PRODUCTION AND

OPERATIONS
MANAGEMENT

INTRODUCTION TO
MATERIALS
MANAGEMENT

Why Materials Management?

Materials is one of the five Ms of an industrial
organisation .
Materials offer considerable scope for
improving profit.
Materials form an important form of current
assets in any organisation.
Value addition is the margin between the raw
material value and finished goods value.

 Suppliers and materials management account for

more than 50 percent of total value.
Quality of the finished product depends on quality
of materials used.
Conservation of materials and their availability for
posterity is one of the planks of social
responsibility of business.
Exploring new sources of supply is a challenge for
material management executives.

Materials Management
Material management involves organising, and coordinating all management functions that are
responsible for every aspect of materials, storage,
and transformation.
Buying, storage, and movement of material are the
three basic objectives of materials management.
Optimum investment in inventory is the prime
objective of materials management.

 Development of personnel is very important for

long-term growth of a firm.
Engineering groups are primarily responsible
for standards of specifications.

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Importance of Materials
Management

Lower prices for materials and equipment

Faster inventory turnover
Continuity of supply
Reduced lead time
Reduced transportation costs
Less duplication of efforts
Elimination of buck-passing
Reduced materials obsolescence
Improved supplier relationships and better records, and
information
10. Better interdepartmental cooperation

11. Personnel development

Materials Management Information

System (MMIS)
MMIS provides on-line information on stock
level, work-in- process; finished goods, and
stores and spares.

Materials Management
Organisation
Organisation for Materials Management