https://padlet.com/19e2082/1913101096226 Functions and Objectives en-us 2021-09-01 10:11:20 UTC 2025-11-14 16:56:42 UTC hello@padlet.com 19e2082 https://padlet.com/19e2082/1913101096226/wish/1709599950 Functions of Materials Management:

All activities concerned form the materials part of the materials management func­tion.
These functions are:

1. Purchasing:

Purchasing is one of the basic functions of materials management.

The objectives of industrial purchasing are the following:
(a) To maintain continuity of production.
(b) To buy for the best ultimate value, not necessarily always at the lowest price.
(c) To increase profits.

Effective functioning of the purchasing function is vital to the smooth operation of many other departments.

2. Inventory Control:

The word ‘inventory’ is defined as the ‘materials lying in storage or idle materials’.
Inventory control is the technique of maintaining all classes of inventory at optimum levels, with the minimum investment of capital. In other words, inventory control means balancing the two opposite forces, i.e., overstocking with all financial hazards and under stocking leading to operational bottlenecks.

3. Stores Management:

Proper receipts, inspection, storage and preservations, safety and issue of materials with efficient documentation assist in good house-keeping of materials in a ware­house. This avoids shortage and surplus during annual or continuous stock taking and prevents loss or deterioration of materials in hand.

4. Disposal of Surplus/Scrap/Obsolete 

Another important area where materials management can play an effective role is in the disposal of surplus/obsolete materials. Over a period of time manufacturing units accumulate large amounts of obsolete and surplus materials. Since the mate­rials department is in constant touch with the market, the disposal of such materials is always to the advantage of the materials department.
Not only is the materials departments in touch with the market, it is also aware of the consumption of materials in the various divisions of the company and also in similar units in the industry. By virtue of this knowledge, the materials department is in a position to sell the surplus materials to advantage or dispose it off as per the company’s policy.

Objectives of Materials Management:

“The objectives of materials management department are:

A. Primary Objectives:

1. Low price.
2. High inventory turnover (Inventory turnover = Sale/Average Inventory )
3. Low cost of acquisition and possession.

4. Continuity of supply.
5. Consistency of quality.
6. Low payroll (wage) cost.
7. Favourable supplier relations.
8. Development of personnel.
9. Maintenance of regular records.

These objectives may now be briefly described:
Low price:
This is one of the most important objectives of materials management. It means that the materials or services as received by the company should be purchased at the lowest possible cost.
High inventory turnover:
This means that the average inventory locked up is low compared to the sales volume. Inventory means idle money and, therefore, the lower it is, the higher will be the profit. Storage and carrying cost of inventory will, therefore, also be lower if the volume is small. Low cost acquisition and possession
This means that the materials are acquired and kept in stores at a low cost.

Continuity of supplies:
One of the main objectives of proper (scientific) materials management is to ensure that there is no disruption in supply which might hamper the smooth flow of production. Continuity of supply is necessary to ensure uninterrupted produc­tion.
Consistency of rights

Materials of the right quality have to be bought. Otherwise the quality of the end-product may suffer. Hence, the quality will have to be good and consistent.
Low payroll cost:
Like any other department, the materials department should be run at the lowest possible cost.
Favourable supplier relations:
As the name signifies, in order to ensure continuity of supply and consistency of quality, it is necessary to have a favourable supplier/buyer relation.
Development of personnel:
Regular developments are taking place in the materials management field. It is necessary that the persons dealing with materials management are appraised of the latest ideas and trends. Hence, the development and training of personnel engaged in materials functions is absolutely essential.
Maintenance of regular records:
For any efficiently run department it is necessary to have good, updated and easily accessible records.

B. Secondary Objectives:

1. Favourable reciprocal relations.
2. New materials and products.
3. Make or buy decision.
4. Standardisation.
5. Product improvement.
6. Inter-departmental harmony.
7. Forecast.
Favourable reciprocal relations:
It sometimes pays to buy materials from the companies to whom the end products are sold. This is called reciprocal relationship. A good materials management department should encourage such reciprocal relationships with other companies.
New materials and products:
The materials manager is always in touch with the outside world. He acts as an information centre for the management and informs the management, not only about the materials and products which his company requires, but also about the development of new products produced by its competitors.
Make or buy decision:
The decision as to whether an item should be made from within the company, i.e., with its own resources, or purchased from outside (external) sources is a very important one.
The materials department, along with the help of the engineering department, by taking the pros and cons of making or buying, should buy from outside sources only if it is economical to do so.
Standardisation:
Materials required by the company and bought from outside should be standardised so as to have a fewer number of materials. This will reduce total inventory.
Product improvement:
The materials department should also help the company in improving the quality of the end product by suggesting various alternative methods.
Inter-departmental harmony:
The materials department should have a good relationship with the other depart­ments inside the company.
Forecast:
The materials department has to prepare the materials budget and forecast of payments. The department will also forecast the prices of materials to be purchased]]> 2021-09-01 10:16:50 UTC https://padlet.com/19e2082/1913101096226/wish/1709599950