Importance Of Material Management

1. INTRODUCTION

1.1 INTRODUCTION OF THE TOPIC

Materials Management is simply the process by which an organization is supplied with the goods and services that it needs to achieve its objectives of buying, storage and movement of materials. Materials Management is related to planning, procuring, storing and providing the appropriate material of right quality, right quantity at right place in right time so as to co-ordinate and schedule the production activity in an integrative way for an industrial undertaking. Most industries buy materials, transport them in to the plant, change the materials in to parts, assemble parts in to finished products, sell and transport the product to the customer. All these activities of purchase of materials,

Therefore, materials management was not thought to be so important and its separate identity in the organization was not felt. But today it has become an important management activity to streamline production.

Actually before the production begins it is necessary to ensure availability of all the types of materials needed for production and its supply at the various production centre. Planning, purchasing and scheduling are the main functions of materials management. It aims at improved productivity. It is used to reduce the cost, which increases profitability and streamlines the production. Apart from management of material cost and its supply it helps in its proper utilization, transportation, storage, handling and

The costs of shrink, damage and obsolescence are the value of the write- offs taken, or stated in percentage terms, the value of those write-offs over a given period of time divided by the average inventory during that period. This assumes, however, that all write-offs were taken on a timely basis throughout the year. Were cycle counts done on a regular basis? Was everything counted on a scheduled basis, was that schedule followed, and were higher velocity items counted more frequently? Were written off on a timely basis? Was damaged and obsolete inventory written off in the current period allowed to accumulate during prior periods. Conversely, were write-offs deferred during the current period, resulting in a build up of damaged and obsolete inventory that will have to be written off in a future period. Experience has taught us that in some extreme cases these write-offs are avoided for years!

1.6 LIMITATION OF THE STUDY

In any study or research conducted there shall be some limitations associated with it. Hence, for it proper understanding of the project it is inevitable to specify the limitation of the study.

 The suggestion and conclusion drawn from this project may not be applicable to companies in the same industry

 It is not necessary that theoretical concepts would solve the problem arises in