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