Practices that can improve Material Management

Why improve Material Management

Any avoidable amount spent on materials or any loss due to wastage of materials increases the cost of production. The objective of materials management is to increase the efficiency in materials cost on all fronts and to optimize the overall result. Materials management refers to controlling the kind, amount, location and turning off various commodities used in and produced by the industrial enterprises. It is the control of materials in such a manner that it ensures maximum return on working capital.

Most common ways to improve Material Management involve: –

1. Real-time updates

Real-time updates make it easier to develop an accurate, timely base of data which enables maintenance/facilities teams to better plan & schedule maintenance activities and enable them to forecast cost more accurately. This allows operations personnel to better plan around a downtime and not stockpile materials.


2. KPIs

Key performance indicators (KPIs) have to be established in order to measure factors such as savings, costs, and obsolescence. If something is important enough to track, it should be measured, so that upper management can not only be kept apprised of the project’s progress but actually see its quantifiable benefits. Some measures to consider might include days or months of on-hand inventory, the number of stockouts, the ratio of rush orders to replenishment orders, and rates of parts obsolescence. Measures such as these should be tracked and posted so those responsible can see how they are performing and are in a position to act to improve performance.


3. Supply chain education & training

Holding seminars and training for people involved in the management of supply chain will allow them to understand the benefits of best practices.

Exposure to renowned supply chain professionals can be of great help to the employees involved.  Buyers, planners, and many other categories of supply chain professionals regularly benefit from ongoing education programs offered by distinguished organizations to sharpen their skills.


4. Vendor managed inventory

Vendor-managed inventory (VMI) approach often involves the supplier’s personnel being on site to manage the inventory, this allows the customer’s staff to focus on their core functions, with the assurance that the inventory is being managed properly by a trusted partner. And it means that the supplier, given the greater visibility of downstream demand, may be able to offer volume discounts that a maintenance representative at the customer would not have access to. The VMI approach can also reduce paperwork and reduce the number of inventory transactions on the customer side since the customer is paying for material as it is used.

5. Central location of the inventoryimprove material management

It will be more efficient to store materials in a central location per unit rather than keeping them in different unidentified locations. An IT-based material management system can help in tracking, managing and controlling the inventory. It can also provide a report of usage data and transaction cost so that organizations can right-size their inventory in accordance with the supply chain performance to minimize wastage.


Materials management is associated with the acquisition, control, and use of materials needed and flow of goods and services connected with the production process this is why it is necessary to improve material management of your industry as much as you can. Getting an IT system to for material management can help a lot. Learn more about Material Management module

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