ASSESMENT OF MATERIAL MANAGEMENT

SYSTEM IN CASE OF DILLA POLY TECHNIC

COLLEGE

A PROJECT PROPOSAL SUBMITTED TO DILLA INFOLINK COLLEGE

DEPARTMENT OF BUSINESS MANAGEMENT IN THE PARTIAL FULFILMENT
FOR THE
REQUIREMENT BACHELOR OF ART DEGREE IN BUSINESS MANAGEMENT

GROUP MEMBERS ID

1, Markos Haile………………………. 705788

2, Habtamua Alemayehu……………….704037
3, Haymanot jego………………………703990
4, Habitamu Gedecho………………….704146
5, Girma Bekete………………………..705757

Advisor:- Addis (MBA)

May 2021
Dilla Ethiopia
 Acknowledgements

We thank the almighty God, who gave the strength, protection, continuous guidance and
direction in pursuing this program similarly our intact life. Our gratitude also goes to advisor Mr
Addis for his time and guidance to the success of his work. Finally, we would like to say a big
thank you to all who assisted in various ways directly or indirectly in this successfully
completing this project proposal.
ABSTRACT
The purpose of this study will be to assess the overall material management system of the Dilla
poly technique college. Primary data will be collect through interview and questionnaire from
the manager and selected employees of the institution. Non-probability sample technique will be
use to collect data. After the data collection it will be analyze and interpreted through table and
percentage method qualitative. Our study will be intended to overall management and
measurement of the available of computerized system of material management system and
available of sufficient storage space and to recommend the company use most effective method of
material management system those optimize service and minimize cost of operation.

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Table of Contents
ABSTRACT...................................................................................................................................................I

CHAPTERONE.............................................................................................................................................1

1.1 BACKGROUND OF THESTUDY.....................................................................................................1

1.2 BACKGROUND OF ORGANIZATION............................................................................................2

1.2.1 Dilla Poly technique institution Vision, Mission and Core values...............................................2

1.3 STATEMENTOF THE PROBLEM....................................................................................................3

1.4 OBJECTIVE OF THE STUDY...........................................................................................................4

1.4.1 GENERAL OBJECTIVE OF THE STUDY................................................................................4

1.4.2 SPECIFIC OBJECTIVE...............................................................................................................4

1.5 SIGNFICANCE OF THE STUDY......................................................................................................4

1.6 PROJECT METODOLOGY AND DESIGN......................................................................................5

1.6.1 PROJECT DESIGN......................................................................................................................5

1.6.2 SOURCE AND TYPE OF DATA................................................................................................5

1.6.2.1 Primary data...............................................................................................................................5

1.6.2.2 Secondary data...........................................................................................................................6

1.6.3 POPULATION AND SAMPLESIZE...........................................................................................6

1.6.4 PROJECT APPROACH...............................................................................................................6

1.6.5 DATA COLLECTION.................................................................................................................6

1.6.6 DATA ANALYSIS.......................................................................................................................6

1.7 SCOPE OF THE PROJECT................................................................................................................6

1.8 PROJECT SKELETON.......................................................................................................................7

CHAPTER TWO...........................................................................................................................................8

2.1 Definition of materials management....................................................................................................8

2.2 Classification of materials..................................................................................................................10

2.3 Importance of material management.................................................................................................11

2.4 Techniques for material management................................................................................................14

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 2.5 Process of material management.......................................................................................................15

2.6 Key functional area of materials management...................................................................................18

2.7 Benefits of material management on organization attains profitability.............................................19

2.8The costs associated with material management................................................................................20

2.9 Cause of material management failure..............................................................................................21

2.10 How materials management affect competitiveness........................................................................22

2.11 Material management practice respects to the selected sector.........................................................22

Chapter three................................................................................................................................................23

3.1 Action plan.........................................................................................................................................23

3.2 Budget plan........................................................................................................................................24

REFRRENCES............................................................................................................................................25

III
CHAPTERONE
INTRODUCTION

1.1BACKGROUNDOFTHESTUDY
Materialmanagementconcernedwiththemanagementofdifferentmaterialitemforthesmoothoperatio
nalactivityoftheorganization.Goodmanagerialmanagementisessentialtothesuccessfuloperationofm
ostorganizationitfocusedaboutthesizeandplacementofthestockedgoodandrequiredatdifferentlocati
onwithinfacilityorwithinmultiplelocationofeverythingsfromaccuraterecordkeepingshoppingandre
ceivingofproductandproperlymaintainedcankeepacompanysupplychainsmoothing
andefficiently.Howevertherearecommonmaterialmanagementproblemthatcanoccurwiththecompa
nyprofitandcostumer.(Donnalddobler6thedition)

Theycancostmoremoney.Mostoftheproclaimingareusuallyduetopoormaterialsprocessandoutdatas
ystemproblemwithmaterialmanagementareunqualifiedemployeesinchangesofmaterialexcessivem
aterialinstockandunabletomovequicklyenough.Termsinstockget
placednotkeepingupwiththereservepriceofthematerialstheneedofmaterialmanagementistomaintain
reservestockthatwillensuremanufacturingaccordingtoaproductionplanbasedon
sourcerequirementandthelowestpossibleunitcost.Ifthereistheineffectivematerialmanagementsyste
mcanleadtheorganizationtoincurcostduetothefactorslikelackofupdatetransportationandlackof
integrationwithout therunittocompetematerial typeof
industryorganizationshouldadopteesoftheactivityandtechniquesspeciallytechniquesbringcontinuo
usnon-stopchangeinthisworld.

Oneeveryknownauthorsandmanagementsaidtheonlyconsandthinginthisorldchangingthisindelicate
thatandorganizationshouldmakeflexibletheirsystemofoperationamongsystemoforganization.
(DobblerW.1996).

Materialmanagementsystemisoneandthemostimportantforeffectivereplenishmentofgoodleadtimea
ndassetmanagement.Futurematerialforecastingof spaceformaterialbybalancing the
requirementcompanywilldiscoveroptimalmateriallevels.

1
Materialmanagementisakeybusinessfunctionthatisresponsibleforthecoordinationofplanning,sourci
ng,purchasing,moving,storing, andcontrollingmaterialsinanoptimummanner,soas toprovidepre-
determinedservicetothecostumerataminimumcost.

Materialmanagementprovidesanintegratedsystemapproachtothecoordinationofthematerialactivitie
sandthecontroloftotalmaterialcosts.

1.2BACKGROUNDOFORGANIZATION
ThereformedTVET-systemisanoutcome-
basedsystem.Itutilizestheneedsofthelabormarketandoccupationalrequirementsfromtheworldatwor
kasthebenchmarkandstandardforTVETdelivery.Therequirementsfromtheworldofworkareanalyze
danddocumented-takingintoaccountinteractionalbenchmarkingasoccupationalstandards(OS)

In the reformedTVET-
System,curriculaandcurriculumdevelopmentplayanimportantrolewithregardtoqualitydrivenTVET
-
Delivery.Curriculahelptofacilitatethelearningprocessionaway,thattraineesacquirethesetofoccupati
onalcompetences(skills,knowledgeandattitude)requiredattheworkingplaceanddefinedintheoccupa
tionalstandards(OS).

DillapolytechniqueinstitutionpreviouslyknownasDillatechnicalinstitutionislocatedinthecentreofto
wnofthewaytotheDillaUniversity.TheDillatechnicalinstitutionrunscoursesinindustrialtechnologye
lectricalengineeringelectronicsautomechanics,buildingconstruction,businessandICTandoffersthen
ewEthiopianoccupationalstandardinnewbuildingconstructionandmetalmanufacturing.

Dillapolytechniquecollage(institution)foundedin1998,Dillapolytechniqueinstitutionisanon-
profitpublishingeducationinstitutionlocatedintheurbansettingoflargetownofDilla(populationrange
of150,000-229,999inhabitants)SNNPR.

Dillapolytechniquecollegeisoneoftheveryimportantosupportivetechnicalandeducationalcollagesw
ithfoundinSNNPRanditisfoundingedeozonedillatown. Itisfor60kmfromAddis Ababa and 90 km
form regional city,hawassa.

1.2.1 DillaPolytechniqueinstitutionVision,MissionandCorevalues
Vision
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TheDillainstitutionrunscoursesinindustrialtechnologyelectricalengineeringelectronicsautomechan
ics,buildingconstruction,businessandICTandoffersthenewEthiopianoccupationalstandard
innewbuildingconstructionandmetalmanufacturinginAfricaby2025.

Mission

Tosupportthesocio-
economicdevelopmentofthenationbyproducinginternationallycompetentgraduatesinmetalmanufac
turingandtechnologyconductingresultorientedresearch,promotingtechnologytransfer,andprovidin
gcommunityservices.

Corevalues:

 Originalityandinnovativeness
 Standardinnew building constructionandmetalmanufacturing
 Transparencyandaccountability
 Senseofbelongingness,ownershipandcommitment
 Diversity, mutual respectandtolerance
 Academicfreedomandinstitutionalautonomy
 Professionalethicsandresponsiveness
 Good governance anddemocratization
 Honestyandintegrity

1.3STATEMENTOF THE PROBLEM

Material management system is the act of managing and checking of all items or that
organization has in the stock it also important for preventing different things like lack of flexible
configuration. Lack of transaction, update purchase of unnecessary material and lack of
integration with other units.Sulvan (2001)

Material management system is important to bring efficiency within the company. Material
management system refers a process of keeping a truck of object or materials. Material object
could be include any kind of physical asset and capital equipment. Unless this material object
keep in a suitable way the activity of institution should assist the material management system

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 through computer any type of activity the computer bring effectiveness for an entire
organization. So, Dilla poly technique collage is one of institution that should assist avoid such
problem in the type of handled material.

The projectors will also forwards some suggestion for improvement of institution on the basis of
the study and also the reason for this conducted to evaluate and decide best way for the following
problems.

To evaluate type of material management system is used in Dilla poly technique collage.

To describe modern material management system for dilla poly technique collage.

To describe best way for performing material management activity for the collage.

To improve material management function in the institution.

1.4 OBJECTIVE OF THE STUDY

1.4.1 GENERAL OBJECTIVE OF THE STUDY

The general objective of the study will be to assess the material management system in case of
Dilla poly technique collage

1.4.2 SPECIFIC OBJECTIVE

The specific objective of the study will be

 To identify material management system in the case of Dilla poly technique collage.
 To describe the utilization of modern material management system
 To recommended efficient material management system.

1.5 SIGNFICANCE OF THE STUDY

Thefindingwhattheprojectorswillinvestigatemulti-purposefordifferentconcernedbodies.

For the principal project participant:

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Thefindingwillgiveprimaryresponsefortheresearchers’questions.Italsowillusedasstartingpointfort
heprimaryresearcherasstartingpointfor more investigation in the problem.
Standingonthefinding,the participants
oftheprojectrelatethetheoriesregardingtheproblemwiththerealworldpractice

For the coming researcher:itwillbeserveasinitialpointor entering

doorforthecomingresearchertoinvestigatedepthin regard
theproblem.Itwillindicatestheconcurrentgapfortheresearcherthatneedstoberesearchedbythetime.th
isstudywillbetoprovideclearinformationfothereaderaboutthewaysof
undertakenmaterialmanagementsystem.

It will serve as information medium to reactive measures by prospective researchers

For organization: thefindingwillserveas

indicatorofthegapinmaterialmanagementsystem.Itwillprovideimportanceofeffectivematerialmana
gementsystemto another operationalactivityoftheinstitution.

Theorganizationwillabletoidentifytheyaretheyshouldworkonmaterialmanagementsystem.

It will give the organization guideline on effective use of planning, organizing, controlling and
coordinating concept of material management in order to avoid waste.

1.6 PROJECT METODOLOGY AND DESIGN

1.6.1 PROJECT DESIGN

The project will be descriptive type of project design because of the study will be describe the
material management system of Dilla poly technique collage. In descriptive studies, the
researcher must be able to define clearly, what he wants to measure and must find adequate
methods for measuring it along with a clear cut definition of ‘population’ he wants to study.
Since the aim is to obtain complete and accurate information in the said studies, the procedure to
be used must be carefully planned (Kothari: C,R. 2004 pp39).

1.6.2 SOURCE AND TYPE OF DATA

The project will be use both primary and secondary type of data.

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1.6.2.1 Primary data
It will be collect from the official or employees of Dilla poly technique collage through interview
and questionnaires.

1.6.2.2Secondary data
Itwill be collect from secondary source like documented data, journal records and already
documented materials.

1.6.3POPULATION AND SAMPLESIZE

The projectors will be use non-probability sampling technique as the major sampling method.
There are many type of non-probability sampling technique from those the projectors will be use
convenience sampling technique. A convenience sample is a non-probability sample in which
the researcher uses the subjects that are nearest and available to participate in the project study.

1.6.4 PROJECT APPROACH

The project will be conduct using qualitative approach. Qualitative data tends to be open-ended
without predetermined responses. Qualitative approach involves collecting and analyzing non-
numerical data to understanding concepts, opinions, and experiences.

1.6.5DATA COLLECTION
The study will be use primary and secondary data. Primary data will collect through
questionnaires will be distributed by the projector. The questionnaires will consist of both open
ended and close ended questions. The open ended questions will meant to avoid limit the
respondents in answering the questions.A liker scale will be use for close ended question. The
questionnaires will made up of material management system of Dilla poly technique collage.
Secondary data on the subject area will be collect through reports and organizational publication
on material management system.

1.6.6DATA ANALYSIS
The data analysis will be descriptive analysis method. The data will be collected via
questionnaires are analyzing with descriptive analyze method using frequency, percentage and
tabular.

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The project will be applying interpretation of qualitative data to bring a reasonable out come on
the subject matter.

1.7 SCOPE OF THE PROJECT

Geographically this project will be delimitated on Dilla poly technique collage at dilla town.

Theoretically the project will be delimitated on material management system of Dilla poly
technique.

1.8 PROJECT SKELETON

The project will be structed as follows

Chapter one will be contains main introduction and methodology.

Chapter two will be contains literature review or detail definition about material management.

Chapter threewill be contains data presentation and discussion.

Chapter four will be contains SWOT analysis

Chapter five will be contains conclusion and recommendation.

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CHAPTER TWO
LITERATUREAND RELATED REVIEW

2.1 Definition of materials management

Materials Management is coordinating function responsible for planning and controlling
materials flow. It has the objective of maximizing the use of company’s material resources and
providing the required level of clients’ service (Harris & MacAfee, 1995).

Materials management became a vital function of management and the department of materials
management was started at the time of World War I in the United States of America. The
advancement of principles of scientific management in the 20th century by F.W. Taylor
decreased the cost of production and proper utilization of materials was enhanced. Charles
baggage was known as “materials man” because of his book on an economy of manufacturing
and machinery which explains about the functions of purchasing. Between the years 1970 and
1999 materials management enhanced a lot.

Material management is directly associated with the operational efficiency of an organization. A

good material management system ensures the availability right materials in the production
process with minimum wastage so as to cut losses.

Materials management is the branch of logistics that deals with tangible components of a supply
chain. It covers the acquisition of spare parts and replacements, quality control of purchasing and
ordering such parts, and the standards involved in ordering, shipping, and warehousing the said
parts. The physical arrangement of materials/spare parts is called materials
management.Planning and control of the functions supporting the complete cycle (flow) of
materials, and the associated flow of information is called materials management. Materials

8
management is concerned with the control of materials in such a manner which ensures
maximum return on working capital. Materials management is concerned with the location and
purchase of materials needed, their storage and movement. It also arranges to keep an account of
them. It is also responsible for planning their movement through manufacturing processes, store
rooms and distribution channels.Materials management provides an integrated systems approach
to the coordination of the materials activities and the control of total material costs. The materials
management function ranges from receiving the material requisitions from user department to
placement of purchase orders and then, on the other hand, receiving the materials from vendors
and making it available to the users departments.

Material management refers to the flow of materials from the environment to the organization
and within the organization until it is ready to be dispatched back to the environment. It is
concerned with what types of materials to get, how much to get, when and where to get, at what
price etc. materials management, therefore, is a process of planning, organizing, directing and
controlling the flow of materials including the acquisition and utilization of materials in a
organization.

Materials management involves the task of coordination of the performance of the various
materials function, the provision of communication networks, moving, storing and controlling
materials in optimum manner so as to provide quality service at a minimum cost. (Abuja,(1992)
material management page6, According to (Nair,(1990) material management page3, materials
management is the integrated functioning of purchasing and allied activities to achieve the
maximum co-ordination and optimum expenditure in the area.

Although materials management organization can vary between firms, it can include a number of
separated groups, such as material planning and control, material and purchasing research,
receiving stores, scrap and surplus disposal. The main object of materials management are to
solve material problems from a total company viewpoint (optimize) the coordinating
performance of the various material functions, providing a communication network, and
controlling material flows.

More specifically it is possible to say that the main objective of materials management is cost
reduction and efficient handling of materials at all stage and in all section and in all the under

9
taking. The rational of materials management is the integration of related material function to
provide cost effective delivery of materials and services to the organization. (Leenders, (2002)
material management page6,

Material management is an approach for planning, organizing, andcontrolling all those activities
principally concerned with the flow of materials into an organization. The scope of materials
management varies greatly from company to company and may include material planning and
control, production planning, Purchasing,inventory control, in-plant materials movement, and
waste management.

Materials management is a broad concept that includes functions like materials planning,
purchasing, receiving store keeping, inventory control, material handling disposal of scrap and
surplus and transportation. (Leenders,(2002) material management page 7,

2.2 Classification of materials

There are multi-facility problem for construction material management but by a realistic analysis
this work out. Handling material, optimizing location of haul roads and crane location problem
are some sort of this kind of problems. To properly supply the materials we should have a good
understanding of different type of materials. Thiswill help us to order the materials according to
their sizes, time of the usage on site and other factors.

1 Ordering system

What materials, quantity, volume and location or distance to the site are the main issues in terms
of ordering and this information will be clarified from contract documents such as the contract
bill of quantities. Classification materials into an ordering system are very important.
Classification can be in terms of size and essential rate to the construction programmed and
quality control into four orderingsystems (Hiraki et al., 1994).

Synchronized system

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During Material synchronization, a tolerance percentage of the original demand or supply
quantity of the size that is specified in the Percentage field is used. QuantityDuring Material
synchronization, a tolerance quantity of the size that is specified in the Quantity field is used.

Prescheduled ordering system

Ordering systems are the "mechanical" part of inventory management. They're the programs that
take our forecasts, actual orders, safety stock, and, and order quantities, and turn them into
purchase orders or production orders.
Periodic ordering system

It is an inventory control method where orders are periodically placed, but the order quantity is
different every time, and is also called periodic ordering system.

Non-periodic ordering system

large components such as air conditioning system, steel work, called synchronized system. The
next step, big volume material such as panels and door called prescheduled ordering system;
these are not as big as the synchronized system. Such materials like cement, gravel, called
periodic ordering system which is required at various stage of project. And at least the materials
which are obtained at the circumstance of the project and those are small volume and large
quantity such as bolts, nails are called non-periodic ordering system.

2.Site arrangements

Material flow on site is the process of moving materials from the site entrance through a set of
function areas to the final installation areas. This can be through a model such as Tommelien
(199) has suggested which in these model six types of function areaare recognized: Site
entrances, lay down areas, staging areas, assembly areas, installation areas, and wastes areas. Lay
down area is for the long term use for main material to their own lay down area for example steel
or large panel formwork. For the frequency use of material if they are small volumes it should be
shared with the same area. For short term temporary storage ‘’ storage area’’ is suitable.
‘’assembly areas’’ is the working area needed when materials are being placed when they finally
remain and ‘’wastes area’’ are also needed for the waste material. ‘’Site entrances’’ which
should be connected to the outside road system.Also ‘’non functional area’’ such as site offices
11
or tools storage and worker changing rooms; and finally ‘’Unused area’’ which may be used for
further work. Staging areaInstallationareaWasteImportance of Material Management:

2.3 Importance of material management

Material management is directly associated with the operational efficiency of an organization. A
good material management system ensures the availability right materials in the production
process with minimum wastage so as to cut losses. Here are the few ways which show the
importance of material management and how it influences your project performance: –is widely
recognized as a primary criterion for performance

Time

Time measurement. Poor material management can have a negative effect on project time, like
the insufficient stock of materials, lead to idling time as workers try not to exhaust the stockpile
or it is worsened by the work stoppage. Due to this shortage, materials need to be reordered and
causes longer idling time. Consequently, the work progress will be delayed. Therefore, the
availability of sufficient quantity of materials affects the projects time.

A proper material management system ensures that there is enough buffer stock so as to prevent
any stoppage in production.

Cost

Cost is one of the major consideration in the entire cycle of projects. Effective material
management is able to reduce the overall cost of material. For example, in the purchasing
process, discounts and bulk order may be economical as it reduced the transportation and
ordering cost, thus, by minimizing the procurement cost of materials, the higher chances for
reducing the overall project cost and concurrently increasing company profit.

However, the reasonable time needs to be considered so that the materials are not ordered too
early or it may affect the company capital, interest charges, and storage charges. Wrong
calculations can lead to over or under stocking which will be bad for the industry. A proper MM
system helps in determining the number of materials to be ordered to reduce cost without any
obstructions in production

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Quality

The term quality has sometimes become a problem as it is asubjective matter and understood
differently by different peopleand organizations. Therefore, it is important to be able to identify
client’s requirements and specify clearly in the contract document.

Availability of resources such as materials and equipment as planned during project duration is
one of the factors contributing to quality performance. The available equipment also needs to be
in good condition and in sufficient quantity. Without the proper and sufficient equipment, quality
of the project can be jeopardized. Similarly, the materials itself also needs to be inappropriate
quality according to the specification. In sum, the available resources must be in accordance with
the specification, sufficient quantity and functional. The material management system can be
used to ensure all this hence getting a satisfactory quality in production.

Productivity

The productivity is measured in terms of unit completely accomplished during given period and
the related costs in terms of man-hours or money. After analysis in different industries, a
research organization reported that the lack of materials is a primary factor that had a moderate
to strong effect on productivity. More importantly, it has been accumulated that disruptions
inmaterialmanagement resulted in a loss of labor productivity as well. Material storage also had a
significant impact on labor productivity. For example, inappropriate storage location increases
unproductive inputs. This occurs as the workers need longer time and effort to retrieve materials.
Due to this, wasting of workers’ energy occurs and they may end up physically fatigued.

With appropriate site storage, workers energy can be productively used to perform the task in
progress. This situation is also similar to the efficient site layout for material movement.
Efficient movement of materials increases productivity whilst reduces material travel time.
Besides, the availability of material and equipment motivates workers to improve work
productivity.

Waste

Waste refers to any material that needs to be moved out from the site due to damage, non-use or
cannot be used due to non-compliance with specification and surplus or debris by-product of the
13
production process. In simple words, waste is a product or material that is unwanted and required
to transported out. Inappropriate material storage contributes to waste generation.

Strategies for waste minimization are the stock control for minimization of over or duplicate
ordering, good practices of material handling, systematic inventory process and proper material
storage. Hence, the efficient material management practice throughout entire process will
minimize the waste generation. Material management ensures effective utilization of materials in
order to minimize any kind of material wastage at the time of movement or storage of
materials.It reduces any chance of late delivery.It controls the indirect material cost. A lack of
controlling the materials cost can increase the entire production’s cost.

Material management helps in avoiding the loss incurred by direct labor.With the help of
materials management, the investment in materials is kept under control. Neither there is under
stocking of materials, nor there is overstocking.Modern Techniques for Materials Management.

Another importance of material management in organizations as follows;

1. Better coordination of the people and activities dealing with materials.

2. Elimination of bulk-purchasing.
3. Low price of material and equipment.
4. It hastens inventory turnover.

5. Better communication and cooperation between the various departments.

6. It reduces duplication of efforts and also facilitates the introduction of computerbased

operations.
7. It increases the morale of staff.
8. It reduces material obsolescence.
9. It facilitates better records and information.

10. It improves control of quality and improves profitability level.

2.4Techniques for material management

Planning is an essential part of management processes. In this modern era, excess or inadequate
planning for materials management can cause a threat to the organization. Thus, there is a need

14
to introduce certain techniques and methodologies to manage materials. In general, two modern
techniques for materials management are prevalent in every kind of business.

MRP (Material Requirement Planning)

In an organization, proper resource planning is pivotal to ensure proper manufacturing processes

and operations. Without such planning, the organizations are liable to face various challenges
related to managing different supply chain areas such as production, output, etc. In such
situations, Material Resource Planning (MRP) comes as handy.

MRP refers to a planning technique that involves inventory planning and control, project
planning and scheduling. It allows managers to estimate the quantity of raw materials needed for
production and to schedule delivery. It makes it easy for the managers to manage, organize and
assemble the materials.

ERP (Enterprise Resource Planning)

ERP is a modified version of MRP, while MRP was only confined to material planning ERP
includes the planning of all enterprise-related activities. It refers to business software required to
efficiently manage the resources within an organization. It provides the materials manager with
some effective and necessary tools that help in the management of materials or other production
resources. It has a centralized database that simplifies workflows and reduces labor. ERP was
introduced after MRP when the organizations realized that it’s necessary to manage their office
operations too.

These were modern techniques for material management. Clearly, the task of a material manager
isn’t simple and requires immense knowledge and skills to handle the organization’s internal
affair

2.5 Process of material management

Planning:

Material management first step is planning in that case to measuring, ordering and scheduling,
material planning is most important process to increase the productivity, profit and assisting the
15
time to complete the construction project. In that construction the material process
notimplemented the total project will bedamaged and the project will not complete with in the
time. If maintain the proper planning in material to decrease the total project cost and thematerial
waste also decreases

Purchasing:

Purchasing of material is involved in maintaining control over the ordering, in every construction
project purchasing and receiving functions areimportant, purchasing department is one of
mainresponsible part to ordering the best quality and right price at right time, in construction
project purchasing department is procedure applies to purchase of all material related
toconstruction, services, supplies, tools, equipment and equipment rental for all
development.Construction purchasing procedure activesare mainly

1) Purchasing over review

Procurement is a term describing the purchasing process for goods and services. In building
construction, material procurement is the process by which the materials required to construct a
building are selected, ordered, invoiced, paid for and delivered to the site.
2) Requisition for material order

The procurement system starts with a requisition order and moves through the purchasing
department to become a purchase order. In this process, a department (or individual) submits a
purchase requisition form (also called a requisition order form or purchase request form). These
internal documents are put through a purchasing system and approval process for validation
purposes before they generate a purchase order.

3) Order placement

The legal order is placed with the supplier on a form known as a purchase order. Most companies
insist that, every purchase be placed in this manner. When an order is placed by telephone or
telegraph, it is practice to confirm the order by sending the supplier a regular purchase order.
4) Record keeping and matching

16
You need good records to monitor the progress of your business. Records can show whether your
business is improving, which items are selling, or what changes you need to make. Good records
can increase the likelihood of business success.
5) Order and arrivals

This process allows a company that orders material for their customers, and then delivers the
material to a specific destination where the driver who sends the material signs the delivery
order.
6) Purchase order follows up

A purchase order is a commercial document and first official offer issued by a buyer to a seller
indicating types, quantities, and agreed prices for products or services. It is used to control the
purchasing of products and services from external suppliers.
7) Material transfers

A form that records the transfer of material from one accounting code to another. A prime
document, it will contain a description of the material, commodity code, job number or
accounting code to be credited, job number or accounting code to be debited, and the value of
material transferred.

8) Sundry purchases

including many things of different kinds : miscellaneous, various sundry items/articles The
interior was padded and crammed with little pockets and nets for hatboxes and sundry
possessions.

In accounting and bookkeeping, sundry expenses are expenses that are small in amount and rare
in occurrence. For these rare and insignificant expenses, a company might use a general ledger
account entitled Sundry Expenses for these items.

Handling:

Handling of materials means to maintains the perfect order to supply the materials for their
movement and location, in material handling to give the rating to materials based on quality and

17
it should be consider when designing a material handling system, to supply the effective
operation of manpower, increase the output and advance to thesystem for more flexible.

Stock and waste control

Stock control means to maintain proper technique to be cover and supply of all materials when
they are required, it include the raw materials, processed materials, arrange all works, to
maintained the materials and spares. It’s important part in materials management to supplies the
materials at required time to time, at the time of constriction site work the waste can produced to
maintain proper planning to the materials to control the materials waste and it help to increases
of profits of the companies.

2.6 Keyfunctionalareaofmaterialsmanagement
Thefunctionalareasinvolvedinmaterialmanagement usually
includepurchasing,productioncontrol,shipping,receivingandstores.

Function of material management

Material management covers all aspects of material costs, supply and utilization. The functional
areas involved in material management usually include purchasing, production control, shipping,
receiving and stores.

The following functions are assigned for material management:

1. Production and Material Control:

Production manager prepares schedules of production to be carried in future. The requirements

of parts and materials are determined as per production schedules. Production schedules are
prepared on the basis of orders received or anticipated demand for goods. It is ensured that every
type or part of material is made available so that production is carried on smoothly.

2. Purchasing:

Purchasing department is authorized to make buying arrangements on the basis of requisitions

issued by other departments. This department keeps contracts with suppliers and collects
quotations etc. at regular intervals. The effort by this department is to purchase proper quality

18
goods at reasonable prices. Purchasing is a managerial activity that goes beyond the simple act of
buying and includes the planning and policy activities covering a wide range of related and
complementary activities.

3. Non-Production Stores:

Non-production materials like office supplies, perishable tools and maintenance, repair and
operating supplies are maintained as per the needs of the business. These stores may not be
required daily but their availability in stores is essential. The no availability of such stores may
lead to stoppage of work.

4. Transportation:

The transporting of materials from suppliers is an important function of materials management.

The traffic department is responsible for arranging transportation service. The vehicles may be
purchased for the business or these may be chartered from outside. It all depends upon the
quantity and frequency of buying materials. The purpose is to arrange cheap and quick transport
facilities for incoming materials.

5. Materials Handling:

It is concerned with the movement of materials within a manufacturing establishment and the
cost of handling materials is kept under control. It is also seen that there are no wastages or
losses of materials during their movement. Special equipment’s may be acquired for material
handling.

6. Receiving:

The receiving department is responsible for the unloading of materials, counting the units,
determining their quality and sending them to stores etc. The purchasing department is also
informed about the receipt of various materials.

2.7 Benefits of material management on organization attainsprofitability.

The benefits of materials management is to maximize the use of the firms' resources by ensuring
adequate supply of materials for production process and also minimizing cost of holding
excessive materials. This when achieved, leads to cost reduction and improve
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profitability.Thisobjectivewhenachieved,leadstocostreductionandimproveprofitability.MaterialM
anagementisresponsibleforpurchasingthehighestqualityequipmentandproductsatthelowestpossible
costfortheorganization.MaterialManagementisalsoresponsibleformanagingpurchasing,inventoryc
ontrolfunctions,shippingandreceiving,andalsoplanningandadministeringdepartmentbudgets

These materials management systems produce tangible benefits in the areas of improved labor
productivity, reduced bulk materials surplus, reduced materials management manpower, and
cash flow savings.

2.8The costs associated with material management

1. Purchase Costs

Nominal cost of inventoryPurchase price of the items or raw materials orThe production cost if
produced within the organization may be constant or may vary based on variations in quantity

2. Ordering costs/Set up costs

Also known as procurement cost

Costs associated with the processing and chasing of the purchase order, transportation, quality
inspection etc.

Set up cost: for production within organization

Costs to develop production schedule, resources etc.

3. Carrying Cost

Storage and maintenance etc.

4 Capital costs

Includes the costs of investments, interest on working capital, taxes on inventory paid, insurance
costs and other costs associate with legal liabilities.depends upon and varies with the decision of
the management to manage inventory in house or through outsourced vendors and third party
service providers.Storage and maintenance etc.
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5 Storage space costs

Include storage requirements for all categories of materials.

6. Service costs

Volume relatedInventory insuranceStorage & Maintenance etc.

7 Risk Costs

Vary with the nature of the businessObsolescence, Damage & Shrinkage

Related to the overall role of inventory within a logistics system.

2.9Cause of material management failure

The following are the cause of material management failure.
Cost escalation of materials
On-time delivery of materials

Procuring good quality materials and maintaining the quality till construction and maintenance
phase.

Managing the risk related to materials, cost escalation of materials, inventory related risks, etc.

Procurement problems like correct description of materials, insufficient storage area, too early
receiving of materials,etc.

Procedures and hierarchy problems and it leads to communication problem of material handling
and movement

Poorly defined roles and responsibilities

Shortage of skilled labor for handling

The usual causes of material failure are incorrect materials selection, incorrect processing,
incorrect manufacturing procedures, inadequate design or incorrect use. Fracture is the
separation of a body into two or more pieces as a result of an imposed stress.Failure causes are
defects in design, process, quality, or part application, which are the underlying cause of a failure

21
or which initiate a process which leads to failure. Where failure depends on the user of the
product or process, then human error must be considered.

Material Failure means any act or failure to act in a manner that has or may have an adverse
effect on the reputation, good will or financial condition of the organization, as well as any act or
failure to act in a manner that has or may impair the right or ability of the organization to carry
on its mission, operations, business, research, education or other affairs.

Every organization expects her employees to put in effective and efficient services.

2.10 How materials management affect competitiveness

Manager and staff in manufacturing must have good basic understanding of the factors
influencing materials flow. This will assist them in making good use of the available materials,
materials should be seen as the most important resources for any organizational production.
Without the materials, no one can do anything. Effective management of materials should be felt
as it must improve customers' satisfaction at all times. Hence, materials effectively managed will
surely lead to organizational productivity and good materials should motivate worker's effort into
production. This should be carried out alongside other motivational packages.

2.11Material management practice respects to the selected sector

The goal is to ensure that the correct quality and quantity of materials and equipment are
procured in an effective manner, obtained at a reasonable cost, and available when needed. The
implementation of a comprehensive materials management program contributes to more-
predictable project outcomes, reduced costs, improved productivity and quality, and a safer
working environment. This makes the early and comprehensive involvement of materials
management in capital projects very important. This paper describes a study in which the
purpose was to identify materials management system that reflect current and emerging practices
in Dillatvet collage. This practice should ensure that the materials supplied meet the requested
specifications at a good price and delivered on the specified dates.

22
Chapter three

3.1 Action plan

s.no Activates feb Mar app may june july aug

1 Problem identification 

2 Topic selection 

3 Literature review 

4 Proposal writing 

5 Proposal sum 

6 Proposal paper defense 

7 Data collection and defense 

8 Data analysis and interpretation 

9 First draft report writing 

23
10 Final report writing 

11 Paper presentation 

3.2 Budget plan

no Description item unit Quantity Unit cost Unit total cost

1 Secretary page 45 7 315.00

2 Papers pack 1.25 100 125.00

3 Pen Piece 5 10 50.00

4 Binding Piece 2 15 30.00

5 Transport Trip 7 40 280.00

6 Mobile card piece 5 30 150.00

Sub total 950.00

24
 Contingency 10 95.00

Grand total 1045.00

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Arnolo.T.chapman N et al(2008) introduction to material management(6thed) new jesey; prentice

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Wild.(1997). Best Material M2anagement practice;Elsevier science Itd.

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