Create an account to start this course today. Specifically, materials management is the capability firms use to plan total material requirements. Advanced planning and scheduling (APS) software offers as an extension of the materials management process. The objectives of materials management as we discussed above, aim at giving integrated view of the management of materials, a very important item in the total mix of resources. In many organizations, the materials management and supply chain management can be very complex. The material management must have in its view that efficiency in handling material; and connected functions are ensured. 2. The need for materials management was first felt in manufacturing undertakings. The following functions are assigned for material management: Production manager prepares schedules of production to be carried in future. Content Guidelines 2. first two years of college and save thousands off your degree. 3. In this lesson, we learn about materials management and how it is used in planning and movement of materials. Materials management is defined as “the function responsible for the coordination 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”.From the definition, it is clear that the scope of materials management is vast. Topics: Content Filtrations 6. So, the objectives of materials management ate, in a nut-shall, to eliminate wastage and secure economy in all the functions that come within the purview of materials management. Materials Management is a very important function for the efficient production plan in an organization. The transporting of materials from suppliers is an important function of materials management. Materials management is a very common term used in manufacturing. And now even non-trading organizations like hospitals, universities etc. The relationship is represented below: ROI = Profit/ Sales × Sales/Fixed Assets + Current Assets. For the car manufacturing company, this would include the process of sourcing and identifying suppliers of spare parts. It is, therefore, necessary to hold inventories of various kinds to act as a buffer between supply and demand for the efficient operation of the system. In the day-to-day business operation, materials management looks after improved communication, co-ordination and control of the integrated material activities. Material management covers all aspects of material costs, supply and utilization. Every organization uses a number of materials. The supply chain process includes the steps an organization takes to source and identify suppliers. Before publishing your articles on this site, please read the following pages: 1. All rights reserved. Log in or sign up to add this lesson to a Custom Course. The cost of materials has to be brought down to the minimum as it constitutes over 65 percent of total production cost. So, the objectives of materials management ate, in a nut-shall, to eliminate wastage and secure economy in all the functions that come within the purview of materials management. This logistics department ensures that the launch materials are procured for production and then transfers the responsibility to the plant materials management. The functional areas involved in material management usually include purchasing, production control, shipping, receiving and stores. Create your account. However, holistically, the main objectives of materials management for any given organization is to: Having looked at the main objectives of materials management, it is important to also look at the supply chain process. The materials management approach to supply management has also been accepted widely throughout American business.