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Material Management

In: Business and Management

Submitted By sschari
Words 3992
Pages 16
MATERIALS MANAGEMENT

Importance of materials management :-

1. Materials input is very important as excess material as inventory causes costs to the company and shortage of material results into stoppage of conversion process and subsequently shortage of finished goods leading to customer dissatisfaction
2. Out of 5Ms, that are inputs to a conversion process, material is substantial in terms of its contribution to product cost, and current assets.
3. 51.1% of product cost is on account of materials. Hence the largest contributor to product cost. This marks out materials function as the largest potential avenue for productivity improvement.
4. Materials account for 70% to 80% of working capital. Effective and efficient management of materials can reduce substantial burden on the finances of company.

5. Accounts payable are mostly to materials suppliers. Hence the importance in management of finance of the company.

6. Quality of the Input and product quality: When the companies become leaner and leaner, it is crucial that inputs should remain in the plant only as long as the Through Put Time demands, and the output product should be Right First Time. The quality of inputs plays a vital role in this situation.
7. Management of materials is crucial in a Just In Time company. Production process needs very strong materials management support to gear up to face challenges of current market
8. Materials management provides information about availability of new products and services in the market which leads to cost efficient changes in the process

Types of materials :-

refer to types of inventory.

Functions of Materials Management :-

[What is a function? Every person , organization or a distinct part of an organization has to perform a set of tasks in order to deliver customer expectations…...

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