Change is the law of nature and it is necessary to modify business processes in order to keep evolving in this fast-paced world.Clearly, the contemporary world is different from the traditional world in many ways. Today, we have access to state-of-the-art machines, advanced tools and cutting-edge technology. Hence, these have brought a radical shift in the way businesses are managed. Many new techniques and processes have been introduced for better management of resources. In this post, we’ll delve into modern techniques of material management.
What is material management?
In an organization, material management is concerned with handling all activities related to the flow of materials. The overall process of material management varies from one enterprise to another. Generally, it includes material planning and control; purchasing of raw materials; inventory planning & control; production planning and waste management.
Importance of Materials Management
Material management holds a significant position in an organization. It is equally important as compared to other functions such as manufacturing, engineering, and finance.
- Material management ensures effective utilization of materials in order to minimize any kind of material wastage at the time of movement or storage of materials.
- It reduces any chance of late delivery.
- It controls the indirect material cost. A lack of controlling the materials cost can increase the entire production’s cost.
- Material management helps in avoiding the loss incurred by direct labor.
- With the help of materials management, the investment in materials is kept under control. Neither there is understocking of materials, nor there is overstocking.
Modern Techniques for Materials Management
Planning is an essential part of management processes. In this modern era, excess or inadequate planning for materials management can cause a threat to the organization. Thus, there is a need to introduce certain techniques and methodologies to control materials management. In general, two modern techniques for materials management are prevalent in every kind of business.
MRP (Material Requirement Planning)
In an organization, proper resource planning is pivotal to ensure proper manufacturing processes and operations. Without such planning, the organizations are liable to face various challenges related to managing different supply chain areas such as production, output, etc. In such situations, Material Resource Planning (MRP) comes as handy.
MRP refers to a planning technique that involves inventory planning and control, project planning and scheduling. It allows managers to estimate the quantity of raw materials needed for production and to schedule delivery. It makes it easy for the managers to manage, organize and assemble the materials.
ERP (Enterprise Resource Planning)
ERP is a modified version of MRP, while MRP was only confined to material planning ERP includes the planning of all enterprise-related activities. It refers to business software required to efficiently manage the resources within an organization. It provides the materials manager with some effective and necessary tools that help in the management of materials or other production resources. It has a centralized database that simplifies workflows and reduces labor. ERP was introduced after MRP when the organizations realized that it’s necessary to manage their office operations too.
These were modern techniques for material management. Clearly, the task of a material manager isn’t simple and requires immense knowledge and skills to handle the organization’s internal affairs. Thus, to have a proper understanding of materials management, aspirants must pursue a course from the best institute. If you are looking for the most up-to-date course with practical-based knowledge, then you should choose from PGDM, PGDBA and PGCM courses offered by MIT School of Distance Education. In fact, you can pursue the course in Material Management from any physical location and at any convenient time as it is a distance learning course. So, get skilled from MIT-SDE and conquer better job opportunities!