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"If
through any keyword search or any
reference you have stumbled upon
this professional, free and
exclusive site on MATERIALS
MANAGEMENT, you've landed ,rightly,
on a Unique site !!"
-
Vijay Mathur, Life Time CPM, APP,MBA,M.Sc. |
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Every organization, big or small, depends on
materials and services from other
organizations to varying extents. These
materials and services are obtained through
exchange of money.
The various materials used
as inputs, such as raw materials, consumables
& spares, are required to be purchased & made
available to the shops / users as & when
needed to ensure uninterrupted production.
Therefore, efficient management of input
materials is of paramount importance in a
business organization for maximizing materials
productivity, which ultimately adds to the
profitability of the organization.
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The main concern of any Business management is
to maximise the Return on Investment (ROI).
The relationship of various entities here can
be expressed as:
Profit
Sales
ROI =
---------- X
-----------------------------------------
Sales Current
Asset + Fixed Asset
Thus ROI = profit margin + asset turnover rate
A firm's profit margin reflects management's
ability to control costs in relations to
revenue. The asset turnover rate reflects
management's ability to effectively utilize
the firm's productive assets. Hence a firm can
improve ROI in three ways
- By
reducing cost
- By
getting more sales from available assets
or Get Currency converter
- By some
combination of the above
Thus , it is the cost control that holds
the key
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In many manufacturing organisations, the cost of
materials alone happens to range from 40 % to 60
% of the total expenditure. Obviously, a better
management of material is expected to ensure
reduction in overall cost of operation and
smoothness in supply of inputs.
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This requires well coordinated approach towards
various issues involving decision making with
respect to materials.
All the materials related
activities such as material planning &
indenting,
purchase systems & procedure, variety
reduction through standardization &
rationalization, reducing uncertainties in
demand & supply, handling & transportation,
inspection, proper
storage & issue of materials to the
internal customers,
inventory management, vendor management &
finally disposal of obsolete, surplus & scrap
materials etc. taken together is termed as
“INTEGRATED MATERIALS MANAGEMENT”
To carry out these functions efficiently, it
is essential to have a very good supplier
base, order booking process & inventory
management system as well as expert
MATERIALS MANAGEMENT (MM) professionals.
Materials management ,thus, can be defined
as a joint action of various materials
activities directed towards a common goal
and that is to achieve an integrated
management approach to planning, acquiring
processing and distributing production
materials from the raw material state to the
finished product state.
Materials Management as such is a key
business function that is responsible for
co-ordination 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 a
minimum cost.
Materials Management's scope is vast. Its
sub functions include Materials planning and
control, Purchasing, Stores and Inventory
Management besides others.
In its process of managing , materials
management has such sub fields as inventory
management , value analysis, receiving,
stores and management of obsolete , slow
moving and non moving. The various
activities represent these four functions:
-
Planning and control
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Purchasing
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Value analysis and
-
Physical distribution
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www.materialsmanagement.info ,a site on
Materials Management, has been created and
designed keeping in view the needs of the
undergraduate , post graduate students and
teachers and those seeking a career in
Materials Management besides the already
practicing managers and professionals of
Materials Management, working in any sized
firm located either in the domain of the
Private sector or the Public sector, across
the world.
We expect business institutes , colleges and
universities , worldwide, to make use of this
FREE site to promote international
traineeships for the students.
This site, on Materials
Management, is absolutely FREE for use by
anybody, anywhere and anytime !!
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