Organisation of Material Management
Organisation by Function:
This generally means that the organisation is based on specialisation. Such an organisation chart is shown below:
Here, the transport manager, the purchasing manager, the inventory control manager and the stores manager are all specialised in their respective lines. The advantage of this system is that economic use is made of the highly paid people.
However, there are disadvantages also. Firstly, a man dealing with same subject, again and again, may suffer from boredom. Secondly, if the job becomes too specialised, there is a tendency for everyone to ‘pass the buck’ and avoid responsibility somehow for solving a problem that is not part of one’s routine job.
Organisation by Location:
This is applicable to companies having plants located at various places. The organisation chart is shown below:
The advantage of such organisation is that things will move quickly and there will be continuity of supply. However, one disadvantage is that prices of items may not be the same in different plants at the same time.
Organisation by Product:
This type of organisation is found in companies dealing with a larger number of end products and where specialised knowledge in various types of raw materials required for these products is necessary.
The organisation chart is shown below:
Normally, the materials management department’s organisation chart is a combination of all these various organisation charts. Since such a chart is complicated one, it is not presented here.