Page 183 - DMGT525_MATERIALS_MANAGEMENT

Materials Management

Notes 13.5 Summary

 The evaluation of materials management can either be done by external agencies or
internally.

 The user-departments evaluate the materials function in terms of the number and the
duration of the stock-out.

 While all the managerial functions like production, marketing, etc., as well as a large
number of other professions in the world are evaluated on the basis of their achievements,
materials management is one of the few professions which is judged by failures or stock-
outs.
 The concept of MBO or management by objectives can be used for goal setting and
evaluation purposes.
 The criteria of evaluation depend on the corporate objectives, company culture, functions
of materials management, evaluation process of other departments, etc., and hence could
vary, and do vary, from company to company.
 The evaluation of the materials function is usually done by the top management on the
basis of periodic reports emanating from the materials wing.
 Reporting is a two-way traffic, weekly reports containing the value of purchases, stock
status, stock-outs, etc., usually meant for the middle-level executives, are common in
many organizations.
 The frequency and content of the reports depend upon the level to which it is intended.
Quarterly and annual reports with specific recommendations on future are intended for
top management, while the monthly reports with detailed information may be sent to all
in the purchase and user departments.
 The important aspects in reporting are: (a) clarity. (b) brevity, and (c) periodicity (related
to frequency.)
13.6 Keywords

Annual Reports: The yearly financial statement issued by a mutual fund to its shareholders.
It reports on the funds assets, liabilities, and year-end earnings, as well as certain historical
information.
Brevity: The attribute of being brief or fleeting.
Budget: An estimate of income and expenditure for a set period of time.

Credit-worthiness: Trustworthiness with money as based on a person’s credit history; a general
qualification for borrowing.
Evaluation: Evaluation is systematic determination of merit, worth, and significance of something
or someone using criteria against a set of standards.
Management by Objectives: The employee and supervisor set objectives for the employee for
the coming year; the employee is evaluated on how well she/he has achieved the agreed upon
objectives.
Materials Management: The planning and control of the activities related to the materials flow
from the suppliers up to the end of the conversion/production process.
Periodic Reports: Providing information to managers using a prespecified format designed to
provide information on a regularly scheduled basis.

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