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Integrated Materials Management

Various functions served by materials management include the material planning, purchasing, receiving, stores, inventory control, scrap and surplus disposal. All these functions can have separate working norms including the one for  performance.

 

Efficient management of input materials is of utmost importance in a business organization for maximizing materials productivity, which ultimately adds to the profitability of the organization.

This requires well coordinated approach towards various issues involving decision making with respect to materials.
All the materials related activities such as material planning & indenting, purchase systems & procedure, variety reduction through standardization & rationalization, reducing uncertainties in demand & supply,

handling & transportation, inspection, proper storage & issue of materials to the internal customers, inventory management, vendor management & finally disposal of obsolete, surplus & scrap materials etc. taken together is termed as Integrated Materials Management.
 

For example , while inventory manager would like to have minimum level of inventory to show of his performance , Purchasing manager would like to place bulk orders in order to lessen his work load and show discounts as reductions. Both of these acts may be little contradictory from the organisational point of view. That is if some of the functions were to be handled separately, a conflict of interests may occur.

Therefore, the conflicting objectives need to be balanced and intertwined from a total organisational viewpoint so as to achieve optimum results for the organisation as a whole.

In an integrated set up
, one materials manager (usually the chief) is responsible for all such inter related functions and he is in a position to exercise control and coordinate all the activities with a view to ensure proper balance of the conflicting objectives of the individual functions.
 

Integration also attains the synergetic advantage in terms of eliminating water tight compartments that set in in a disjointed environment of working. The resulting benefits can be seen in terms of rapid transfer of data, through effective and informal communication channels.

This is crucial as the materials management function involves handling vast amount of data. Therefore, integrating the various functions  identify themselves to a common materials management department which in turn results in greater coordination and better control.  Now a

 

days , in many tradition bound companies too, even the spare part planning which hitherto was done by the operation people has been brought under the umbrella of an Integrated materials Management.

Better accountability ,better coordination, better performance, better adaptability to EDP are some of the tangible advantages of the Integrated Materials Management besides a perceptible team spirit , morale and cooperation are the intangible gains.
 

Training and development of staff and executive through rotation of people is another great advantage because of a bigger canvas produced by integration of Materials function.

To carry out these functions efficiently, it is essential  

 

to have a very good supplier base, order booking process & inventory management system as well as expert Materials Management (MM) professionals

 

 

Objectives of MM:

Purchasing :

Pay low price for the best value obtained
Negotiation
Vendor selection
Right quality at right time

Storage :
Minimising transportation and handling costs
adequate and proper storage and preservation of materials
store as per requirement

Movement :
distribution of finished goods to customer
disposal of raw material

 
 

 

 

 

 

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