Presented By
CH Manoj Surya
MEANING:
Material is one of the Five M’s of an industrial organization.
The Centralized Authority with the responsibility of
Planning, Procuring, Preserving, Handling, Usage and related
aspects or activities related to Materials are combined is called
MATERIALS MANAGEMENT.
Material Management is the Scientific Technique, concerned
with Planning, Organizing & Control of flow of materials from
their initial purchase to destination.
The Material Management begins with the Supplier and
Ends when the material is either consumed or incorporated into
another product.
AIM OF MATERIAL MANAGEMENT
To Get
1. The Right Quality
2. Right Quantity of Supplies
3. At the Right Time
4. At the Right Place
5. For the Right Cost.
IMPORTANCE :
Scope for reducing cost and improving profit.
Amount spent on inputs higher then other inputs.
Material cost Percent in total cost varies from one industry to another.
percentage of manufacturing groups
above 75 construction, electrodes, tea
65-75 wool, sugar, jute, cotton, yarn,
vehicles, furniture
55-65 cotton textiles, ship building, cables,
electricity generators
45-55 chemicals, cement, pharmaceuticals,
electronics, tyre, machine tools
35-45 fertilizers, steel, cigarettes, transportation,
newspaper, aircraft .
Important form of current assets in any organization.
Quality of the End product.
One of the Centers of Accountability for Performance.
lifeblood of any functioning industrial concern or commercial
operations.
Relationship between the man and material is indivisible.
Materials “Add Value” to the product.
Improving return on investments depends on effective utilization
of materials.
Continuity of Supply
Reduce Lead Time
Reduce Transportation Costs
OBJECTIVES OF MATERIALS MANAGEMENT:
The main focus of materials management is to procure materials for the conversion into
finished products.
PRIMARY OBJECTIVES: SECONDARY OBJECTIVES:
which contributes directly to the which contributes indirectly to the
Achievement of company’s objectives . achievement of company’s objectives.
1. Low prices:
2. Continuity of supply 1. New Materials & Products
3. Consistency of Quality 2. Economic Make-or-Buy
4. Low Payroll Costs 3. Standardization
5. Favorable Supplier Relations 4. Product Improvement
6. Development of personnel 5. Interdepartmental Harmony
7. Low Cost Acquisition & Possession 6. Forecast
8. Good Records
9. Continuity of Supply
PURPOSE OF MATERIAL MANAGEMENT
• To Gain Economy in Purchasing
• To Satisfy the Demand during period of Scarcity
• To Carry Reserve Stock to avoid Stock out.
• To Stabilize Fluctuations in consumption.
4 BASIC NEEDS OF MATERIAL MANAGEMENT
• To Have Adequate Material in Hand when Needed.
• To Minimize the Inventory Investment.
• To Operate Efficiently.
• To pay the lowest possible prices, consistent with Quality
ELEMENTS IN THE MATERIAL MANAGEMENT
MATERIAL MANAGEMENT INFDORMATION SYSTEM (MMIS)
• Which organizes & co-ordinates all management functions that are
responsible for every aspect of material movements, storage &
transportation.
• MMIS provides online information on stock level, work-in- progress,
finished goods, stores & spares.
Organizing for Material Management: Needs independent organizational
arrangement which may be on the lines shown below
Director/Manager of Materials
Purchasing Stores & Inventory Warehouses Other Related
Management Activities
The Head of Material Management may be designated as the director or
manager. Purchasing, Stores, Warehousing & Other related activities may
be subordinated to the director or manager .
MATERIAL MANAGEMENT ORGANISATION
• Treated as an important area of management like Production,
Marketing, Finance & HRM.
• The Material Manger directly reports to the Chief Executive
Officer (CEO).
• It is considered as Service Function or supporting function to
Production
• Organization Structure of Material Management in a Large Scale
Industry where materials form a major part of production costs:
Chief Executive Officer(CEO) or Managing Director
`Manager Manager Manager Manager Manager
(Purchases) (Stores) (Material (Material (Shipping
Planning Handling) & Traffic)
& Control)