Material Management

Arnav Sharma
MM-262-2K13
CONTENT
Definition
Objectives of Material Management
Purpose of Material Management
Function of Material Management
Focus of Material Management
Advantages of Material Management
Challenges of Material Management





Materials Management
Materials are any commodities used directly or
indirectly in producing a product such as raw
materials, component parts or assemblies.

Materials management is the grouping of
management functions supporting the complete cycle
of material flow, from the purchase and internal
control of production materials to the planning and
control of work in process to the warehousing,
shipping, and distribution of the finished product.
Thomas F. Wallace & John R. Dougherty

Materials management is the management of the flow of
materials into an organization to the point, where, those
materials are converted into the firms end product(s)
Bailey & Farmer

The executive who engage in materials
management are concerned with three basic
activities: buying, storage of materials and
movement.
Main depts. Of MM
Materials planning
Purchase
Stores
Inventory control
Objectives of Materials Management
Is to minimize cost
Procure and provide material at lowest cost
Reducing investment tied yup in inventories
Purchase, receive , transport and store materials
efficiently and reduce related costs.
Continuous supply of materials
Cut down costs through simplification,
standardization , value analysis and import
substitution
Minimizing procedural delays in procuring materials

Purpose of Material Management
To gain economy in purchasing
To satisfy the demand during period of replenishment
To carry reserve stock to avoid stock out
To stabilize fluctuations in consumption
To provide reasonable level of client services


An Integrated approach to materials management
Materials planning
Make or Buy decisions
Purchasing
Receiving and inspection
Storage
Inventory control
Distribution of materials
Transportation
Disposal of surplus, obsolete and scrap materials
Developing new sources of supply
Import substitution
Market research
Waste management


Functions of Materials Management
Materials planning
Purchasing of materials
Reducing store keeping and warehousing
Inventory control
Standardization simplification and value analysis
Transportation and material handling
Dispose of scrap surplus and obsolete materials
Focus of Material Management
To procure right materials
In Right Quantity
Of Right Quality
At Right Time
From Right sources
At Right prices
5 Rs, principles
Advantages or benefits of MM
Material cost can be lowered ( Sales price can be brought
down to a reasonable level)
Controlling of indirect cost (such as materials movement)
Risk of inventory loss minimized (theft, pilferage )
Reduction in loss of time of direct labour
Cost of material used in different department ascertained
Control of manufacturing cycle
Material congestion in storage places avoided
Improvement in delivery of the product
Challenges of MM
Selection of appropriate vendors
Land and storage cost increase
Difficulty in forecasting demand accurately
Scarce capital for investment in materials inventory
Diversification of product lines
Optimizing time and quantity for products
Management of information

http://www.slideshare.net/vishak
eb/materials-management

http://en.wikipedia.org/wiki/Mat
erials_management

MATERIAL MANAGEMENT BY
P.GOPALKRISHAN & M.
SUNDARESAN
REFERENCE
THANK YOU