What is Material Management?
Materials management is a central feature of the supply chain management and it includes the preparation and implementation of supply chains to meet a company’s material requirements. Controlling and regulating the flow of material while continuously evaluating variables such as demand, price, availability, quality, and delivery schedules are among these requirements.
Material
managers evaluate the amount of material needed and kept in stock, prepare for
replenishment, maintain inventory levels for each type of item (raw material,
work in progress or finished goods), and convey details and specifications to
procurement and the extended supply chain. Materials management also entails
evaluating material quality to ensure that it satisfies consumer needs when
adhering to a production schedule and at the lowest possible cost.
Material management systems include all material-related operations and are a fundamental business feature that adds value to the finished product. It may also involve the purchase of machinery and other production-related equipment, as well as spare parts.
What Is The Function of material management?
- All aspects of material prices, and supply, are covered by material management. The most common functional areas involved in material management include purchasing, quality control, shipment, receiving, and stores.
Material control is divided into the following functions:
1. Material and Production Control:
The production manager creates production plans for the
future. Parts and content specifications are dictated by production schedules.
Orders are issued or projected demand for products and used to establish
production schedules. Any form or component of the material is made available to
ensure that manufacturing runs smoothly.
2.Purchasing:
Based on requisitions provided by other departments, the
purchasing department can make purchasing plans. This department manages
supplier contracts and gathers quotations and other information daily. This
department works hard to find high-quality products at fair prices. Purchasing
is a managerial practice that encompasses tasks such as planning and policy
development, as well as a variety of relevant and complementary activities.3.Non-Production Stores (NPS):
Non-production products, such as office equipment, perishable instruments, and maintenance, repair, and operating supplies, are kept in stock according to company needs. Although these items are not needed on a daily basis, their availability in stores is critical. In the event that certain stores are unavailable, work will be halted.
The following is a summary of the significance of material management
1. The proportion of overall cost related to material costs is held to a fair amount. Scientific buying helps in the acquisition of goods at competitive prices. The proper storage of materials also helps in the reduction of waste. These provided insight in the management of product cost
2. Indirect material costs are held to a minimum. Since there is no proper control over such materials, the cost of indirect materials may often raise the overall cost of production.
3. There are no breakdowns due to late inventory deliveries, so the equipment is fully used.
4. There is no loss of direct labor.
5. Material wastages at the storage level, as well as their movement, are kept under control.
6. Materials are delivered on time, with just a few cases of late delivery.
7. Material investments are kept under control by preventing the bottleneck situation happen in the company.
8. Congestion is eliminated in supermarkets and at various levels of production.
Below is the video of how the process of material management on the company :