What are the roles of materials management?

Plan and oversee material movement through production cycle.

Identify material requirements from production and engineering cycles.

Handle material movement with purchasing, production and engineering.

Manage policies, procedures and material control systems.

Assess and plan purchasing materials requirements.

Develop material requirements plans on automated computer system.

Set up and manage production control system.

Offer technical expertise to cross functional project teams.

Develop department budget.

Develop and review personnel to meet functional objectives.

Create purchase orders, solicit proposal bids and review goods requisitions.

Analyze price proposals and financial reports to identify reasonable prices.

Negotiate and administer supplier contracts.

Generate purchasing recommendation reports and actions.

Support buyer to negotiations with suppliers on lead time, cost, delivery and quality.

By Danielle Smyth Updated June 26, 2020

A materials manager plays an integral role in the production and shipping process. Though these managers can be found in many industries and business types, they’re most often found in factories or warehouses. Materials managers sometimes oversee other employees in addition to ensuring proper supplies and inventory. This is a highly specialized position, and those who fill it must possess a unique combination of skills.

Glassdoor explains that materials managers are tasked with managing the inventory of supplies needed by their company. They work with other managers to determine what the overall supply needs are for the business and then rely on complex budgets to determine what should be ordered. They also oversee the receiving process and ensure that new supplies are properly allocated, thereby facilitating the production and shipping process.

A materials manager may be asked to maintain inventory, ensuring that levels stay at a predetermined limit so that customer orders can be fulfilled properly and in a timely fashion. They also are tasked with maintaining relationships with suppliers and seeking new and better avenues for obtaining raw materials at lower prices. Materials managers will also need to purchase supplies and raw materials as needed.

While not a member of the quality control department specifically, a materials manager will interface with higher-level managers and those who perform QC to ensure that company standards are being adhered to. This might involve ensuring supplies aren’t being wasted due to errors on the assembly line or that products are being shipped to customers in the correct way. Other materials manager job duties include reporting to company leaders on inventory and supply budgets and efficiencies.

A materials manager is typically required to have a higher degree. Generally speaking, a bachelor’s degree in logistics or a related field is expected of someone working in this field. Materials managers who also serve as supervisors are expected to have about three years of experience in the field.

Typically, materials managers do not need a graduate degree, though a master's in a logistics- or business-related field could help to further their career path. On-the-job experience is typically more beneficial to the furthering of a materials manager’s career than education beyond a bachelor’s degree, but check specific materials manager position descriptions for more details.

Materials managers must have a deep understanding of the supply chain and inventory management. Being highly organized and detail-oriented is critical as well. Materials managers should always be thinking one step ahead, ready to anticipate needs of both inventory and supplies. This will enable them to keep production levels high and orders fulfilled in a timely fashion.

Materials managers, in many cases, supervise other employees, but often not ones within their own department. They may oversee members of the shipping team, assembly line workers or QC team members. As such, materials managers will need to have a thorough understanding of the product life cycle and the supply chain it relies on. In this way, they can properly supervise members of all related teams.

Most materials managers will use the internet for ordering, though they are also likely to have deep personal connections with suppliers and might also rely on traditional sales techniques. They should be proficient in Microsoft Office and also able to use the internet. Use of spreadsheets and in-house database programs, as well as proprietary inventory management systems, is also typically required of a materials managers. Better Team explains that, due to their role as a buyer, materials managers are often referred to as purchasing managers.

Learn about the key requirements, duties, responsibilities, and skills that should be in a materials manager job description.

Manufacturing companies always emphasize on the importance of effective material management to ensure continuous production. Ever realized how material management plays a significant role in improving productivity & profitability! Read on to learn more.

What are the objectives of Material Management?

The primary objectives of material management are 5R which means the acquisition of materials & services of the right quality, in the right quantity, at the right time, at the right place, at the right price.

At the same time, the secondary objectives are to ensure a reduction in procurement costs, reduction in inventory carrying costs, ensure high inventory turnover, minimize material handling and distribution costs.

How Material Management Improves Productivity?

Material management envelops planning for materials, procuring the right quantity as per the specified quality as well as storing the materials appropriately for smooth production. When each of these criteria is perfectly met, it helps reduce any delays, reorders time-lags and more. All this helps improve the productivity of the organization. Let us read more.

1. Optimum Material availability

Using various inventory classification methods for materials management ensures sufficient availability of vital & critical materials to avoids stock-outs or over-stocking. This provides continuous supply of materials to production process and enables timely production.

2. Quality Management

At the material planning stage quality parameters and specifications are recorded. Material Management policy ensures inspection of incoming materials for appropriate quality materials procurement. This enables maintaining the quality of products.

3. Efficient Material Storage & Distribution

Material management ensures materials are stored, distributed in warehouses, for quick access and to be made available for production without any delays.

4. Plants, Workers Efficiency & Productivity

With effective materials management, chances of stock-outs are minimized. Materials are stored at appropriate locations, for easy movement. All this ensures that plant and workers do not lose any productive hours and hence maximum utilization & higher productivity are possible.  

How Material Management Helps Improve Profitability?

A penny saved is a penny earned! Thus, reducing costs & achieving cost savings ultimately result in improved Profitability.

Using material requirement predictions helps companies to save costs involved in:

1. Procurement costs

Companies can aggregate indents and place orders for materials in bulk quantities, with staggered deliveries. This will provide a negotiation advantage & reduce purchase costs.

2. Logistics costs

When the quantities to be delivered & time schedules are well planned, companies can select the best & most economic routes thus saving on transportation costs. 

3. Inventory carrying costs

With accurate inventory predictions, Just enough materials are ordered, just in time. This avoids additional expenses for warehousing, storage etc

4. Waste Costs

When materials are acquired just in time for production, chances of materials being wasted due to non-compliance or expiry or pilferage are reduced.

5. Manufacturing costs

When companies can save or reduce costs of purchase, inventory logistics, wastes, etc. this will automatically help in reducing the manufacturing cost per unit and ultimately help improve profitability.

6. Reduction of Working Capital

With proper material management companies can avoid over-stocking, re-order inventory just in time. Companies can save some of the above-mentioned costs which result in higher liquidity and more working capital in hand.  

Leverage Material Management Solution

Now that we have seen how effective material management plays a vital role in improving the productivity and profitability, we recommend manufacturing companies should invest in Material Management Software Solution to implement the above mentioned ideas and have a great control & real-time visibility of material management process. This will enable them to :

• Set up standard material management processes and ensure effective material management.
• Achieve real-time visibility into materials, inventory, items in stock across multiple locations of the organization.
• Implement Material Requirement Planning (MRP) methods and define quality specifications to help plan inventory requirements accurately.
• Define reorder points and send notifications/alerts when inventory reaches a certain point and has to be replenished.
• Ensure just in time purchases and optimum inventory

This article is an excerpt from a blog "Role of Material Management in Improving Productivity & Profitability" that appears on the Force Intellect website