Towards Management Excellence

Mar 25, 2022


The MRD Concept is a business thought that is a paradigm shift from the way we look at our business process now. It is about also focusing on the materials resources of an organization as compared to our present main focus on marketing, finance or manufacturing.

The main thought of the MRD concept is to draw attention of the management to focus on the importance of materials resource in an organization and its optimal utilization, avoid wastage, save costs, environment focused and enhance profits.

It is a well known fact that the materials content in a product is about 60 to 70% of the Sales price and all assets in an organization, be it the Plant, offices, machinery, equipments, tools, instruments, vehicles, warehouses are all materials resource based. Therefore, is it not prudent then to focus on this materials resource for its optimum use?

The MRD (Materials Resources Deployment) Concept brings the expertise and the direct users of the materials resources to work together and synergize under one head which is the MRD department and the MRD Head.

Firstly, the MRD department leads to an efficient business process and coordination as all the materials resources related users, engineering, planning, operations/manufacturing, purchasing, warehousing, logistics, R&D, quality control and sales functions come together to work under one head’s coordination and direction to meet the organizational goals. Secondly, this unified front now meets the marketing orders in its entirety and deals directly with the Suppliers and the Customers to meet Customer satisfaction.

This concept looks at the Supplier and Customer relationships as mirror images and therefore we must start working on the Supplier relationship first to achieve Customer satisfaction. This leads to the ‘Profitability Continuum’ when the Supplier benefits you, you benefit the Customer, customer places more order on you, you give more business to the supplier …. all benefit and Profits get shared.

The MRD concept realigning process leads to Marketing, Finance and HRD to partially disassociate themselves from the routine materials related functions and focus on their core business responsibilities and activities for the organization. While, this enables them to perform better in their field, they stand to get better services from the MRD department in terms of lowered costs, quality and timely customer deliveries and return on investments.

The CEO also frees his time from regular and long hours of department coordination meetings with this one point contact- the MRD Head. This helps him focus on the growth and perpetuity of the organization in coordination with Marketing, Finance HRD and MRD.

The MRD team, on the other hand, work synergistically on all aspects to achieve the goals of the organization related to its function.

This enabled team enhances supplier and customer relationships and helps focus on optimum use of all its materials resources and environment care through proper planning, procurement, manufacturing, storage, transportation and use by their customers. It becomes easy to coordinate and implement re-engineering, 6 sigma quality levels, Kaizen-continuous improvement, inventory reduction and other business concepts to reduce wastage, enhance productivity and improve profits.

The MRD way collapses the internal supply chain and takes care of the erstwhile problem faced in the supply chain management within the organization. In fact, MRD is the next level!

Hitherto, the various departments in our present set-up such as materials, manufacturing and others functionally come together to meet the supply chain requirements, but administratively they are under their respective departmental heads. Hence, the supply chain teams are not in a position to take departmental decisions by themselves.

Under the MRD concept, it replaces the internal supply chain as they all come under one head and their work, decision making and responsibilities are aligned to meet the organization’s supply chain requirements. In fact, a part of the job responsibility and performance evaluation of each function and employee in the MRD concept such as planning, materials, manufacturing, engineering, quality assurance and sales is to help meet the other functions targets! This means excellent team work.

This happens because the MRD employees are not only made experts in technical and commercial matters for job excellence but also to appreciate philosophy and spirituality as a core aspect for personal and organizational success through self-belief and integrity.

N. Satishkumar