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Chapter 15.docx

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University of Ottawa

Chapter 15Materials management is the activity that controls the transmission of physical materials through the value chain from procurement through production into distribution It includes logistics which means the procurement through production and physical transmission of material through the supply chain from suppliers to customers a firms ability to perform its manufacturing function efficiently depends on a continuous supply of high quality material inputs for which materials management is responsible An international firm objective is to lower costs by dispersing the production activities Get low costs from managing the global supply chain efficiently to better match supply and demand Objective 2 increase product quality by eliminating defective products from both the supply chain and the manufacturing process Improved quality control reduces costs by increasing productivity bec time is not wasted manufacturing poor quality products that cannot be sold leading to a direct reduction in unit costslowering rework and scrap costslowering warranty costsTotal quality management TQM management philosophy that takes as its central focus the need to improve the quality of a companys products and servicesDeming argued that environemnt should be created to encourage employees to report problems That they should train employees and that great quality is achieved by commitment from everyone EU requires that products be certified ISO 9000 Certification process that requires certain quality standards that must be met Objective of international businessProduction and materials management must be able to accommodate demands for local responsiveness Local resp creates pressure to decentra
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