This article will talk about the effect of Material Management technique on production planning process. Material management is an approach that is closely integrated with various processes such as purchasing, planning, warehousing or storage, stock-keeping and materials movement from point A to point B. In other words, it’s a management process of material involving purchasing, storage control and transportation.
Due to the rapid growth and industrial development that the 20th century has seen, the” Traditional 5M’s which are Machine, Material, Manpower, Money and Management” have been effectively managed.
The industrial revolution that took place made the material(s) the largest element of costs in any organization. Many firms in the 20th century started recognizing the importance of material and other material activities such as purchasing, warehousing or storage, stock control and the distribution process that is carried out by the organization.
Till the year 1950, organizations had identified the need for effective coordination or integration of such material activities (mentioned above) and material organization tools concept, which includes physical distribution movement, logistic movement and material management. This was a way to check, coordinate and control the organization’s activities related to materials.
At a global level, there is no definition that defines material management very clearly.
Here are a few points to keep in mind for material management:
- Identification, classification and stocks coordination
- Provision, controlling the inventory and stress accounting
- Organizing the warehouse and its layout
- Distributing and handling in house storage
- Materials in the store should be properly presented
As we have mentioned above that there are no global definition for material management, an organization has to use the most suitable or appropriate technique that works best for them. It has to be implemented in the most effective way to ensure the cost is consistent with the service provided.
As per the American Production and Inventory Control Society (APICS) material management technique and production is grouping of management function related to the complete cycle of material flow from the purchase and internal control of work in the latter term, traditionally is limited to internal control of production materials.
Upon looking at the above definition, we can easily see that they are not different from each other but there is some difference in their approach and terminology.