Materials Management has always been an area of scrutiny for organizations. This has become a central focal point as trends from the supply chain arena have indicated that substantial operating cash can be freed with leaner and more efficient handling of inventory.
As organizations examine the state of their inventory, they often find that visibility across locations and warehouses are inadequate, stock levels are inconsistent, demand is uncertain, and communication between stocking locations or warehouses may be minimal or non-existent. Among other things, the lack of an integrated interaction between peripheral systems and materials managers leads to unnecessary purchasing and overstocking.
The concepts of "materials management,"" "physical distribution management,"" and "logistics management- are the primary materials organizational tools-tools which have been used successfully in the past and will be used increasingly in the future to achieve closer coordination and control of a firms various materials activities.
In general materials management is concerned with bringing materials from outside of an organization to the point of production and moving in processes inventory. It deals with moving material inputs from suppliers into the organization and within the organization. The materials management concept advocates the assignment of all major activities, which contribute to materials' cost to a single materials management department. This includes the primary responsibilities which are generally found in the purchasing department, plus all other major procurement responsibilities, including inventory management, traffic, receiving, warehousing, surplus and salvage, and frequently production planning and control. Some companies also include customer service, scheduling, shipping, materials handling, and physical distribution in their definition of materials management.
It's clear that top management and materials management personnel focus their attention sharply on material costs and there is no doubt that reliable long term supply of materials is an increasingly important materials.