MM/U1 Topic 2 Meaning and Concept of Integrated Materials Management
Meaning of Integrated Material Management
Materials Management as a function is responsible for the 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.
If the above functions of Materials Management are separately handled a conflict of interests occurs and there is a need to balance the conflicting objective from a total organization point of view so as to achieve optimum results for the organization.
The organization which are following integrated Materials Management concept require the services of professional managers so that they can fulfill the requirements of an integrated materials management functions which demand an ability to bring together conflicting and yet inter-related functions.
Objectives of Integrated Material Management
The fundamental objectives of an integrated material management approach can be viewed as:
(a) Procuring better value
(b) Obtaining better yield
(c) Reducing investments in stock through Inventory control and material flow.
In an integrated set-up the materials manager who is responsible for all such inter-related functions is in a position to exercise control and co-ordinate with an overview that ensures proper balance of the conflicting objective of the individual functions. Integration also helps in the rapid transfer of data, through effective and informal communication channels.
Advantages of Integrated Material Management
Following are some of the advantages of Integrated Materials Management:
- Better Accountability
By effective centralization of authority and responsibility for all aspects of materials function, clear cut accountability is established. This helps in evaluating the performance of materials management in an objective manner.
- Better Co-Ordination
When the materials manager is responsible for all functions it results in better support and co-operation in the accomplishment of the materials function. Better co-ordination create an atmosphere of trust and better relation between the user departments and the materials management department.
- Improved Performance
As all the inter-related functions are integrated organisationally, better performance and effectiveness is achieved. The need for materials is promptly brought to the notice by materials planning and purchase department is supplied with stock levels and orders status by stores department.
- Adaptability to Computerization
The Centralization of materials functions has made it possible to design data processing systems. The integrated materials management facilitates the collection, process and analysis of data, leading to better decisions. Computerization can be economically introduced under an integrated set-up.