What is Materials Management & Why is it Important to Manufacturers

Materials management also contributes to 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.

What is Materials Management?

Materials management refers to the systematic planning, sourcing, procurement, storage, distribution, and control of materials within an organization to ensure efficient and cost-effective operations. It encompasses the entire lifecycle of materials, from their initial acquisition to their eventual consumption or transformation into finished products. 

Effective materials management involves optimizing inventory levels, streamlining supply chain processes, forecasting demand, and monitoring the movement of materials to minimize waste, reduce costs, and maintain consistent production schedules. By carefully managing materials, organizations can improve productivity, meet customer demands, and enhance their competitive advantage in the market.

four reasons materials management is important to manufacturers

1. It Keeps Inventory Accurate: The problems and consequences of a poorly managed inventory are far-reaching and expensive. Lost, stolen, misplaced, mislabeled 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.
    
2. Enables JIT (Just In Time) Inventory Management: The 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.  
    
3. Freight Costs Are Optimization: Fine-tuned materials planning helps to optimize freight costs. This occurs because expensive overnight 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.
    
4. 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.

As your 3PL partner, ODW can develop a supply chain solution that meets your specific needs, controls costs, and enables your manufacturing business to scale.