material management can be defined as “planning, directing and controlling the kind, amount, location, movement, and timing of the various flows of commodities (goods flow) used in and produced by a business enterprise — Bethel.” Material management does not only need a thorough understanding of the market but also tact, foresight, technical knowledge to plan, direct and control the whole process of materials till their absorption or disposal, if necessary. Material, in the raw state, forms the chief share of the ending product and total cost of manufacturing. This is the most significant component of the completed product and hence, should be handled with supreme concern. Material cost influence to a huge degree the rate of production and also the number of proceeds which an entrepreneur eventually earns
It is highly complicated, a very specialized branch of production management, whose success depends to a great extent on the proper management of materials. Materials management, really speaking, embraces almost all the functions of management—planning, organizing, directing, controlling and also a very keen sense of human relationship. The first step is recognizing that all material management systems are not created equal. Some are very generic while others are specifically designed for a market niche. The material management software for hazardous materials might be a totally different suite of tools than the one intended for managing a tool crib.
The concept of material management is not a new one but the significance it has attained in recent years is enormous. Materials have all along been considered important in a manufacturing organization but their management has assumed an added importance because of ever increasing importance of materials control in the present day competitive market. Each material management system handles different manufacturing or material handling processes at a different level of clarity. Some software packages work best in a discrete processing environment, while others can handle job lots or mixed-mode manufacturing. Still, other suites handle retail distribution from procurement to store and back to warehouse better than their industrial-minded counterparts can hope to ever fulfill.
Materials constituting a major portion of the total cost now demand special treatment and close supervision by vigilant management. Materials management did not have generally separate management staff but those of the production management used to look after materials. It is critical to have someone on your team that knows several different material management systems, ones that are pertinent to your industry. Whether that person exists within your organization or must be hired as a consultant, it is critical that you are not relying purely on sales representative information to make your implementation decision. Before you hire a consultant, have them reveal up-front any relationship they may have with companies they might recommend. You do not want an affiliate beholden to one company’s material management system who is paid for referrals to that company providing key information for your decision-making process unless you know that fact up-front.
No matter how powerful your material management system is, failing to include the human component in the fielding is a common error. There are costs involved both in training and in failure to train the users. Ensure there is pre-launch, initial launch and follow-up training provided as part of the system implementation. Material management has successfully optimized production in various facilities, but the process cannot effectively stand alone. Implementing an advanced planning and scheduling system (APS) is the next step in overall cost reduction, inventory reduction, and material flow enhancement.