Material Management (EBS 365)




Definition: – What is meant by materials management?

Materials management can be defined well if we can figure out what managers do. We know that managers plan, organize, direct, coordinate and control resources. This means we can define materials management as the act of planning, organizing, directing, coordinating and controlling the flow of materials from their initial purchase through internal operations to the service point through distribution.


We can also say that:

Material management is a scientific technique, concerned with Planning, Organizing, Directing, Coordinating and Control of flow of materials, from their initial purchase to their final destination. Materials management is defined as a coordinating function responsible for planning and controlling materials flow.


Functions of Materials Management

Materials management functions include but not limited to:

  1. planning and taking care of materials,
  2. vendor evaluation and selection,
  3. purchasing,
  4. expenditure,
  5. shipping
  6. receiving material,
  7. warehousing and inventory,
  8. and material distribution.

With good materials management practices, we are sure to make available the right materials (both in quantity and quality) at the right time.


Aim of Material Management

To get…

  • the right quality material
  • the right quantity of supplies
  • at the right time
  • at the right place
  • for the right cost


Purpose of Material Management

  • To gain economy in purchasing
  • To satisfy the demand during period of replenishment
  • To carry reserve stock to avoid stock out
  • To stabilize fluctuations in consumption
  • To provide reasonable level of client services

Four basic needs of Material management

  1. To have adequate materials on hand when needed
  2. To pay the lowest possible prices, consistent with quality and value requirement for purchases materials
  3. To minimize the inventory investment
  4. To operate efficiently


What Happens when Materials are Improperly Managed?

  1. materials shortages,
  2. delays in supply,
  3. price fluctuations,
  4. damage and wastage,
  5. and lack of storage space.

Thus, any improper handling and management of materials will cause a huge effect on the total project cost, time and quality.


Importance of Materials Management

Material management is an important management tool which will be very useful in getting the right quality & right quantity of supplies at right time, having good inventory control & adopting sound methods of condemnation & disposal will improve the efficiency of the organization & also make the working atmosphere healthy in any type of organization, whether it is private, government, small organization, big organization or household. Even a common man must know the basics of material management so that he can get the best of the available resources and make it a habit to adopt the principles of material management in all our daily activities


Storage of Materials in Industries

When materials are improperly stored, their value and utility may reduce. Some materials may damage and others cannot be used at all due to improper storage. In order to learn how to avoid material defects and spoilage due to improper storage, let us revisit the materials listed in Unit 1 and state how each of the materials could be stored. When storing materials, where must the materials be stored? What must be avoided to ensure the safety of the materials? What precautions must be taken and why? What is meant be shelf life of materials? What is meant by pot life? What is the difference between shelf life and pot life? Why should industries and users take note of shelf life and pot life? Who manages materials in industries? What about in a school?


Basic functions of stores

The main objective of the store is to make available or to provide necessary inputs to the production/op­erations departments at the barest minimum cost. The functions of stores can be grouped under primary functions and secondary functions. The following are the primary functions.


  1. To store and preserve materials
  2. To make available a balanced flow of raw materials, components, tools, equipment and other stores required for operation
  3. To provide maintenance materials, spare parts and general stores as required
  4. To receive and issue materials after physical inspection and proper identifi­cation
  5. To ensure safety and security of materials
  6. To arrange for collection, acceptance of scrap and other discarded materials for disposal


Some secondary functions of stores are as follows

  1. Serves as the collection, inspection and acceptance point
  2. Stores accounting.
  3. Stock control
  4. Feedback information to materials control section
  5. Help in standardisation and variety reduction


The following service information are obtained from stores

  1. Demand for materials and parts giving specification, quantities and deliveries required
  2. Notification when stocks are running low
  3. Details of deliveries rejected on inspection
  4. Certification of invoices for quantity and quality
  5. Particulars of anticipated changes in consumption
  6. Procurement information of items urgently required in case of breakdowns
  7. Listing of obsolete, surplus and scrap materials for disposal



Duties and responsibilities of materials managers

  1. Plan and oversee material movement through production cycle.
  2. Identify material requirements from production and engineering cycles.
  3. Handle material movement with purchasing, production and engineering.
  4. Manage policies, procedures and material control systems.
  5. Assess and plan purchasing materials requirements.
  6. Develop material requirements plans on automated computer system.
  7. Set up and manage production control system.
  8. Offer technical expertise to cross functional project teams.
  9. Develop department budget.
  10. Develop and review personnel to meet functional objectives.
  11. Create purchase orders, solicit proposal bids and review goods requisitions.
  12. Analyze price proposals and financial reports to identify reasonable prices.
  13. Negotiate and administer supplier contracts.
  14. Generate purchasing recommendation reports and actions.
  15. Support buyer to negotiations with suppliers on lead time, cost, delivery and quality.


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