|
|
|
|
Every organization, big or small, depends on
materials and services from other
organizations to varying extents. These
materials and services are obtained through
exchange of money and the physical arrangement
of it all is called Materials Management
or even Material Management. |
| |
|
|
|
Various materials used as inputs, such as
raw materials, consumables & spares, are
required to be purchased and made available to
the shops / users as & when needed to ensure
uninterrupted production.
Therefore, efficient
management of input materials is of paramount
importance in a business organization for
maximizing materials productivity, which
ultimately adds to the profitability of the
organization. |
|
|
|
|
The main concern of any Business management is
to maximise the Return on Investment (ROI).
The relationship of various entities here can
be expressed as: |
|
|
|
|
|
Profit
Sales
ROI = ---------- X
-----------------------------------------
Sales Current
Asset + Fixed Asset
Thus ROI = profit margin + asset turnover rate
A firm's profit margin reflects management's
ability to control costs in relations to
revenue. The asset turnover rate reflects
management's ability to effectively utilize
the firm's productive assets.
Hence a firm can improve ROI in three ways :
- By
reducing cost
- By
getting more sales from available assets
or Get Currency converter
- By some
combination of the above
Thus , it is the cost control that holds
the key
|
|
In many manufacturing organisations, the cost of
materials alone happens to range from 40 % to 60
% of the total expenditure. Obviously, a better
management of material is expected to ensure
reduction in overall cost of operation and
smoothness in supply of inputs.
This requires well coordinated approach towards
various
issues involving decision making with respect to
materials. |
|
|
|
All the materials related
activities such as material
planning & indenting,
purchase systems &
procedure, variety reduction
through standardization &
rationalization, reducing
uncertainties in demand &
supply, handling &
transportation, inspection,
proper
storage & issue of materials
to the internal customers,
inventory management, vendor
management & finally disposal of
obsolete, surplus & scrap
materials etc. taken together is
termed as
“INTEGRATED MATERIALS
MANAGEMENT”
To carry out these functions
efficiently, it is essential to
have a very good supplier base,
order booking process &
inventory management system as
well as expert
|
MATERIALS
MANAGEMENT (MM)
professionals.
Materials Management is a key
business function that is responsible for
co-ordination of planning, sourcing,
purchasing, moving ,
storing and controlling materials in an
optimum manner so as to provide a pre-decided service
to the customer at a minimum cost. |
|
|
In its process of managing ,
materials management has such
sub fields as inventory
management , value analysis,
receiving, stores and management
of obsolete , slow moving and
non moving. |
Materials Management's scope is vast. Its sub
functions include Materials planning and
control, Purchasing, Stores and Inventory
Management besides others. The various
activities represent these four functions:
-
Planning and control
-
Purchasing
-
Value analysis and
-
Physical distribution
|
|
The planning and control functions are
inventory management , production
planning and scheduling.
Purchasing functions are buying,
subcontracting, value analysis and
follow ups. |
|
|
Distribution functions are receiving ,
packaging, shipping, transportation
and
storage, making it the
Integrated Materials Management.
|
|
We expect business institutes , colleges and
universities , worldwide, to make use of this
site to promote international traineeships for
the students.
|
Business collaboration proposals are welcome
on Materials Management services.
Please
contact us or go to our
Advertising page
|
"If
through any keyword search or
any reference you have stumbled upon
this professional and
exclusive site on MATERIALS
MANAGEMENT, you've landed ,rightly,
on a Unique site !!"
- Vijay Mathur,
CPM, APP,MBA,M.Sc.
|
|
|
|
|
