What is materials management?

Ensuring smooth production is one of the elementary tasks of an industrial or manufacturing company. Goods can only be produced and sold without delay if an adequate material flow is ensured. The general term for all tasks related to the supply of materials is materials management.

All the actions of a company that are necessary to ensure the company's supply

Classic materials management

It comprises all tasks with a focus on supplying the company with all raw, auxiliary or operating materials, as well as spare parts from suppliers. In essence, the aim is to secure fuel for production.

Integrated materials management

In a broader sense, the term describes all the actions of a company that are necessary to ensure the company’s supply. This starts with procurement, continues with material flow management through to production and final delivery.

Subtasks that characterize materials management.

Since many areas of the company are affected by material’s management functions, an overall organization is difficult. Depending on the type of company, the size of the company and its radius of action, different criteria arise. In general, the main task of materials management is to ensure an optimal flow of goods, spatially, temporally, qualitatively and quantitatively.

To give a better overview of the important subtasks, we have compiled the most important ones below:

  • Goods flow management
  • Internal logistics
  • Supplier selection
  • Production planning
  • Valuation needs
  • Distribution

What is meant by integrated material’s management?

In contrast to the pure focus on materials supply and procurement, which characterizes materials management in the narrower sense, integrated material’s management is much more fundamental. It is a holistic view of all functional areas that are related to materials.

Within this scope, different levels of integration can also be distinguished, which are listed below:

Extended integrated materials management

A higher level of integration is about holistic production planning and controllability. All production tasks are explicitly integrated, which has the advantage that better handling during procurement and storage is possible. In addition, the so-called just-in-time delivery (JIT), i.e. just-in-time production, requires this integration step.

Fully integrated materials management

The highest degree of integration is achieved when coordination is also possible with regard to distribution. Consumer trends, specific sales questions and other details play a role here. By using high-performance warehouse management software (WMS), it is possible to optimize capacity, reduce stock shortages and reduce production times accordingly.

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