PRODUCTION & MATE. MANG.
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According to AMMETR defines it as the “process by which an organization s supplied with goods and services that it needs to achieve its objectives. The materials management begins with the supplier and ends when the materials is consumed or incorporated into some other product. The executives who engage in materials management are concerned with three basic activities- buying, storage of materials and movement”
. Define materials management. “It covers the whole range of functions involved in covering raw materials and ancillary supplies in to finished product”. “The function responsible for the coordination of planning, sourcing, purchasing, moving, storing and controlling materials in an optimum manner so as to provide a pre decided service to the customer at minimum cost”. “According to Lee and Dobler define “Material management as a confederacy of traditional materials activities bound by a common idea – the idea of an integrated management approach to planning, acquisition, conversion, flow and distribution of production materials from the raw materials state to the finished product state”.
. Explain the merits or advantages of materials management. The following are the merits or advantages of materials management. Cost reduction: o
Reduction in the materials cost by about 5% is always possible through an official management of materials.
Maintain quantity: o
Materials contribute to the quality to the end product. The amount of materials is increasing in relation to end product. The efficient material management ensures the quality.
Centers of accountability for performance: o
Materials form an important aspect of current assets in any organization conversion of raw materials and their availability for prosperity is one of the social responsibilities of business. Hence materials management is one of the accountability for performance.
Major add value to the product: o
Materials contribute quality to the end product. The margin between the value of raw materials and finished product is known ad the value added by production.
Major part of expenditure in materials: o
They usually represent 50 to 69% of the total cost of the final product. So even a small change in material cost can lead to a substantial saving.
Productivity:
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