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Supply Chain Management Essay

4896 words - 20 pages

Materials Management / 1

CHAPTER I

Materials Management

Introduction
Materials Management is simply the process by which an organization is supplied with the goods and services that it needs to achieve its objectives of buying, storage and movement of materials. Materials Management is related to planning, procuring, storing and providing the appropriate material of right quality, right quantity at right place in right time so as to co-ordinate and schedule the production activity in an integrative way for an industrial undertaking. Most industries buy materials, transport them in to the plant, change the materials in to parts, assemble parts in to finished products, sell and ...view middle of the document...

Planning, purchasing and scheduling are the main functions of materials management. It aims at improved productivity. It is used to reduce the cost, which increases profitability and streamlines the production. Apart from management of material cost and its supply it helps in its proper utilization, transportation, storage, handling and distribution. The market research and forecasting both for sales of company’s product and purchasing of various materials required for producing the product are needed at the planning stage. Purchasing, procurement of materials, transportation, storage, inventory control, quality control and inspection of materials and goods supplied at various production centers before production are also managed as routine work. Materials handling, packaging, warehouse

2 / Materials and Financial Management planning, accounting, scrap, surplus and obsolete materials disposal, finished goods safety and care are the activities managed by the materials management department. Selection of personnel for marketing, purchasing, inventory control, stores management and materials handling and their training and placement is also to be seen by the materials management department This indicates that it is very essential to have a materials management department in any organization to support the management in the production activities. It also helps in the marketing, sales promotion and control of all the types of materials for its quantity, quality and cost.

Definition
The International Federation of Purchasing and Materials Management accept the definition of materials management given below. According to it, materials management is a total concept having its definite organization to plan and control all types of materials, its supply, and its flow from raw stage to finished stage so as to deliver the product to customer as per his requirements in time. This involves materials planning, purchasing, receiving, storing, inventory control, scheduling, production, physical distribution and marketing. It also controls the materials handling and its traffic. The materials manager has to manage all these functions with proper authority and responsibility in the material management department. The historical background about the materials management is as follows.

Historical Background
The scarcity of materials, which was felt during World War I in USA to a very large extent and it, has become difficult for production managers to supply the War goods. This has created it necessary to organize the Materials Management department for managing large inventories in stores and to analyze the problems arising to control and economize inventory cost problems and shortage elimination. The materials management was included as an important function of the management. With the development of principles of scientific management by F.W. Taylor in 20th century, the economic use of materials in all the organizations was critically felt to reduce...

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