentage (to both manufacturing or production facilities and customers).
  • Best Practices (#124) / Materials Management / Quality Control

    Best Practice (Good)
    Create a uniform communication plan to all members of the product quality team (managers, quality analysts, front-line workers) so they are aware of issues and can suggest improvements and proactively prevent them.
    Typical Practice (Bad)
    Report product quality problems only to the necessary stakeholders within the product quality team.
    Benefits: Reduces the percentage of customer orders being damaged in transit if an additional level of quality is assured.
  • Best Practices (#125) / Materials Management / Quality Control

    Best Practice (Good)
    Emphasize quality control when orders are being packaged by implementing a formal quality assurance process for packaging on all outbound orders.
    Typical Practice (Bad)
    Ship orders out as rapidly as possible, emphasizing deadlines and efficiency within the outbound packaging process.
    Benefits: Reduces the percentage of customer orders being damaged in transit if an additional level of quality is assured.

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