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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)

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