All industries need to focus on best practices in supply chain management to cut costs and remain competitive in the market, vice-president (south) of the Indian Institute of Materials Management N. Udaya Bhanu said underscoring the importance of the role of cost accountants in any company.
Addressing the media here on Thursday to mark Materials Management Week celebrations in the Visakhapatnam branch of the Indian Institute of Materials Management, he said that Materials Management Day would be celebrated on Sunday. On Sunday lectures would be delivered on the theme of innovative supply chain management. “Previously, we used to call it purchase management and later materials management. But now we are calling it supply chain management, covering the entire gamut from procurement of raw materials to the supply of finished product to the end-user. Logistics is the most crucial component of the chain. Usually, 80 per cent of the cost is spent on 20 per cent of items. Therefore, we have to analyse the chain carefully and decide the optimum inventory levels for each industry,” he explained.
For steel plants, for instance, iron ore reserves of 7-10 days or dolomite reserves for the same period would be enough. But in the past much larger inventories had to be maintained, cutting into profitability. Even for coking coal imported from Australia, inventory of 15-20 days would be enough for the steel industry, as the international suppliers would honour the agreements. The Asia-Pacific Convention on Materials Management, held once in 12 years, would be held in Bangalore on May 16 and May 17, Mr. Udayabhanu said. IIMM Visakhapatnam branch is organising a number of events to mark the week, vice-chairman of the ICAI Prakash said. Branch course director S. Prabhakara Rao spoke.