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Materials Management

Intro, Definition, Functions,


Objectives, Stages, Factors
responsible, Importance.
Material Management.

 Material includes all the things from raw


material to semi-finished and finished
goods.
 It has great significance as it has direct
relation with the efficiency of a system.
 Generally every manufacturing unit has
25% to 75% of sales turnover
investment in materials. Which makes it
critical part.
Material Management.
 Expense made on Materials is invested in
inventories, storage, transportation, insurance
etc.
 Previously only Marketing and Manufacturing
were considered as important activities of an
enterprise.
 Material management has gained its
importance due to costs involved and
economizing the total activity.
 Material Management is basic function of
business that adds directly to value of product.
Definitions.
 Material Management is a term used
to connote “controlling the kind,
amount, location, movement and
timing of various commodities used in
production by industrial enterprises.”
 Material Management is a basic
function of the business that adds
value directly to the product itself.
 Material management deals with
controlling and regulating the flow of
material in relation to changes in
Material Management.
 MM covers various aspects of input process, like
it deals with Raw-Materials, procurement of
machines, other tools and necessary spares for
the maintenance.
 MM is preliminary to transformation process.
 It involves planning and programming for
procuring of material and quality goods of
desired quality and specification at reasonable
price and at right time.
 It involves being up-to-date with market
information, stores and stick control, inspection
and transportation of materials.
Functions of Material Management.

 The responsibility of material


management ends only when the
correct finished product in proper
condition and quality passes to the
consumer.
-Bethel
 General Electric Company (G.E.C) of
USA, pioneers in the field of material
management listed the functions of
Material Management under the
following heads:-
Functions of Material Management.

1. Planning and programming for


materials purchased.
2. Stores and stock control
3. Receiving and issue of material.
4. Transportation and material handling.
5. Disposal of Scrap and surplus material.
6. Value engineering and value analysis.
Objectives of Material Mgt.

1. Material selection.
2. Low operating costs.
3. Receiving and controlling materials.
4. Issuance on receipt of app. authority.
5. Identification of surplus stock and take
measures to reduce it.
Organization of MM department.

 The Materials manager has 4 important


duties. For which he appoints
managers under him, viz.
2. Purchasing.
3. Production Control.
4. Inventory and stores control.
5. Physical distribution.
Stages of Material Management.

1. Decision Stage.
2. Sourcing stage.
3. Production planning stage.
4. Stage of ordering.
5. Receiving stage.
6. Inventory control.
Factors providing Economy to MM.

1. Volume of purchases.
2. Plant near the source of Materials.
3. Fluctuations in prices of Materials.
4. Design and engineering of product.
5. Design of equipment.
6. Pre-Inspection of material.
7. Specialized agency for purchasing.
Importance/Advantages/Benefits

1. Regular supply is ensured, aiding for


uninterrupted production process.
2. Procurement and transportation costs can be
controlled and checked.
3. Efficient stock and stores control minimizes
waste.
4. Pre-inspection of RM minimizes chance of
rejection of final product.
5. Timely supply and other inputs is ensured.
Importance/Advantages/Benefits

1. Best utilization of labor, capital and


equipment is ensured.
2. Congestion in stores and confusion
can be avoided, resulting in better
services.
3. Manufacturing Cycle is reduced to min.
4. Slight changes in material costs,
changes the profit statement of the co.
5. Shortages can be eliminated.