What is material management?
Material is one of the most essential and basic commodities required to keep running the production process of an organization. The production process comes to a halt when the material is not supplied to the production unit on time. Moreover, it is an important task to determine the right quantity required for the production process; otherwise, there will be two outcomes; first is the excess of material, and the other is the lack of material. Both scenarios are not desirable for production or material manager. Therefore, material management is considered the core of supply chain management.
In material management, the manager is required to have the capabilities for supply chain management and supply chain planning. It is the job role of a material manager or overall material management department to determine the quality and quantity of material required for the production process.
The production or manufacturing department conveys their requirements for different types of material needed for the production process to the material management department. It is the responsibility of the material manager to determine the quantity requirement of material in the organization.
The process of material management is not as simple as it seems. There are a lot of things that a manager is required to take into consideration before preparing a final order for material procurement, such as demand in the market, inventory level, etc.
In addition to this, the material management is also responsible for contacting suppliers and coordinating with them so that the right quality and quantity of material is supplied on time.
The material management is not an easy work to be performed. There are various roles that material management requires, in addition to material manager such as Material planner, inventory analyst, inventory control manager.
They coordinate to make sure that the supply of material, inventory is at optimum levels. Also, they make sure that everything goes according to plan and no deviation in plan takes place because of the poor material management.
Read this article ahead to learn about the definition of material management and the objectives of material management.
Definition of material management
Material management refers to all the activities such as planning, controlling, directing, and coordinating the materials and other commodities required for the production process.
Objectives of material management
The followings are the main objectives of material management.
1. To select the right quality of material
The selection of the right quality of the material is the responsibility of material management. The quality of the final product depends on the quality of the material used to make it. Therefore, it is crucial to make sure that the right quality material is used in the production process.
To make sure that companies ask for material samples from different suppliers before placing an order for large quantities of material and selects the supplier with the optimum quality of the material. The work is not done just here.
The quality control manager regularly checks the quality of material supplied to make sure that the supplier is maintaining the same quality of the material.
2. To meet the requirements of material
The work of production entirely depends on the availability of the material in the organization. Therefore, it is vital that the right amount of material is available in the organization at all the time so that production process can go on without any interruption.
However, ordering material in abundance is also not the right solution. Because this might end up wasting your money to buy material that will never be converted into final goods. The material manager keeps check on the material available in inventory and regularly meet the production team to learn about the material requirements and place orders with suppliers.
3. To get material at the lowest price
Every organization wants to buy the best quality material at the lowest prices possible to maximize its profits. This can only be done by the proper use of material management.
Therefore, another important objective of material management is to get the highest quality of material at the lowest prices. To do this, the material manager of the organization ask for quotations from different suppliers and choose the suppliers based on the quotations’ amount and the quality of the material.
4. Selection of suppliers
The role of a supplier is significant in the production process. For example, if your supplier fails to provide the material on time and fails to meet the unexpected demand of the material, then it will have a direct impact on business.
Therefore, the selection of suppliers is an integral part of material management. Rather than relying on one supplier, a company supplies material from at least 2 or 3 suppliers so that the supply of material never stops.
5. Limit the wastage of material
An essential objective of material management within the organization is to make sure that low or no amount of material is wasted. For this, the employees are trained so that they work efficiently and do not waste the material.
In addition to this, the material manager supervises the production work to make sure that the material is appropriately used and not wasted.
Forecasting is also an objective of material management. It is part of the job role of a material manager to keep track of the supply material in inventory and placing orders with the supplier beforehand.
Forecasting is essential to make sure that material is always available in the organization to meet the demand. Moreover, it is the responsibility of a material manager to inform the supplier beforehand about the requirement of the material so that he can prepare the material to be supplied.
7. Product enhancement
The role of a material manager is crucial when it comes to the improvement of the quality of a product. The quality of a product can be improved by the usage of the material of good quality.
The material manager works with the product manager to decide what is to be done to improve the quality of the product and what quality of the material is required to do so. Then it becomes the job of a material manager to obtain required from the suppliers.
Standardization of quality is also an objective of material management. A material manager should ensure the standard of quality of the product and the material used to manufacture that product.
9. Relationship with suppliers
Material management is necessary to maintain good relations with suppliers. Having a healthy relationship with suppliers means you keep constant communication with your suppliers.
That means you have open communication with your suppliers about the material supplies and quality of the material.
10. Consistency of material quality
An essential objective of material management is to ensure the quality of the material. The material manager checks the quality of all the supplied material before it is used for manufacturing purposes and discuss with the supplier if any difference is observed in the quality of the material.