What is materials management

Materials management

Introduction to materials management

In manufacturing companies, materials management is dedicated to all processes that supply the production area with the means necessary for production (e.g. materials and operating resources). These resources are also referred to as production factors, or alternatively as "consumption factors". The production factors are divided into elementary factors and the dispositive factor. The elementary factors include operating resources, materials and the object-related human work performance. What does the cumbersome term “object-related work” mean? This designation summarizes all those actions (mental and physical work) of the employees that serve the creation of services (production), their utilization (sale) and the processing of financial processes.

In everyday business practice, materials management often has a more differentiated role than described in the classic literature. This is due to the fact that the classic materials management terms such as “procurement” and “logistics” fulfill a function in the company, but the actual implementation of these areas of responsibility can differ greatly from company to company.

What is briefly understood by materials management?

Basically, it can be described in a short sentence as follows: The term materials management includes all activities of a company that are aimed at procuring material for the company.

Differentiation from the term "integrated materials management"

The term “integrated materials management” is often mentioned in the literature. In the case of integrated materials management, materials management includes not only the logistical supply of the company with materials, but also activities that are dedicated to purchasing.

What is the difference between integrated materials management and logistics?

In short, the difference between these two areas is that materials management is more concerned with the procurement of materials, while logistics, on the other hand, is already increasingly turning to the sales area. The field of logistics therefore extends into the procurement of materials, but also deals with the sales area (keyword: sales logistics).

What tasks does materials management have?

Specifically, there are first of all the disposition, the purchasing, and the removal of material as well as the storage of material (on stock). Let us now take a closer look at the individual areas of responsibility in materials management:

  • Purchase of materials:
    The area of ​​responsibility for purchasing materials is primarily concerned with analyzing the procurement market - with the aim of being able to provide the necessary materials. Material purchasing is dedicated to researching the market that is relevant for the procurement of your own production materials. In addition, appointments are checked and orders are carried out. In the communication between material buyers and other areas of the company, there can be conflicts. Difficulties can arise, for example, in the form that material buyers are notified too late by the product developers, which means that the required materials can no longer be procured on the market at the desired conditions. It should also be mentioned that in times of globalization, ever higher demands are placed on material buyers - especially with regard to culture and language skills.
  • Store materials in stock:
    An important area of ​​responsibility of materials management is to store the materials required for production so that discrepancies (with regard to dates or material quantities) between the respective procurement market and the company's own production can be absorbed. This is intended to achieve a decoupling from the market in order to ensure that the company's own production is as constant as possible. There is also a certain potential for conflict in the company between the area responsible for storing the material and the purchasing area. For example, if the material purchasing area orders too many of certain materials because they are currently available cheaply on the market - then this can lead to practical storage problems.
  • Elimination of materials:
    Another field of materials management is the disposal of materials. When materials become obsolete for companies, they just become garbage and waste, they have to be disposed of or recycled. Materials management also takes care of this.
    Further tasks of materials management:
    In addition, an important task of materials management is to make the materials available in the required quantity and quality at the right time in the right place - and to reduce the costs for this availability in the long term.