As a manufacturer, how can I ensure that I don't have a surplus of raw material? What factors must I consider?

Understand the production requirements, the waste values and materials requirements. Coupled with this is the need to understand the supplier lead times for their production, their localised logistics and the freight aspects. 

1)when demand of product is more than production2)when sale of product is more than productity following factors you must consider a.quality of products b.behaviour with customers c.advertising d.presentation c.guarantee card of products f.transportation g.gift for every customer h.insured customers that you have sufficient products for all customers

1) Major factor for surplus is poor planning.

2) Major factor for pool planning is uncertainty due to:

a. Poor input information (Historic information, future sales & production plans, transparency, etc) > Enhance information quality through clear simple WBS.

b. Long delivery cycles > Shorten delivery cycles when possible by localization, resourcing, Kanban or similar techniques implementation when possible,  etc.

c. Product diversity > Allocate capacities for as small number of end items as possible (Product planning phase), work on communization of raw materials between products (Design phase), and parts when possible.

d. Improve product quality to raise volume certainty. 

 

Supply chain management (SCM) is a process used by company’s to ensure that their supply chain is efficient and cost-effective. A supply chain is the collection of steps that a company takes to transform raw components into the final product. Typically, supply chain management is comprised of five stages: plan, develop, make, deliver, and return.

An accurate Plan, considering:

1- the sales targets in quantities for 3 months forecasting.

2- available stocks in warehouse and the adequacy to an agreed production.

3- stocks of materials which are in Facility under production process.

4- orders of materials that are going to be delivered in accordance to the sales requirement and the time required to produce them into salable products.

Okay there is various ways of doing this, taking into consideration the dollar, now look at the following scenario, what is the overall growth of the manufacturing  plant, is the constant demand and what is the backlog time for delivery of goods etc? Now if your items are non perishables look at the capital growth and current financial stability of the company in concern. If a surplus of funds is available and storage warehousing is no issue, should the dollar  drop consider that if you have a surplus or purchase a surplus at this time it only spells profitability for the business, look more at justification based on this as when the dollar rises the is higher profitability for the business in concern. an overall look at surplus and concern is that when stock stands and manufacturing continues. Look at the marketing of the business, there strategies in play and look at distribution expansion. Don't look at it as a negative point look at the endless possibilities and the ability to provide on demand and not have a backlog of production time.

I hope this help all the best in your Endeavors. Best Regards Shakir Tajudien

when demand of product is more than production and also We will have to maintain the Inventory Register/Tracker/ Online Application,

We will have to maintain the Inventory Register/Tracker/ Online Application, where in we can check the current inventory available and parallelly we have to maintain the inventory issuance tracker/register by which we can reconcile the issuance inventory and material in stock.

Proper Inventory Maintenance, 

Demand forecasting: Planning how much quantity will be required of the finished product, for this a good relationship with the vendor/market is of utmost importance.

Market research: Firm invest a lot of their resources in continuous market research, getting to know their customers and end users. This helps to guage the value you provide to your end users. If there are any glitches they can be fixed in time to avoid huge pitfalls.

External forces: the Micro and Macro economic forces play a major role in demand generation or demand deficits, any firm that does'nt keep themselves updated on a daily basis, can lead to a spiralling downfall due to misinformed decisions.

JIT method: this method helps reduce storage and is based on the principle that you order only based on the amount of finished products order you have on hand, this avoids wastage of space and holding costs.

Price and Availability: Ensure that if the product cost is constant and that if the demand is not likely to increase to  great extent then there is no point holding vast quantities.