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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
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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.
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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,
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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.
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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.
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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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