Definition-

“Management of the flow of materials into an org. To a point, where, those materials are converted into the firms end product(s).”

–Bailey and Farmer “The function responsible for the co-ordination

of planning, sourcing, purchasing, moving, storing & controlling materials in an optimum manner so as to provide a pre-determined service to the customer to a minimum cost.”

-Goplakrishnan & M. Sundaresan

The amount of money spent on materials is higher than other inputs put together.

Materials offer considerable scope for reducing costs and improving profits.

Materials ad value to the product.

Quality of the finished goods depends on the quality of the materials used to produce them.

Materials encompasses areas such as purchasing, storing, inventory control, material handling, transportation & shipping, etc.

There is procurement and preservation of scarce materials for future use.

Use of bio-degradable and less toxic materials.

Providing right materials in right quantity, at the right time, at the right price from the right source of supply.

Materials are life blood of development of humanity.

Since, there is maximum scope of cost reduction in the area of materials, doing the job of efficient and effective management of materials is seen as the key to higher productivity.

Basic question faced by any industry is to MAKE / BUY?

Estimates :•Manufacturing costs•Purchase costs•Technical skills•Availability of materials•Transportation costs, etc

e.g. : M/s Supreme co. Ltd. Makes T.V. Sets. Decision- buy parts or make parts. Difference in purchase price and manufacturing cost is the return on investment.

Facilities Procurement

Focus on facilities and equipment arrangement

e.g. : Expansion of company:Selection of siteDesign of companyHandling dealings with contractorsDealings with process engineer

Calculating quantities for scheduling

Sales forecast is studied.

Availability of labour, materials, etc is checked.

Capacity of the house is analyzed.

Storage capacity is analyzed.

Schedules keep on changing with respect to demand for end products.

Ordering of MaterialsProcedure of ordering and purchasing:Place requisitions and work orders are made.

Send enquiries for Quotations.

Negotiate and place the orders

Do the follow-up.

Get the expected material by Quality standards.

Minimum damages in packaging, storing and dispatch is seen after.

Packaging the finished goods, storing and dispatch:

This functions establishes 3 important function pertaining to the production & sales of a product.

Binning or storing.Constitutes to assets of company. Improper management = Loss

creation.

Safety Margin:Prevention is better than cure.Delays lead to shortage. Inventory provides safety margin.

Multi-purpose function.

In & out of factory movement.Reducing transportation cost.Auditing invoices ; filing claims of

refunds.

Low price

Helps in Reducing COP

High Inventory Turnover

Low cost acquisition & possession

Continuity of Supply

Consistency of Quality

Cordial supplier relation

Development of personnel

Maintenance of good records

Reciprocity Inverse relationship

Standardization and Simplification Quality, reduction in sizes and variety,

interchangeability of parts and products

Design and Development of the Product Computer Aided Manufacturing (CAM) Variety of materials

Coding and Classification of Materials Help the production and purchasing department Codes and nomenclatures

Make and Buy Decisions At Growth stage

Forecasting and Planning Market fluctuations & fluctuation in demand

Product Improvement Engineering of product Compromise between design and economic

objectives

New material & products Latest development in material &components Role of R&D dept. & product development dept

Efficient production scheduling

Inter-departmental Harmony All the department need to help material mgt dept. Provides smooth functioning of organization

Developing skills of workers in materials management Specialization by workers

At design stage to get sense of competitiveness of the product cost estimates are required.Materials,dimensions, and processes not finalized.

Once a decision is made and tools are made, it becomes expensive to make changes. Experienced materials personnel can estimate relative costs. This has to be made from sketches.

Using Standard Components Using standard components can be less costly. The

implementation can be fast.

Manufacturability of the component

It is required from the point of view of manufacture of the component. This is essential to avoid fictitious drawing, which may not be possible to make the component .

Introducing New Materials The material persons are in contact with the

outside developments and can help engineers by introducing them.

It is desirable to develop suppliers for the components. In such cases, the company may decide to buy from a certain supplier. They supplier may put up his needs into the adaptation.

Design engineers have difficulty in choosing from a number of acceptable designs and specifications. The engineer can determine which materials and processes will do the job, by the needs the data like, the relative cost and availability of material.

However in the non-manufacturing organizations it has more responsibilities. Materials are purchased, but there is no tangible finished product. Usually there is no equivalent of production control. The examples of this type of organizations are Airlines, Hospitals, etc.