Materials management plays a huge role in the organization and operational efficiency of a supply chain.
If you have a vision for running the best production operation possible, then mastering materials management will be a big part of what gets you there.
Materials Management also contributes to the customer satisfaction and overall success of the company. In many ways it acts as the backbone of the manufacturing process.
It is the cause of, or cure to, many critical production issues.
Here are four reasons materials management is important to manufacturers:
- It Keeps Inventory Accurate: The problems and consequences of a poorly managed inventory are far reaching and expensive. Lost, stolen, misplaced, mislabled inventory all impact production - and anything that impacts production creates waste and adds cost. Materials management starts with good inventory management practices and accurate tracking of all the materials in a company's inventory.
- Enables JIT (Just In Time) Inventory Management: A main tenant of Lean Production, JIT Inventory management is a strategy in which the materials and parts needed for production are delivered "Just In Time" before they are used at the factory. The cost savings realized by JIT are significant and understanding why good materials management is vital for successfully implementing JIT should be pretty clear. (Related Article: How Is Just In Time Used By A 3PL?)
- Freight Costs Are Optimization: Fine tuned materials planning helps to optimize freight costs. This occurs because expensive over night and expedited deliveries are reduced. When quality suppliers know what is needed and when, they can account for lead times and the necessary transit times for the lowest cost shipping option.
- Quality Control Goes Up: A major part of materials management is ensuring materials going into production are correct and of high value. This helps to keep production running smoothly and improves overall finished goods quality.|