Material Management

Material management

Topics for discussion vintroduction vDefinition vmeaning vScope of material management vWhy material management is necessary vObjectives of material management -primary objectives -secondary objectives v

Introduction to the topic Material management is an approach for planning, organizing, and controlling all those activities principally concerned with the flow of materials into an organization. The scope of materials management varies greatly from company to company and may include materials planning and control, production planning, purchasing, inventory control and stores, in-plant materials movement, and waste

Definition Materials Management can be defined as that function of business that is responsible for the coordination moving,

of

storing

planning, and

sourcing,

controlling

purchasing,

materials

in

an

optimum manner so as to provide service to the customer, at a pre-decided level at a minimum cost - web definition

Meaning it is a business function for planning, purchasing, moving , storing material in a optimum way which help organization to minimize the various costs like inventory cost, material handling cost and distribution cost.

SCOPE OF MATERIAL MANAGEMENT v Emphasize the acquisition aspect; v Inventory control and stores management, v To materials logistics, movement control and handling aspects. v Purchasing, supply, transportation, materials handling etc., v Supply management’ or ‘logistics management’ v Covers all the interrelate activities concerned with materials.

five M’s of an industrial organisation vMEN vMONEY vMACHINE vMATERIAL vMETHODS

Why material Management ?

Amount spent on material is increasing in relation to the expenditure on other inputs

It offers considerable scope for reducing cost.

Important form of current asset in organisation

It adds value to the product

Contribute to the quality of end product

Social responsibility of business

Important for safety of people and environment

Objective of material management • Three basic objectives are v buying/purchasing v storage v movement

Objective of material management

buying

vPay low price for best value obtain vNegotiation vVendor selection vRight quality on right time

Storage

Storage

vMinimizing transportation and material handling cost vAdequate and proper storage and preservation vStore as per requirement

Movement / Distribution

Movement / Distribution vdistribution of finished good to customer vDisposal of raw material

Primary objectives of material management

vLow price vHigh inventory turn over vLow cost acquisition and possession vContinuity of supply vConsistency of quality vFavorable supplier relation vGood record

Secondary objectives of material management vNew materials and products vEconomic make- or- buy vStandardization vProduct improvement vInterdepartmental harmony vForecasts

Importance of material management vLower prices for material & equipment vFasten inventory turnover vContinuity of supply vReduce transportation cost vReduce material obsolesce vBetter inter-departmental cooperation vBetter record keeping and

Merits of material management • • • • •

Helps to save cost Efficiency in work Best control over inventory Best utilization of resources Reduce fault and damages

demerits • Continuous observation is require • It requires good infrastructure facility which may need huge investment • Extra man power can require