Material Management: Management System Approach To Materials Management

SYSTEM APPROACH TO MATERIALS

MANAGEMENT

Decision point is continuously yielding to the pressures of environment. It is taking advantage of new developments as they occur. It is always adjusting to the state of affairs. It is treading a narrow path between too much action and too little. It is always attempting to adjust towards the desired goals. The amount of action is some function of the discrepancy between goals and observed system status. Let us take an example of very frequently used illustration in materials production pertaining to inventory models. The status of inventory is linked with the production, distributors and retailers. A demand function has been specified in order to generate the orders from the ultimate customers. At each

It is necessary to properly manage the material for efficiency of the system and controlling the costs. Organizations have to procure it in advance and hold it for some time. For example, a super market stocks thousands of items in the shelf and wait for customers, similarly in auto manufacturing company, thousands of parts are stored as inventory. Materials management is the planning and control of the activities related to the material flow from the suppliers up to the end of the conversion/production process. Ultimately, the customers consume the finished items. In simple terms, materials management is the management of materials, right from the time when a demand originates or is expected to originate leading to a need for production, all through the various stages of the processing and manufacturing etc, until it becomes a finished product and has been dispatched to a satisfied customer. It includes the planning, organization and control of all aspects of inventory management, procurement, warehousing, work-in progress, shipping, and distribution of finished goods.

Thus, activities in materials management in the FMCG Sector include anticipating materials requirements, sourcing and obtaining materials, introducing materials into the organization and monitoring the status of materials as a current asset. This also involves management of a huge amount of important information – for example, engineering, supplier, project management, cost, and delivery are part of materials