Mba 2nd Sem Mlm Notes (Materials Management)
Materials
Management
INTRODUCTION
Putting in the simplest terms materials management is about moving the materials within an organization. What do “materials” mean? Materials can basically be defined as those objects or things that are to be moved in order to produce goods. Material is one of the 5M’s that a manager has at his command, the other being Men, Machine, Methods and Money. Materials could be in the form of raw materials, paperwork, messages or information etc. So materials can be both tangible and intangible. You see the newspaper boy delivering the newspaper to your doorstep everyday or the milkman delivering the milk packets to you. These are tangible materials. There is also some material moved when you watch a movie on your television or when you receive a phone call. These are the intangible materials that are moved. So materials management is an important function of every business. The better is the materials management in a company the better is the health of that company.
MATERIALS MANAGEMENT AND ITS FUNCTIONS
Materials can be put in three categories. First category is purchased materials like the raw materials, components, spare parts and items that are used and do not appear in the end product. The second category is of in-process materials or the materials in the semi-finished stages and lastly the finished goods that are ready for customers. One has to manage these materials. The aim of this management is to obtain the materials at the minimum possible price while maintaining quality also and to maintain the inventories in such a way that minimum cost is incurred while maintaining adequate materials for the production process.
Let us see what materials management actually means. It is defined as a function that integrates purchasing, storage, inventory control, materials handling and standardization etc in an organization to achieve its objective of reducing the costs. Every organization wishes to maximize its profit by maximizing its
Management
INTRODUCTION
Putting in the simplest terms materials management is about moving the materials within an organization. What do “materials” mean? Materials can basically be defined as those objects or things that are to be moved in order to produce goods. Material is one of the 5M’s that a manager has at his command, the other being Men, Machine, Methods and Money. Materials could be in the form of raw materials, paperwork, messages or information etc. So materials can be both tangible and intangible. You see the newspaper boy delivering the newspaper to your doorstep everyday or the milkman delivering the milk packets to you. These are tangible materials. There is also some material moved when you watch a movie on your television or when you receive a phone call. These are the intangible materials that are moved. So materials management is an important function of every business. The better is the materials management in a company the better is the health of that company.
MATERIALS MANAGEMENT AND ITS FUNCTIONS
Materials can be put in three categories. First category is purchased materials like the raw materials, components, spare parts and items that are used and do not appear in the end product. The second category is of in-process materials or the materials in the semi-finished stages and lastly the finished goods that are ready for customers. One has to manage these materials. The aim of this management is to obtain the materials at the minimum possible price while maintaining quality also and to maintain the inventories in such a way that minimum cost is incurred while maintaining adequate materials for the production process.
Let us see what materials management actually means. It is defined as a function that integrates purchasing, storage, inventory control, materials handling and standardization etc in an organization to achieve its objective of reducing the costs. Every organization wishes to maximize its profit by maximizing its