MM/U1 Topic 4 Organizational Structure of Materials Management Department
Material management is an important function of an organization covering various aspects of input process, i.e., it deals with raw materials, procurement of machines and other equipment’s necessary for the production process and spare parts for the maintenance of the plant. Thus in a production process materials management can be considered as an preliminary to transformation process.
It involves planning and programming for the procurement of material and capital goods of desired quality and specification at reasonable price and at the required time.
It is also concerned with market exploration for the items to be purchased to have up to date information, stores and stock control, inspection of the material received in the enterprise, transportation and material handling operations related to materials and many other functions. In the words of Bethel, “Its responsibility end when the correct finished product in proper condition and quantity passes to the consumer.”
- ‘Materials Management’ is a term used to connote “controlling the kind, amount, location, movement and timing of various commodities used in production by industrial enterprises”.
- Materials Management is the planning, directing, controlling and coordinating those activities which are concerned with materials and inventory requirements, from the point of their inception to their introduction into the manufacturing process.
- Materials Management is a basic function of the business that adds value directly to the product itself
- Materials Management embraces all activities concerned with materials except those directly concerned with designing or manufacturing the product.
- Materials Management deals with controlling and regulating the flow of material in relation to changes in variables like demand, prices, availability, quality, delivery schedules etc.
General Electric Company (G.E.C.) of U.S.A. who is pioneers in the field of Materials Management listed the functions of materials management under following heads:
(i) Planning and programming for materials purchase.
(ii) Stores and Stock control.
(iii) Receiving and issue of the material.
(iv) Transportation and material handling of the material.
(v) Value engineering and value analysis.
(vi) Disposal of scrap and surplus materials.
To facilitate planning, direction, control and co-ordination of various activities related to material in an enterprise there should be a separate department of materials management. The organisational structure of the department can be.
There can be more sub-sections of the department but in general, materials manager controls the four major sections and is responsible for reporting to the president of the organization.