Definition of material management 


Materials Management is the process of management which co-ordinates, supervises and executes the tasks associated with the flow of materials to, through, and out of an organization in an integrated fashion. There is maximum utilization, conservation, elimination of wastes, and thus avoidance of unnecessary delays.


Objectives of materials management


  • Economical procurement of materials
  • Issuance and timely distribution
  • Store accounting
  • Record keeping
  • Stores control
  • Looking at new supply sources
  • Development of vendors
  • Value engineering
  • Coordinating smooth flow of materials
  • Materials Planning


This is a scientific technique of determining in advance, the requirements of raw materials, ancillary parts and components, spares, etc. given by the production programmed. The overall management planning and control system is a broad perspective within which material planning functions, and materials budgeting are an exercise translated in money terms for its effective functioning, control as well as execution.

The actual planning starts with the information gathered from the annual sales forecasts. production and general business forecast forecasts provide the means for satisfying locational needs, and the general business forecasts provide the means to estimate in advance the trends in prices, wages and costs of other services. While breaking down broad forecasts into specific plans. the next step is to make the price and supply available to confirm to the specific plan. The materials consumption estimation is broken down into specific periods. The quantities are checked against the inventory control procedure, by taking into account the safety stock and lead-time requirements.

Purchasing

Refers to the exchange of goods or services for cash. In other words, it provides the right materials, at the right price, of right quality and quantity at the right time and, from a right source.

Objectives of purchasing:

  • To maintain a continuous supply of materials to support production as well as the schedule Avoidance of duplication of purchases, wastes, obsolescence and delays
  • Adopting proper standards of quality on the basis of suitability Procurement of materials at the lowest possible cost, at the same time ensuring that it is consistent with quality and service requirements Maintenance of the company's competitive position in the market

The purchasing department has the following functions:

Selection of suppliers

  • Analyzing bids
  • Price negotiations
  • Issuing purchase orders
  • Follow-up actions
  • Cost -- analysis and study of market conditions
  • Maintenance of price catalogs, information library etc.