MATERIALS

MANAGEMENT
DEFINITION by Bethel:
Materials Management is a term used to indicate
controlling the kind, amount, location, movement
and timing of the various commodities used in
and produced by the industrial enterprise.
Materials Management controls the procurement,
storage, amount, movement and consumption of
materials that can be used by a company for
production process. It covers various aspects
of materials and supplies the necessary
materials when required for converting them
into finished products.
 Functions of Materials Management:
vMaterials Planning
vMake-or-buy decision
vPurchasing
vReceiving and inspection
vStorage
vInventory control
vDistribution of materials
vTransportation
vDisposal of surplus, obsolete and scrap
materials
vDeveloping new sources of supply
vImport substitution
vMaterials Research
vWaste management

v
Materials Planning:
Determines the needs of the consumers in
advance translates sales projection into
production requirements and makes accurate
estimation of materials that are required for
production.
 v
v
v
v
Make-or-buy decision:
Decides which items can be produced at the
home plant and which should be obtained from
the outside sources based on the cost
available for the production.
Purchasing:
Provides constant supply of raw materials,
parts, components and consumables to meet the
target of the production.
Receiving and inspection:
Collects materials and inspects them to ensure
their quality. This helps to decide whether the
materials should be accepted or not for
further production.
Storage:
• Provides right place to store
• Uses proper methods of preservation
• Proper security against theft and
malpractices.
• wastage of materials while storing
them will be minimum.
Inventory control:
Maintain optimum investment in inventories and
also ensures supplying materials.
Distribution of materials:
Ensures the fastest and efficient supply of
materials to the customers.
Transportation:
Ensures efficient transportation of incoming
and outgoing materials.
Disposal of surplus, obsolete and scrap
materials:
Analyze the requirement of materials and
select the most economical channel to dispose
off the materials that are surplus and not
control.
Materials Research:
Analyze all the factors such as economic
analysis, market analysis, price analysis,
transportation analysis, lead-time analysis etc.
that affects the functions of the materials
management.
 objectives of Material Management

Maintenance of records
Disposal of surplus materials Immediate flow of materials

Reduction of wastage of materials
Consistency of Quality

Objectives of Material Management

Preservation of materials
Improve cooperative image

Reduce inventory investment Improves firm’s strength in the market
Reduce inventory investment