Materials Management

Materials Management

Materials Management is the strategy that manages the use, storage and delivery of materials to ensure that the right amounts of inputs are available when required by the operations manager. It involves the planning, organizing and controlling of an organisation’s materials.

The process of materials management includes:

  • Receiving and safely storing materials
  • Controlling the release of materials into the production process
  • Minimizing the holdings of surplus stock
  • Forecasting and controlling the acquisition of stock

Inventory is the goods and materials held as stock by an organisation.

Materials Management Systems

Materials Planning

A Production plan is an outline of the activities undertaken to combine resources or inputs to create goods or services, which is the output.

A Master production schedule is the first stage to be undertaken in materials planning. It details what is to be produced and when. A Master Production Schedule should include:

  • What goods and services are to be produced
  • The volume of goods or services to be produced
  • The production methods to be used
  • When and where production will take place
  • Staff required

This is followed by a Materials requirements plan. This involves developing an itemized list of all materials involved in production to meet the specified orders. A Materials Requirement Plan should include:

  • The specific materials required
  • The exact quantities
  • The best times to order from suppliers
  • The best delivery times

Inventory Control

Inventory Control ensures that costs are minimized and that the operations system has access to the right amounts of inputs when required.

Examples of Inventory Control
  • Physical stock takes
  • Barcoding
  • Computerized inventory recording
  • Security cameras.
Forms of Inventory Control
  • Physical control Examples include storing and physical movement of stock, security control and regular stock takes
  • Accounting control – Examples include maintaining a secure accounting system and regular comparisons between accounting records and physical inventory

The Just in Time Approach

Just In Time Approach is a materials management strategy that ensures that the exact amount of material inputs will arrive only as they are needed in the operations process.

  • This keeps inventory costs down, reduces capital investment and waste.
  • This strategy however is dependent on having reliable sources and suppliers, as a delay in the delivery of the inputs can delay the whole production process.

Supply Chain Relationships

Movements of inputs from suppliers to an operation system are referred to as a supply chain. It is important for an organisation to have a structured and effective supply chain to be successful.

Producers should, where possible, know their suppliers personally and develop mutual trust. Producers should also be aware of or have back up suppliers in the event that the current supplier is not able to provide what is needed by the organisation.