1.
Material management
⚫Costof materials in thedifferent industries may range
from 50 to 85% of productioncost.
⚫Planning and controlling the flowof materials

2.
Definition
It is concerned with planning, organizing and
controlling the flow of materials from their initial
purchase through internal operations to the
service point throughdistribution.
OR
Material management is a scientific technique,
concerned with Planning, Organizing &Control of
flow of materials, from their initial purchase to
destination.

3.
AIM OF MATERIAL MANAGEMENT
Toget
1. The Rightquality
2. Rightquantityof supplies
3. At the Right time
4. At the Right place
5. Forthe Rightcost

4.
OBJECTIVES OF MATERIAL MANAGEMENT
1. To minimize material cost.
2. To maintain desired qualityof material at minimum
cost.
3. Toreduce investments tied in the industry.
4. Topurchase, receive, transportand store material
efficiently.
5. Totrace new sourcesof supply & todevelopcordial
relationwith them.

5.
Four basic needs of Material
management
1. Tohaveadequate materialson hand when
needed
2. Topay the lowestpossibleprices, consistentwith
quality and value requirement for purchases
materials
3. To minimize the inventory investment
4. Tooperateefficiently

6.
Classes of Materials
1. Raw Materials: The raw materials are the unprocessed
material which are used for converting into finished
products.
e.g. iron ore, cotton jute, sugar cane, artificial fibers,
chemicals etc.

7.
Classes of Materials
2. Purchased Parts: The purchased parts are used
in the assembling the product.
e.g. nuts & bolts, screws, gears, wheels, etc.

8.
Classes of Materials
3. In-process Material: These are partly manufactured
products which need furtherchangeof from processing.

9.
Classes of Materials
4. Finished Goods: The product complete in all respect,
inspected and prepared forsale in the market.

10.
Classes of Materials
5. Supplies: All consumable items used in the
manufacturing operation are supplies.
e.g. oils, diesel, stationary, etc.

11.
Scope of Material Management
⚫Material Requirement Planning & Control
⚫Procurement
⚫Inventory Control
⚫Receiving & Inspection
⚫Transportation
⚫Material Handling
⚫Disposal of Materials
⚫Value Analysis

12.
Material Control
Material control is a systematic control
over the purchasing, storing and using of
materials to minimizing the possiblecost.

13.
Objectives of Material Control
1. To insureavailabilityof materials.
2. Toavoid excessive investments in materials.
3. To ensure thequalityof material.
4. To insure minimum wastage.
5. Toensure timelyaction forprocurementof
materials.
6. To maintain recordsof materials.

14.
Purchasing
Purchasing is the procuring of
materials, supplies, machines, tools and services
required forthe equipment, maintenance and
operationof a manufacturing plant.
Importance
⚫Contributes to the competitive advantage of
the firm,
⚫Significant portion of the logisticscosts

15.
Managing the Procurement
Process
1. Determine the typeof purchase
⚫ New
⚫ Straight re-buy
⚫ Modified re-buy
2. Identify the typeof purchase method
- Determine the necessary levelsof investmentsof
time & information.
- The more complex the purchase, the more time
needs to be gathered toget it right the first time.

16.
Managing the Procurement
Process
3. Perform the procurement process
Do these activities that are necessary to
effectively makea purchase and satisfy the user’s
requirements.
of the
4. Evaluate the effectiveness
procurement process
Were the user’s needs satisfied?
Was the investment necessary?