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Materials Management Short Note

Materials management involves planning for and controlling the flow of materials from procurement through production to delivery. It aims to decrease costs and increase profitability through efficient planning, purchasing, inventory control, storage, and transportation. The objectives of materials management are to ensure materials are available as needed and to enhance departmental efficiency through quality control and supplier relationship management. Effective materials management can reduce overall costs, improve productivity, and streamline supply chain operations.

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954 views4 pages

Materials Management Short Note

Materials management involves planning for and controlling the flow of materials from procurement through production to delivery. It aims to decrease costs and increase profitability through efficient planning, purchasing, inventory control, storage, and transportation. The objectives of materials management are to ensure materials are available as needed and to enhance departmental efficiency through quality control and supplier relationship management. Effective materials management can reduce overall costs, improve productivity, and streamline supply chain operations.

Uploaded by

Worku Chanie Abey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Materials Management Short note

Many industries buy the materials and do the following activities with them in a step by step
manner:

 Transport materials into a plant


 Transform materials into parts
 Gather parts into furnish goods
 Sell products or goods to customers
 Transport products to customers

Materials management does the following activities for the materials requirements:

 Planning
 Inventory planning
 Purchasing
 Storage
 Inventory control
 Supply of materials
 Transportation of materials
 Handling of materials

Important functions of materials management are planning, purchasing and controlling. The
enhanced productivity is its aim and is used to perform the following:

 To decrease the cost


 To enhance profitability
 In production streamline
 In proper utilization of materials
 In transportation
 In distribution

Definition: materials management is defined as a concept in an organization which plans and


control distinct materials, their supply, their flow from the stage of raw materials to the stage of
finished goods and handover goods to customers as per the needs of customers in right time.

 This complete process involves the functions right from planning to marketing and
material management is responsible for all these activities.
Objectives of Materials Management:

The objectives of materials management are of two types and those are as follows:

 Primary objectives and


 Secondary objectives

1. Primary objectives: the primary objectives are as below:

 Planning about efficient materials


 Buying
 Receiving and procuring
 Storing of materials
 Inventory control
 Supply of materials
 Distribution of materials
 Assurance of quality
 Having a good supplier and customer relationship
 Enhanced departmental efficiency

2. Secondary objectives: there are many secondary objectives and few of them are as
below:

 To make decisions
 Scheduling of efficient production
 Make specifications of materials
 Make standardization of materials
 Assisting in design of product
 Assisting in development of product
 Quality control on purchased materials
 Handling of materials
 Availing value analysis
 Availing value engineering
 Advancing skills of workers in materials management
 Easy flow of materials in organization
 Easy flow of materials out of organization
11 Components of Material Management Technical Competencies

1.     Strategic Sourcing and Purchasing :-Strategic sourcing and purchasing is the calculated
decision making process in choosing the right materials of the right quantity, at the right time for
the right time, this includes procurement decisions which involves the selection of vendors, and
materials.

2.     Inventory Management:-Inventory management is the organization of stock control in the


manufacturing to distribution/warehouses and alternately, from the warehouses to the location of
sales.

 3.     Material Requirements Planning:-Materials Requirement Planning is the scheduling,


planning and inventory control process, which dictates the manufacturing processes in terms of
materials required and product output.

4.     Capacity Planning:-Capacity planning is the determination of the amount of products


required by the organization to meet the demands of its customers. The design capacity in turn is
the amount of product demand that the organization is capable in meeting.

5.     Process Planning :-Process planning is the usage of technology to assist in the
manufacturing of products and in the arrangements in meeting the demands set by the
organization.

6.     Demand Management and Forecasting:-Demand management is the method used to


forecast the demand that the organization would potentially be looking at meeting. Forecasting
are methods adopted to predict the actual demand that an organization would be expecting during
a manufacturing cycle period.

7.     Sales and Operations Planning :-Sales and Operations Planning is the synchronization of
the entire manufacturing processes to enable effective supply chain management.

8.     Risk Management :-Risk management is the strategic management of processes in the
manufacturing line through control of static and dynamic materials to ensure that an organization
is able to maintain profitability rather than conduct activities that would increase cost of
production and inventory holding.

9.     Supply Chain Continuity :-Supply chain continuity is the elimination of risks that would
otherwise cause unpredictable breakage in the production line, which would affect the company
performance.
10.  Physical Distribution Management :-Physical Distribution Management is the
streamlining of all processes after the manufacturing of end processes, which includes
transportation, packaging, customer service and inventory control.

11.  Supply Chain Resilience:-Supply chain resilience is the ability of the supply chain to cope
with major shock and its capability to maintain output and customer service.

BENEFITS OF MATERIAL MANAGEMENT


An effective material management system can bring many benefits for a company. Previous
studies by the Construction Industry Institute (CII) concluded that labor productivity could be
improved by six percent and can produce 4-6% in additional savings (Bernold and Treseler,
1991). Among these benefits are:  
 Reducing the overall costs of materials
 Better handling of materials
 Reduction in duplicated orders
 Materials will be on site when needed and in the quantities required  
 Improvements in labor productivity  
 Improvements in project schedule  
 Quality control  
 Better field material control  
 Better relations with suppliers  
 Reduce of materials surplus  
 Reduce storage of materials on site  
 Labor savings
 Stock reduction
 Purchase savings
 Better cash flow management

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