Materials Management

Resources for Improving Materials Management Operations

  • 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, in short, is to arrange for necessary materials to be at the right place at the right time. A major part of that equation is to work toward the lowest possible cost of transport when moving materials from place to place, typically from a supplier or warehouse to a manufacturing or production facility. Effective materials management, therefore, entails a bit of forecasting and planning. The group must have adequate knowledge of the fluctuations in demand to ensure that peak periods, including periods of unexpected demand, 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. These pressures require keen managerial and supervisory functions.
  • The History of Materials Management

    Methods to track and monitor inventory go back as far as writing itself. The Sumerians, Babylonians and Egyptians after them, marked their grain containers to indicate both content and amount. Modern techniques for scientific materials management, however, are a far more recent development. Beginning with the expansion of railroads in the United States, and the heavy industry that accompanied that growth, businesses increasingly began to be conscious of how and when they ordered supplies and shipped finished goods. Frederick Winslow Taylor’s principles of scientific management encouraged the economical use of materials to help to reduce the cost of production in the early twentieth century, although Charles Babbage had already laid the foundation for materials management earlier in the nineteenth century. Detailed and intensive control of supplies became a more widespread concern with the US entry into World War I, and gradually grew thereafter.

    Even after the First World War, most businesses employed a “push” model for materials management. The experience of nineteenth-century heavy industry had caused manufacturers to order an abundance of stock, which they maintained in voluminous warehouses, to ensure constant production and prevent costly interruptions in the manufacturing process. This method meant that producers often found themselves with large supplies of raw materials or finished products that needlessly occupied space until demand was strong enough to deplete their excess supplies. After World War II, however, businesses moved toward a “pull” method of inventory control that focused on ordering additional materials only when supplies fell to a pre-determined level. While the “pull” model allows for more efficient use of space, it requires better forecasting to determine what level is the appropriate point at which to place an order and to account for delays in communication or slow lead time. The demand for better forecasts improved overall materials management and required closer attention to consumer demand, operations and inventory measurement.
  • Modern Trends in Materials Management

    Effective materials management is essential to a business’s success. Good control not only keeps costs low, but also improves relationships with supply chain partners and customers. Increasing competition, especially as markets become more global, adds to the importance of proper materials management, which in turn requires attention to organization structure, process efficiency and operations.

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