Materials Management

SUBMITTED TO- MRS. SHAVETA CHUGH

SUBMITTED BY- BARBIE GABA
5716
Introduction

 It is concerned with planning, organizing and controlling the flow of materials

from their initial purchase through internal operations to the service point though
distribution.
 Material management involves organizing and coordinating all management
functions that are responsible for every aspect of materials, storage and
transformation.
Definitions-

 According to L.J. De Rose- “material management is the planning, directing,

controlling and co-ordination of all those activities concerned with material and
inventory requirements, from the point of their introduction into manufacturing
process.”
 According to N.K. Nair- “material management is the integrated functioning of the
various sections of an organization dealing with the supply of materials and allied
activities in order to achieve maximum co-ordination.”
Evolution of Materials Management-

 Root of Evolution- US economy: world war 1

 Before World War 1 (before 1914)- material available in large quantity
 World War 1 (1914-1918)- threat of materials shortage during the war
 1920-21 – heavy inventorying during the business collapse
 1920- control of materials management and the maintenance and repair of
materials was the responsibility of purchasing managers in some industry
 1926-29 – profitless prosperity, prolonged depression, all contributed to a better
understanding of the inventory problem
 1930- better understanding of inventory problems, improved means of
transportation and communication, recognition of unnecessary costs of excessive
inventory, rapid technological changes in product manufacturing.
 Impact of scientific management-
 1939-45 –increase in military personnel and materials requirement in US Defence Force,
entered as a single largest buyer with increasing emphasis on quality standards.
 1945- (after WW1) shortage of material, increased production, population, increased
demand, need of material management
 Birth to an entirely new approach and idea in the management field i.e. Material
Management.
 Extensive studies in industrial purchasing practices by prof. Howard T. Lewis of the
Harvard Business School.
 He made recommendations to many companies for the establishment of a new
managerial position viz. the director of materials (including purchasing, inventory
control, receiving, inspection, warehousing, etc.)
 1970- significant changes
Focus of Material Management-

 To procure right materials-

 In Right quantity
 Of Right quality
 At Right time
 From Right sources
 At Right Prices
Importance-

 Planning and programming of materials

 Purchasing of materials
 Inventory control
 Store keeping
 Waste management
 Stores accounting
 Transportation
 Scope
Scope

Materials
Materials Planning
Planning Departmental
Departmental Inventory
Inventory Other
Other Related
Related
Purchasing
Purchasing
And Control
And Control Efficiency
Efficiency Management
Management Functions
Functions
 Other related functions include-
 Standardisation
 Simplification
 Specifications
 Design and Development of the Product
 Make and Buy Decisions
 Coding and Classification of Materials
 Forecasting and Planning
 Value analysis
 Ergonomis
Objectives-
 PRIMARY OBJECTIVES-
 Efficient materials planning
 Buying or Purchasing
 Procuring and receiving
 Storing and inventory control
 Supply and distribution of materials
 Quality assurance
 Good supplier and customer relationship
 Improved departmental efficiency
 SECONDARY OBJECTIVES-
 Efficient production scheduling
 To take make or buy decisions
 Prepare specifications and standardization of
materials
 To assist in product design and development
 Forecasting demand and quantity of materials
requirements
 Quality control of materials purchased
 Material handling
 Use of value analysis and value engineering
 Developing skills of workers in materials
management
 Smooth flow of materials in and out of the
organization
Integrated Materials Management-

 Integrated material management is a systematic and dynamic process of

management which coordinates, supervises and executes the tasks associated with
the flow of materials throughout an organization in an integrated manner.
Objectives of integrated material
management-
 Better accountability
 Better coordination
 Better performance
 Adaptability to automated and computerized systems.