Page 176 - DMGT525_MATERIALS_MANAGEMENT

Ashwani Panesar, Lovely Professional University
Unit 13: Evaluation of Materials Management

Unit 13: Evaluation of Materials Management Notes

CONTENTS
Objectives
Introduction

13.1 Organization
13.2 Difficulties
13.3 Process and Criteria

13.4 Reporting and Evaluating
13.5 Summary
13.6 Keywords
13.7 Review Questions
13.8 Further Readings

Objectives

After studying this unit, you will be able to:
 Discuss the Organization and Difficulties in Materials Management

 Explain Its Process and Criteria
 Discuss the Reporting and Purchasing
Introduction

Previous unit dealt with the concept of stores management, its purpose and location and layout.
It also discussed the cost aspects, productivity, problems and new developments in the area of
stores management. In this unit you will study about the organization and difficulties in the
evaluation of material management’s performance. This unit will also discuss the process and
criteria along with the reporting and purchasing for the evaluation of material management’s
performance.

13.1 Organization

The evaluation of materials management can either be done by external agencies or internally.
Within the organization itself, the top management, usually at the end of the financial year and
periodically during the year, evaluates the performance on the basis of inventory holding and
obsolete items. The user-departments evaluate the materials function in terms of the number
and the duration of the stock-out. In a few Indian organizations, committees frequently review
the performance of materials management against the objectives set for the department. It is
known that suppliers who are evaluated by the materials management department, in turn,
evaluate the materials manager with regard to quality consciousness, adherence to payment
schedule and his importance as well as decision-making capabilities in the hierarchy. The other
external agencies interested in the performance of a materials manager arc: banks with regard to
the credit-worthiness, and professional associations and national association of materials
management with respect to the ethical practices. Occasionally, external consultants evaluate
the materials management systems to suggest improvements.

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