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About SM Foods:
Address and location:
Founded in 1977.
Founder : SM Shetty.
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Products:
☻Baby pops.
☻Minis.
☻Simba junior.
☻Simba junior.
☻Wagon wheels.
☻Treo.
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Materials Planning:
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Materials Planning for SM Foods:
(e) This has 2 benefits; firstly the money flow is not blocked
and secondly the best qualities of snacks are produced
since fresh raw material is used.
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For SM Foods
Raw materials:
(b) Wheat flour, rice flour and the spices and chemicals
needed for making the seasoning and flavoring is
purchased from the local vendors.
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Inventory Management
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Inventory Management for SM Foods :
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Raw materials:
Work In Progress:
Pallets made of flour which are as yet non fried and non
flavoured, mixture of spices and preservatives.
Finished goods:
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Vendor Development
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• Flexibility:
• Location:
• Price:
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(b) How financially stable is the supplier.
Vendor Evaluation and Vendor Rating
• Reliability:
• Technical capability:
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• Convenience:
• Availability:
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Vendor Development Management for
SM Foods:
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Stores Management
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• The storage space has to be equipped with proper
ventilation, humidity control, temperature control
equipments etc. depending upon the material that has
to be stored i.e whether it is a solid, liquid or in
gaseous form, whether it is flammable or whether it
requires low temperature or if it is valuable etc. all
these factors play a major role for building a storage
space.
• Location:
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(e) There must be proper entry and exit for goods.
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Functions of Store Keeping:
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cost incurred due to deterioration, damage and pilferages of
materials.
Stock Verification
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Stock Verification for SM Foods:
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Standardization
Advantages of Standardization:
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• Inventory carrying cost can be reduced due to variety
reduction.
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(d) The printing on the packets i.e. the colour etc. also is
standardized. This is because if the packets look different
or if the colour doesn’t look same every time there is a
chance that the customer might consider it as a duplicate
copy and refuse to buy it.
(e.g. the product peppy has 3 p’s in it, if by chance there is a
printing mistake and the name is pronounced as pepy or
pappy etc. the consumer will definitely think that it is a
duplicate made by another company).
(g) If the pallets after frying are small than more amount will
go into the packets and its weight will increase, also the
nitrogen that goes into the packs is small. This might
result in excess quantity and a risk of breakage. Similarly
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if the pallets size is more after frying than less quantity
will go into the packs then what is actually needed.
Purchase Management
(a) Availability:
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(b) Need:
(c) Price:
For SM Foods:
(a) Since the basic raw materials such as wheat flour, rice
flour, etc. are available throughout the year, there is
no need to stock in large quantities.
(b) All the snacks have the basic raw materials such as
rice and flour, salt, oil etc. in them, these raw
materials need to be such a quantity that it suffices all
the production needs.
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(c) The oil use for frying is palm oil, this oil is not
available in India very easily or of the quality that the
company demands. Therefore this oil is imported
specially from Malaysia. Because the oil has to be
imported its cost is very high due to transportation
and also due to its own high cost.
• Business cycle:
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Business cycle for SM Foods:
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Lead Time
• Order Placing:
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WIP, material in the pipeline and the finished stock.
So orders can be placed accordingly.
• Seasonal Demand:
Products which are available during certain
seasons should be stocked, but we should consider its
price and shelf life before stocking. Sometimes
demand for products goes up during a particular
period therefore adequate raw material needs to be
stocked up to meet the increased demand.
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Quantity and future cost increases:
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Financial Implication of Purchase
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• The important thing to remember is that the business
is all about money, so how, when and where the
money has to spend should be considered. There
should be a continuous flow of money which will
ultimately earn profit for the company.
(d) Secondly as all payments etc. are done from Mumbai, all
the bills, payments, loans, credits etc. is done under one
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roof. Therefore there is no chance of any fraud or
discrepancy etc.
Contract
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Contract for SM Foods:
(c) Also the files of past 12 years have now been converted
to computer documents. This has helped in easy
accessibility and maintenance.
(d) They use the past records for ascertaining the size of
consignments, the vendor certification etc.
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Research and Development:
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Research and Development for SM Foods:
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Negotiations
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discounts etc. from other sources or previous
experiences.
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they have cordial relations who provide the
necessary material and the best terms possible for
them on such a short notice.
Warehousing
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The things to be considered while selecting the site for
warehouse are as follows:
(c) Since the land is rented at a very low cost the company is
able to hire a huge warehousing space with ample
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sections for the different raw materials i.e. separate space
for deep freeze area, for inflammable goods like oils etc.
Conclusion
Materials management is like the very foundation on
which an organization stands and grows. For any organization
to be successful in today’s competitive market has to cut down
costs internally since it is very difficult to expand by increasing
the market share because of heavy competition. Also there are
so many challenges and difficulties posed in a developing
nation like India.
Materials department helps in making financial decisions
easy and also helps in forecasting how much the future
production would cost based on past experience. A good
materials manager can make a dog into a cash cow.
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