Materials Management 1. Importance of Material Management 2. Objectives of Material Management 3. Costs 4. Functions of Materials Management Department 5. Uses of Materials Management

1. MATERIAL
MANAGEMENT
Ms. Anjali. A
Asst. Professor
Karunya University

2. Importance
of Material
Management
• Major resources – 4 M’s – Man, Machines, Materials
and Money
• Reduction of manpower – not entertained
• Reduction in machines – not easy
• Money – always scarce – further optimisation is
impossible
• Economy achievement – through proper “material
management”

3. Objectives of
Material
Managemen
t
• To ensure uninterrupted production or operation by
maintaining steady flow of materials.
• Right quality of materials in required quantity at an
appropriate cost from proper place with right terms
and conditions so as to reduce the expenditure of
materials.
• By adopting latest techniques economy can be
achieved
• Speedy disposal of materials which are no longer
required
• Losses due to pilferage, deterioration, obsolescence
are to be kept minimum
• Reduction in capital through scientific inventory
control

4. Costs 1. Material – substance from which a product is
manufactured
• Direct and indirect material
1. Labour – human effort required for converting the
materials into finished goods and this effort is termed
as labour
• Direct and Indirect labour
1. Expenses – direct and indirect
• Direct – expenses which are directly, easily and fully
allocated to specific cost units.
• Indirect - expenses which cannot be directly, easily and
fully allocated to specific cost units

5. Functions of
Materials
Managemen
t
Department
• Planning : Estimating type of materials, their actual
quantities and the time at which it is required
• Types of materials to be purchased and to be prepared
internally
• Providing proper storage and distribution systems so
that wastage is minimum
• Disposal of excess stocks, surplus, scrap items and also
salvage of materials
• To develop new resources of supply for purchases to
remain competitive in market
• Development of ancillary units
• Cost control using cost reduction methods
• Develop co-ordination between departments
• To form R&D w.r.t materials cell

6. Uses of
Materials
Managemen
t
• Provides co-ordination b/w departments
• Helps in taking decisions speedily and accurately
• Keeps a right balance of various conflicting interests
under different functions
• To obtain a clean accountability due to centralisation of
authority – easy for corrective action
• Easy to collect data and analyse for improved decision
making
• Exposure of every individual to different aspects of
material function