Definition of Material Management

Materials Management thus can be defined as that function of business that is responsible for the coordination of planning, sourcing, purchasing, moving, storing and controlling materials in an optimum manner so as to provide service to the customer, at a pre-decided level at a minimum cost.

Material management is an approach for planning, organizing, and controlling all those activities principally concerned with the flow of materials into an organisation.
The scope of Materials Management varies greatly from company to company and may include material planning and control, production planning, Purchasing, inventory control, in-plant materials movement, and waste management.

It is a business function for planning, purchasing, moving, storing material in a optimum way which help organisation to minimize the various costs like inventory, purchasing, material handling and distribution costs.

The fundamental objectives of the Materials Management function ,often called the famous 7 Rs of Materials Management, are acquisition of materials and services  :

right quality right quantity right time right product right price right place right customer From the management point of view , the key objectives of Material Management are :   To buy at the lowest price , consistent with desired quality and service  To maintain a high inventory turnover , by reducing excess storage , carrying costs and inventory losses occurring due to obsolescence  and pilferage. To maintain continuity of supply , preventing interruption of the flow of materials and services to users To maintain the specified material quality level and a consistency of quality which permits efficient and effective operation  To develop reliable alternate sources of supply to promote a competitive atmosphere in performance and pricing  To minimize the overall cost of acquisition by improving the efficiency of operations and procedures To hire, develop, motivate and train personnel and to provide a reservoir of talent To develop and maintain good supplier relationships in order to create a supplier attitude and desire furnish the organisation with new ideas , products, and better prices and service To achieve a high degree of cooperation and coordination with user departments To maintain good records and controls that provide an audit trail and ensure efficiency and honesty To participate in Make or Buy decisions