Page 6 - DMGT525_MATERIALS_MANAGEMENT

Ginni Nijhawan, Lovely Professional University
Unit 1: Materials Management: An Introduction

Unit 1: Materials Management: An Introduction Notes

CONTENTS
Objectives
Introduction
1.1 Meaning and Scope of Materials Management

1.2 Objectives of Materials Management
1.3 Significance of Materials Management
1.4 Materials Management in Other Areas of Management Functions

1.4.1 Materials Management and Design/Development
1.4.2 Materials Management and Production
1.4.3 Materials Management and Sales
1.4.4 Materials Management and Finance & Accounting
1.5 Summary

1.6 Keywords
1.7 Review Questions
1.8 Further Readings

Objectives

After studying this unit, you will be able to:
 Explain the Meaning of Materials Management
 Discuss the Scope of Materials Management
 Discuss the Objectives and Significance of Materials Management

 Discuss the Role of Materials Management in Other Areas of Management Functions
Introduction

In this unit you will study about meaning and scope of materials management. The sections and
sub sections of this unit will also summarize the objectives and significance of materials
management.
Materials management is a specialized area of management which concerns itself with the
management of Material Resources. What we are attempting to do in managing materials is to
reduce and control the cost relating to this important resource, which normally accounts for
about 50 per cent on average, of the cost of production. In other words if it costs ` 100 per cent to
produce an item one may take it for granted than ` 50 is likely to be related to material which,
it will be appreciated, is a very high percentage of the total cost.
Traditionally, we are used to thinking of the cost of materials which is the price we have paid to
acquire the materials, i.e., the basic cost of the materials. This is the figure usually displayed in
a company statement of annual accounts. Materials management concerns itself not with this
cost, which as we have seen is very high, but also with a large number of other costs which add

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