Lecturte Logistics management - Chapter: Material management. The following will be discussed in this chapter: Definitions, aim of material management, objectives of MM, classes of materials, company objective, how materials management affects company’s profit,. | Material Management Definitions It is defined as an organizational concept, which has the authority and responsibility of all activities, concerned with the flow of materials in the organization. It is concerned with planning, organizing and controlling the flow of materials from their initial purchase through internal operations to the service point through distribution. Material management is a scientific technique, concerned with Planning, Organizing &Control of flow of materials, from their initial purchase to destination. Planning and controlling the flow of materials AIM OF MATERIAL MANAGEMENT The fundamental aims of the Materials Management function ,often called the famous 5 Rs of Materials Management, are acquisition of materials and services : 1. of the Right quality 2. in the right quantity of supplies 3. At the Right time 4. At the Right place 5. For the Right cost Objectives of MM From the management point of view , the key objectives of MM are; To buy at the lowest price , consistent with desired quality and service To maintain a high inventory turnover , by reducing excess storage , carrying costs and inventory losses occurring due to deteriorations , obsolescence and pilferage To maintain continuity of supply , preventing interruption of the flow of materials and services to users To maintain the specified material quality level and a consistency of quality which permits efficient and effective operation Classes of materials Raw materials:- These are materials that are used in the product which is in an unprocessed condition. Purchased Parts:- These are the items used in the assembly of the product. In-progress materials:- They are called ‘work in progress’ inventories. These goods require further processing. Finished materials:- These are fully manufactured goods, inspected and ready for delivery to the customers. Supplies:- These are consumable goods used in the process of manufacturing. Company Objective Income = Revenue - | Material Management Definitions It is defined as an organizational concept, which has the authority and responsibility of all activities, concerned with the flow of materials in the organization. It is concerned with planning, organizing and controlling the flow of materials from their initial purchase through internal operations to the service point through distribution. Material management is a scientific technique, concerned with Planning, Organizing &Control of flow of materials, from their initial purchase to destination. Planning and controlling the flow of materials AIM OF MATERIAL MANAGEMENT The fundamental aims of the Materials Management function ,often called the famous 5 Rs of Materials Management, are acquisition of materials and services : 1. of the Right quality 2. in the right quantity of supplies 3. At the Right time 4. At the Right place 5. For the Right cost Objectives of MM From the management point of view , the key objectives of MM are; To buy at .
