Material Material management management

Topics for discussion vintroductionvDefinitionvmeaningvScope of material managementvWhy material management is

necessaryvObjectives of material

management -primary objectives -secondary objectivesvImportance of material

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 of planning, sourcing, purchasing,

moving, storing and controlling 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

vEmphasize the acquisition aspect; vInventory control and stores management, vTo materials logistics, movement control

and handling aspects. vPurchasing, supply, transportation,

materials handling etc., vSupply management’ or ‘logistics

management’ vCovers all the interrelate activities

concerned with materials.

five M’s of an industrial five M’s of an industrial organisation organisation

vMENvMONEYvMACHINEvMATERIALvMETHODS

Why material Management Why material Management ??

Amount spent on material is Amount spent on material is increasing in relation to the increasing in relation to the

expenditure on other inputsexpenditure on other inputs

It offers considerable It offers considerable scope for reducing cost. scope for reducing cost.

Important form of current asset Important form of current asset in organisationin organisation

It adds value to the It adds value to the productproduct

Contribute to the quality of Contribute to the quality of end productend product

Social responsibility of Social responsibility of businessbusiness

Important for safety of Important for safety of people and environment people and environment

Objective of material management

• Three basic objectives arev buying/purchasingv storagev movement

Objective of material management

buyingvPay low price for best value obtain

vNegotiationvVendor selection vRight quality on right time

Storage

StoragevMinimizing transportation and

material handling costvAdequate and proper storage and

preservationvStore as per requirement

Movement / Distribution

Movement / Distribution

vdistribution of finished good to customer

vDisposal of raw material

Primary objectives of material management vLow pricevHigh inventory turn overvLow cost acquisition and

possessionvContinuity of supplyvConsistency of qualityvFavorable supplier relationvGood record

Secondary objectives of material management vNew materials and productsvEconomic make- or- buyvStandardizationvProduct improvementvInterdepartmental harmonyvForecasts

Importance of material management

vLower prices for material & equipment

vFasten inventory turnovervContinuity of supplyvReduce transportation costvReduce material obsolescevBetter 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