Concept of material management. Materials Management Definition 2018-12-24

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HISTORY OF MATERIALS MANAGEMENT

concept of material management

Over the years from the simple mechanism of exchange of goods and services. Materials Management can be defined as a process which integrates all activities related to Materials, right from the recognition of need for materials to the ultimate despatch of finished goods to the ultimate consumer. An efficient system of internal control should be introduced to keep material costs inside restrictions. This kind of documentation useful in discussing ways and means of improving performance, acknowledging the existence of good relationships, determining the competence of a vendor, and if necessary considering termination. Meaning of Materials Management: There is no denying the fact that man and materials are two very important resources that demand utmost attention of the management. The user departments also find that they have to approach this common identity for discussing and solving their materials problems. Suppliers play an important role for the organization especially when the organization is very much dependent on the outside suppliers for the materials needed for production.


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Materials Management

concept of material management

World War I From 1914 to 1918 : Threat of materials shortage during 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. There can be more sub-sections of the department but in general, materials manager controls the four major sections and is responsible for reporting to the president of the organisation. All the items of inventories are put in three categories, as below : A Items : These Items are seen to be of high Rupee consumption volume. It is recommended to set the proper purchase policy and procedure. Over the years material management has been restricted to routine purchasing stores etc. Introduction Purchase of raw materials is an integral part of any business, i. It is systematic physical movement of material.


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Materials management

concept of material management

Another theorist, Ammer, Dean 1991 defines material management as the process in which a company acquires the materials that it needs to achieve their objectives. Proper vocation and stocking of materials and maintenance of stores records come within the purview of Stores and Inventory Control. Next function is Make and buy decisions which are the policy decisions of the management. It includes activities of purchase of various types of materials, manage and control of their storage, and flow and supply of these materials to various places. Besides materials management can also help in price, demand and requirements forecasting. This is the most significant component of the completed product and hence, should be handled with supreme concern. Receipt of finished goods and despatch to various places as asked for.

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Materials management

concept of material management

This foreshadows all other objectives, because idle time costs of men and machines push up overall costs of production and expediting supply means additional transport costs. Materials constitute 60 to 70 % of the expenses in any activity, hence the efficient buying , utilisation and rebuying to meet the need or demand for achieving a desired output, at the optimum cost and in the least time, with meeting or exceeding the expectations of the customer or consumer is called the Management of Materials. Therefore, integrating the various functions ensures that message channels are shortened and the various functions identify themselves to a common materials management department which, in turn, results in greater co-ordination and better control. The movement may be horizontal, vertical or combination of horizontal or vertical. Standards describe the quality, reduction in sizes and variety, interchangeably of parts and products.

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Materials management

concept of material management

It's a system of categorization, with similarities to Pareto analysis, and the method usually categorizes inventory into three classes with each class having a different management control associated : A - outstandingly important; B - of average importance; C - relatively unimportant as a basis for a control scheme. In some companies materials management is also charged with the procurement of materials by establishing and managing a supply base. Materials meeting the quality standards is one of the prime objectives of materials management, and normally other objectives are sacrificed for the cost of quality. Materials constituting a major portion of the total cost now demand special treatment and close supervision by a vigilant management. The concept is dynamic; moves with the time keeping itself abreast with the changing industrial environment. Definitions of Material Handling Basic Definition: Materials handling may be defined as the art and science of movement, handling and storage of materials during different stages of manufacturing considered as material flow into, through and away from the plant.

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Materials Management

concept of material management

If above objectives are met, warehouse management significantly increases the overall efficiency of the production and organization. It has to handle all activities related to materials appropriately. Advantages of Material Management Effectual material management system can bring numerous advantages for organization in competitive business such as reducing the overall costs of materials, better handling of materials, reduction in duplicated orders, materials will be on site when needed and in the quantities required, improvements in labour productivity, improvements in project schedule, quality control, better field material control, better relations with suppliers, reduce of materials surplus, reduce storage of materials on site, labour savings, stock reduction, purchase savings and better cash flow management. The materials department is charged with releasing materials to a supply base, ensuring that the materials are delivered on time to the company using the correct carrier. Materials management did not have generally separate management staff but those of the production management used to look after materials. Thus in a production process materials management can be considered as an preliminary to transformation process.

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Basic Concepts of SAP Materials Management

concept of material management

Therefore by analyzing and interpreting data of past sales, seasonal variations in prices, availability and demand for materials, it helps to forecast the future trends and planning of the material requirement accordingly. The incorporation of the functions related to materials into a single department makes it easier to control and identify all the activities related to material flow and costs. The standard dimensions like the inspection, quality control, simplification, specification, and standardization must be considered for the measurement of quality of the materials. Reward had great role to purchasing and materials management in procuring, receiving, inventory control and supply. Materials Management Materials are the physical items that are needed for producing goods and services. Some of the elemental objectives are discussed as below: i Material choice: Right requirement of material and apparatus is dogged. It is, thus, an activity that involves planning acquisition, storage, control and disposition of inputs like raw materials and in-process goods which go into the production process directly and also capital equipment tools and accessories, spare parts and other indirect materials which are required for everyday operations.


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Materials Management Definition

concept of material management

Inventory at different levels is required to confirm about the availability of all these types of materials and goods and their proper flow from one facility to another at different levels of production centres in a manufacturing concern. The concept of Material Management was strengthen with the research papers published by Harvard University. Quality of the materials is a very important aspect which is needed to be kept in mind while procuring, storing and distributing the materials. It involves planning and programming for the procurement of material and capital goods of desired quality and specification at reasonable price and at the required time. There is a need for material management in organization. The significance of materials to the efficient operation of organizations is increasing more than ever.

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