Indirect Materials

 09/01/2020
By Dr. Alin Posteucă

Indirect materials have amazing costs in most companies. However, often their standardization and improvement is not a continuous focus for companies (with visible results).

Large variations between system and factual data are often encountered, increasing and generating large and continuous discussions.

Often those involved in operations determine the appearance of special orders with high costs for all kinds of indirect materials (offices are similar), such as:

    • for maintenance (emulsions, cleaning materials, protective materials, etc.);
    • for production (knives, drills, protective materials, cleaning materials, etc);
    • for warehouses (internal packaging, protective materials, cleaning materials, etc.), etc.

Recently, in a prestigious multinational company I did not find any maintenance concern for standardizing the emulsion consumption of the equipment: area name; emulsion type (standardized at the factory level); quantity; duration (stopping equipment – yes or no; if yes then no production is planned for this time); frequency (weekly, monthly).

So is the standardization of indirect materials a challenge and a concern at the operational level (avoiding stops/ slowdowns or non-quality) and an opportunity for cost improvement in your company?

Source: Alin Posteucă on LinkedIn

Dr. Alin Posteucă is a consultant in productivity and profitability, CEO of Exegens® and the author of Manufacturing Cost Policy Deployment (MCPD) and Speed-Based Target Profit (SBTP) concepts. His major research areas include manufacturing policy deployment, manufacturing cost improvement and visible profitability of operational excellence by improving productivity. His recent research includes the impact of Industry 4.0 on planning and developing synchronous profitable operations and on information systems of cost and budget in order to substantially improve the operational unit costs.

He has been actively involved in various industrial consulting and training projects for more than 20 years, delivering training/ workshop programs in Productivity, Innovation, Business Transformation and Leadership for over 5,000 participants.

He has a Ph.D. in Industrial Engineering and a Ph.D. in Managerial Accounting. He has an MBA Degree and a BA Degree in Accounting and Computer Science and he is certified Public Accountant in Romania. He has published in various research journals and presented papers at numerous conferences and congresses regarding Productivity, Profitability and Industrial Engineering.

Dr. Alin Posteucă is the author of Manufacturing Cost Policy Deployment (MCPD) and Speed-Based Target Profit (SBTP) concepts, published in four books at Productivity Press – Routledge/ CRC, New York (USA).