The conversion of input to output can be visualized as the flow of materials into, through and out of the system. Material management can be defined as the grouping of management functions supporting the complete cycle of material flow from the purchase and internal control of work in progress to the warehousing, shipping and distribution of finished products.
Material management as a function is responsible for the coordination of planning, sourcing, purchasing, moving, storing and controlling of materials in an optimum manner so as to provide a pre-decided service to the customer at the least (minimum) cost possible.
All these functions have to be handled together (integrated) by efficient managers to ensure balance between these functions as well as achieving the optimum results out of the production process that is consistent with the overall organizational goals and objectives. Hence, it is important to follow an integrated approach to materials management.
Objectives of Integrated Materials Management -
- Procuring better value
- Obtain better yield
- Reduce the investment in stock keeping through inventory control and material flow.
Advantages of Integrated Materials Management -
- Better Accountability
- Better Coordination
- Improved Performance
- Adaptability to latest technology and computerization of activities
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These notes are intended to give you a quick summary and recap of Services vs Products and help you answer questions such as -
- What do you mean by an integrated approach to Material Management? Explain.
- State the importance of materials management. How does material management affect the productivity of the system ?
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