Definition of Material Management: Material management is an approach for planning, organizing, and controlling all those activities principally concerned with the flow of materials into an organisation.
• Materials planning and programming• Raw material purchase• Receiving, store keeping, and warehousing• Issuing of material• Inventory control• Transportation of materials• Vendor development• Vendor rating• Disposal of scrap and surpluses
To procure right materials In Right Quantity Of Right Quality At Right Time From Right sources At Right prices 5 R’s, principles of purchasing
• Buying the best item at the lowest cost• Maintaining the flow of production• Maintaining the quality• Resulting in lower cost• Proper relationship with suppliers• Maintaining good records
• Material cost can be lowered.• Controlling of indirect cost (such as materials movement)• Risk of inventory loss minimized eg. Theft.• Material congestion in storage places avoided• Improvement in delivery of the product
Selection of appropriate vendors Difficulty in forecasting demand accurately Maintance of product lines Optimising time and quantity for products