MM/U1 Topic 5 Understanding of Materials Research
(1) Economic Analysis
It is an integral part of materials research as various aspects of materials are closely related to the economy of the country. In a planned economy like India, the need for such a research cannot be over emphasized. Research on materials is aimed at taking into long term and short term economic matters.
Facts such as GNP, inflation, business cycles etc. that may affect the availability and consequently the price levels of the raw materials form the scope of raw materials research. Materials research can be interpreted in a way as an attempt to keep the materials management alert for a multipronged attack on all the factors that may eventually affect matters adversely.
(2) Market Analysis
In materials management, market analysis is a must. A firm has to estimate its requirements over the next five to ten years to achieve its objectives. The markets should be analyzed to assess supply trends, technological innovations, and evolution of new materials, standards and substitutes. There are materials which are classified as ‘critical’ from the point of view of the company.
They are marketed as ‘critical’ apprehending their shortage in future. They are isolated for management’s attention. Through market analysis, this is done because it has been proved that materials play a very important role in the progress of technology.
With the steel coming into the market as a major material of engineering, aluminum became the commercial metal and celluloid and Bakelite were invented bringing about a technological change in the industrial world.
(3) Supplier Analysis
To ensure continuous supplies, the suppliers’ analysis is done. It also helps in planning for future operations. To analyze suppliers, a checklist of the present and future suppliers is the first step. On the basis of the capacity of the suppliers, an estimate can be prepared as o how much can be expected from different suppliers.
If needed, now sources have to be tapped for suppliers when there’s apprehension for stoppage of suppliers. Regular inspection and critical evaluation constitute a regular part of supplier analyses to ensure continuous supply at competitive price of the quality arterials.
(4) Transportation Analysis
Materials research extends its research scope on transportation of materials. The cost of transportation for materials forms a cognizable art of the total cost of finished goods. Scrutiny of the components of transportation costs is made and after proper analysis suitable steps are taken to reduce transportation costs.
(5) Price Analysis
Continuous price analysis is of unquestionable importance in materials management. Price increase is a regular feature in the world economy today and a constant watch over this increase is necessary to assess its impact on the cost of raw materials that ultimately affects the price of the finished products. For price analysis, a detailed study of the cost structure is conducted.
(6) Purchase Analysis
From who to purchase — from a manufacture or from a dealer — is an important question posing before a producer. To decide this question, the cost benefit analysis is necessary and it must be done in vertical integration of critical raw materials and components.
In such an integration process, the company decides to manufacture some o the critical raw materials and components. As for instance, generally steel manufacture acquires a coal mine, essential in steel manufacturing. Decisions like these are taken in the long term interests of the company after thorough research.