Optimization of Raw Material Cost Using PDCA Cycle

Globally, small and medium sized enterprises (SMEs) constitute a major role in industrial segment. However, their raw material efficiency potential has remained largely untapped due to several barriers. The prevailing approaches on optimization of raw material cost in industry is below par. SMEs are focused on the technological improvements at the operational level but lack a strategic approach. In this study an effort is made to develop a raw material and vendor management system for SMEs by integrating technical and managerial cost (of raw material) saving activities. The major gap found during literature survey shows that the proposed raw material management system have rarely adopted a PDCA (Plan-Do-Check-Act) as a process approach methodology for consistent raw material cost and cleaner production. For the validation of the proposed raw material management system, a case of small sized Indian valve manufacturing industry was selected. The case exhibited an incline of continuous improvement in raw material efficiency in the industry by illustrating PDCA cycles.