In today’s competitive world, material management serves as a balancing act. The primary objective of it is to provide your customers with what they want, where they want and in the form in they require your products and services – that too at the optimum costs.
To help your business attain these objectives, it is important for your inventory management initiatives to make the correct trade-offs between the costs of providing your products/services and the levels of customer services imparted.
This article aims to discuss the coordinating functions responsible for controlling and managing material flow. It also discusses why your business needs the objectives and functions of material management to get to its next level of success.
Aim to Attain these Objectives of Material Management
The two main objectives are:-
- Maximizing the usage of the resources of your firm
- Offering better customer services
To improve upon wealth and productivity, your business must have efficient and effective manufacturing systems to rely upon. This particular objective can be aided by managing your in-house systems to make optimum use of capital, labor and material.
An effective and result-oriented way of going about it is via adequate planning and control of material flow through your manufacturing activities and business.
Supply, manufacturing planning, as well as proper control/physical distribution of the various aspects of your material flow system will help your business thrive and grow.
The ultimate goal of your ERP system should be to strike the right balance between the objectives of production; marketing and finance. This can be attained by coordinating the materials flow. In turn, the act will help your business provide the best customer services as the business resources will be properly used.
The Functionality of Material management
Purchasing, store-keeping, control of inventory, logistics & transportation, etc. happen to be the different aspects of the materials management system of your business. Given below is a quick look at important functions of stock management that have to be immaculately performed by your business.
1. Purchasing
Purchasing, one of the main functions of stock management, incorporates the following objectives
(a) Maintaining the continuity of manufacturing and production.
(b) Increasing the profits.
(c) Buying materials at their optimum and ultimate value; this may not be the lowest price though.
Overall, the effective functioning of your purchasing functions is vital for the smooth operations of other departments.
2. Inventory Control
Inventory control in ERP systems will help you maintain all classes of material at their optimum levels and that too with minimum capital investments. A well-designed inventory control system will prevent overstocking and related financial hazards. It will also prevent under stocking that will lead to operational bottlenecks.
3. Store Management
Proper receipt of materials, inspection, inventory storage and preservation, issue and safety of materials with all the requisite documentation, etc. will help in proper handling of materials in your warehouse. You can also avoid shortage and surplus in the process of annual/continuous stock taking; this, in turn, will prevent loss/deterioration of all materials in hand.
4. Disposal of Obsolete Materials/ Surplus/Scrap
Another important area in which material management plays an essential role is in the tracking and disposal of obsolete/ surplus materials. Since your materials department will always remain in constant touch with the market, appropriate disposal of these materials will serve to be advantageous to the materials department of your organization.
5. Continuity of Supplies
Proper stock management ensures regular and consistent flow of supplies so that the smooth flow of your production processes is not hampered. Continuity of supply is an important element for uninterrupted production.
Way Forward
Compare and buy the best inventory management system for your business. This will go a long way in helping your organization. Additionally, you can deliver the best quality products and services to add volumes to the productivity and profitability of your business. Start your search for the best software for material management and products, today!