What is Materials Management?
Materials Management groups handle all aspects of the flow of materials from supplier to production. The primary purpose of the group is to arrange for necessary materials to be at the right place at the right time. A major part of that equation is determining how to reduce transportation costs when moving materials, typically from a supplier or warehouse to a manufacturing or production facility. Effective materials management entails a bit of forecasting and planning. The group must have adequate knowledge of the fluctuations in demand to ensure that peak periods do not produce a shortage of materials. Because production depends heavily on the availability of materials, proper materials management is crucial to ensure effective and efficient operations throughout not only the supply chain, but the entire business.
Supply Chain Benchmarking ReportBenchmarking Report Bundle
First Pass Yield (FPY)Benchmarking Report
Materials Management KPI EncyclopediaKPI Encyclopedia
Materials Management Best Practices GuideBest Practices Guide
Materials Management Organization Chart TemplateOrg Chart Template
Distribution Center OperationsWorkflow Template
First Pass Yield (FPY)
The number of good units produced (output) by a manufacturing process without any rework divided by the total number of units that went into production (input) over the same period of time,...
KPI Type : Productivity
Formula : (Number of Good Units Produced / Total Number of Units Going Into Production) * 100
KPI Benchmark Range : 87% - 99%
A typical materials management function is composed of several common sub-functions, or teams, that work together to efficiently store and monitor the inventory in company warehouses and storage facilities, examine products and materials for defects or deviations from specifications, and ensure the efficient and timely delivery of goods/materials purchased from suppliers. Browse our Materials Management organization chart page to learn about the roles and responsibilities of each major function. Then, download our org chart template (PDF, Visio, PPT) to further understand the materials management organizational structure, and support improvement efforts within materials management operations.
Check out our materials management best practices page to view selected descriptions of work methods that have been proven to produce better results (as compared to other, similar methods). Want more? Download our Materials Management best practices guide, which provides a healthy selection of valuable best practices that can be incorporated to improve materials management operations. There might not be only one "best" way to perform every task. However, there is always a "better" way.