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Materials Management definition

 
 

Materials management as a definition is the process which integrates the flow of supplies into, through and out of an organization to achieve a level of service which ensures that the right materials are available at the right place at the time in the right quantity and quality and at the right cost. It includes the functions of procurement, materials handling and storage, production and inventory control, packaging, transport and associated information systems and their application throughout the supply, manufacturing, service and distribution sectors."

Material Management is responsible for purchasing the highest quality equipment and products at the lowest possible cost for the organization.
Material Management is also responsible for

managing purchasing, inventory control functions, shipping and receiving, also planning and administering department budgets.
Production Control, Purchasing, Master Scheduling (Demand Planning) and Warehousing. Controlling costs of Purchases with PPV also is key.

Material management is defined as a function of not only receiving material, storing materials, purchasing, but an overall function of an organisation. It constitutes the major cost for the organisation, and a low profile of the department should be maintained to curtail costs, so the organisation could go making profit. As materials constitute 70% of the bulk requirement the possibility is to curtail cost to the minimum. You have encountered checking, inspection, quality control function of material management. But till date no importance is given to these functions.

 

Managing all inputs and aspect of materials for a process oriented business, controlling the cost of materials, appropriate quality needs for an applied requirements, developing of product or materials, controlling inventory, warehousing and logistics cost to the best minimum possible, apart from considerig the taxation part of importing goods, managing of getting the support on any receipt of goods / services within the timelines of warranty clause and of course see the function as a profit centre, which is internally controlled more rather then having other costs influenced with externally controlled...

Materials Management can be defined as a process which integrates all activities related to Materials, right from the recognition of need for materials to the ultimate despatch of finished goods to the ultimate consumer. Its activities includes flow of Materials requisition from the user department to Purchase, floating tenders, receiving quotations, making comparative charts, placement of PO, receiving goods at Stores, documentation at Stores, inspection and approval/rejection of goods, storage at the right bins, issuing against requisitions. Timely inventory verification and valuation. Receipt of finished goods and despatch to various places as asked for.

Materials Management covers procurement, receipt /storage and distribution till cash receipt from end-user. The objective is end-user satisfaction at minimum cost of ownership, inventory minimization shall release the capital tied-up effecting the profitability increase.

The planning and control of the functions supporting the complete cycle of flow of materials, and the associated flow of information. These functions include Standardization, need determination,

 

scheduling, procurement, inspection, quality control, storage, inventory control, distribution, and disposal.

Materials Management is equal to the total flow process of goods and services from the request stage to supply and from the supplier back to user department ensuring the compliance to the 5R's. It involves the management of the process that is called supply chain which includes procurement, sourcing, transport, safety, warehousing and distribution.

Materials management is by definition ,a process of handling materials and services for a business organization in most optimum manner so as to provide services at a predefined service level to its customers at an optimum cost to the organization.

Material management is an important aspect in every organisation, but no importance is given to the subject in any organisation, since every organisation wants to make profit, and the accounts department do the manipulation of profit ratios. Since in procurement we ask the supplier to reduce the price, the warehouse maintained optimal level of all materials so as to reduce inventory cost, and transportation reduces cost on transporting material at a lower cost, and so and so forth.

 
 

Materials constitute 60 to 70 % of the expenses in any activity, hence the efficient buying , utilisation and rebuying to meet the need or demand for achieving a desired output, at the optimum cost and in the least time, with meeting or exceeding the expectations of the customer or consumer is called the Management of Materials.
In today's changing needs and tastes of the customer / consumer, It is becoming challenging to the manufacturer / supplier to deliver the product or service to meet or exceed the consumers delight.
Hence it is a driving the people and process to bench mark the product and keep delivering the customer every time and on time.

Material management is a scientific technique, concerned with Planning, Organizing & Control of flow of materials, from their initial purchase to destination.

Material management was considered as any scientific technique but it was the way how materials were managed. Procurement, Good vendors, reliable vendors, Materials received in time, Stocking of materials, Accounting of materials, Organisation the Stores, Organisation of Distribution, Taking Care of the Customer, Service, Spares all this constituted a way to Materials Management. They involved simple methods of work.

Materials Management needs to be looked at differently in today's changing markets. MM not only managing the tasks involved in the flow of materials, but investigating if the flow of materials is efficient or wasteful, finding where the waste exists and making necessary changes to eliminate the waste.

Today we must manage materials by using lean concepts, evaluating the time in which the material takes to flow in/out to the customer, and documenting the costs in simple measurable terms that get attention. MM owns the management of the "data" for procurement, production scheduling, inventory levels, shipping schedules, etc.

To eliminate waste MM must partner with Production, Accounting and IT and take the lead role in presenting key MM data that shows waste in the following areas: inventory, overproduction, defective material, material wait/queue time, over processing, under/over utilized assets and unnecessary movement.

MM can no longer just "process" the tasks involving material flow, but lead others to "see" the wastes in these tasks so they can be improved.


The flow of material should be uniform in line with the production requirement. No additional material should come into the stores, and there should be a co-ordination with production department. Accounts department should take into the system of auditing the flow of materials, excess materials, shortage of materials, and obsolete materials lying in stores. Improvement in wastage of material, excess materials should be taken care and should find an alternate source to use materials, or dispose of the materials to organisation where it can be reused. Proper control of material flow is required to curtail unnecessary costs.

Planning/procuring the materials as per user requirement/ as per production plan so that inventory build-up in not there as well as production fluctuation is absorbed is the real materials management. In real life inventory can not be eliminated hence a proposition for minimising the same and meeting the requirement is the task of MATERIALS MANAGEMENT

Materials without any hurdles in movement for daily activities of an organization at an optimum cost.

MM is the control of the full process from suppliers development, negotiate and buy the raw materials and MRO items in order to ensure the smooth work in the company. Also controlling the inventories on each process step in order to guarantee deliveries on time 100% to our customer. Monitoring the costs.


Material management has got a vast meaning. It starts from the initial stage when materials enter the premises of a manufacturing industry/service industry. The requirement, procurement, receiving, controlling, stacking the materials. It crosses many ups-down of the industries.

The essence of Materials Management is simply the flow of materials should be in such a optimum way that neither the men have to wait to the materials nor the materials have to wait the men. Such a concept itself defines that inventory is maintained at optimum level & restrict the unnecessary blockage of cash.

 

 
 
 

 

 

 

 

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