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 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
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