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Materials management

Materials management is a engineering topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Materials management rather than just read about it. In short: Materials management is a core supply chain function and includes supply chain planning and supply chain execution capabilities. Specifically, materials management is the capability firms use to plan total material requirements.

Key takeaways

  • Materials management belongs to engineering; place it in that map before memorising details.
  • Learn the definition first, then one example that makes the definition concrete.
  • Connect Materials management to a quantity you can measure, compute or draw — that is where exam questions come from.
  • Reproduce the core statement of Materials management from memory before moving on to harder problems.

Reference excerpt

Materials management is a core supply chain function and includes supply chain planning and supply chain execution capabilities. Specifically, materials management is the capability firms use to plan total material requirements. The material requirements are communicated to procurement and other functions for sourcing. Materials management is also responsible for determining the amount of material to be deployed at each stocking location across the supply chain, establishing material replenishment plans, determining inventory levels to hold for each type of inventory (raw material, WIP, finished goods), and communicating information regarding material needs throughout the extended supply chain.

Supply chain materials management areas of concentration

Goals

The goal of materials management is to provide an unbroken chain of components for production to manufacture goods on time for customers. The materials department is charged with releasing materials to a supply base, ensuring that the materials are delivered on time to the company using the correct carrier. Materials is generally measured by accomplishing on time delivery to the customer, on time delivery from the supply base, attaining a freight, budget, inventory shrink management, and inventory accuracy. The materials department is also charged with the responsibility of managing new launches. In some companies materials management is also charged with the procurement of materials by establishing and managing a supply base. In other companies the procurement and management of the supply base is the responsibility of a separate purchasing department. The purchasing department is then responsible for the purchased price variances from the supply base. In large companies with multitudes of customer changes to the final product there may be a separate logistics department that is responsible for all new acquisition launches and customer changes. This logistics department ensures that the launch materials are procured for production and then transfers the responsibility to the plant materials management.

Materials management

The major challenge that materials managers face is maintaining a consistent flow of materials for production. There are many factors that inhibit the accuracy of inventory which results in production shortages, premium freight, and often inventory adjustments. The major issues that all materials managers face are incorrect bills of materials, inaccurate cycle counts, unreported scrap, shipping errors, receiving errors, and production reporting errors. Materials managers have striven to determine how to manage these issues in the business sectors of manufacturing since the beginning of the industrial revolution.

Materials management in construction Materials typically account for a large portion of a construction project's budget. Materials may account for more than 70% of a construction project's cost. Despite these statistics, when project budgets and efficiency are considered, labour and cost reduction are discussed. Materials management often gets overlooked, even though successful projects are a result of a successful blend of labour, materials and equipment management. When materials are tracked efficiently project time can be optimized, costs can be saved and quality can be maximized.Efficient materials management remains a challenge in capital and investment construction projects, primarily because each project is treated as an individual endeavor requiring a customized plan. Furthermore, differences in geographical locations and technological requirements create unique and complex challenges across projects

Types of construction projects and how this effects materials management Typically, the more technically challenging a project is, the more difficult materials management becomes; however, the need for transparent materials tracking is highlighted in these types of projects. Residential construction projects: residential projects can be homes or apartment buildings, that are intended for living. Managing material flows in these projects is usually easier, because typically engineering and construction teams as well as budgets are smaller, in comparison to projects listed later in this article. Also, technical specifications for residential projects do not vary as much as, for example, in heavy-industry construction projects. Commercial construction projects: these types of projects include retail stores, restaurants and hotels. The complexity of the project and the needs for thorough material tracking will typically depend on the size of the project. Specialized industrial construction projects: these projects are large-scale and technically complex. Examples of these types of projects include nuclear power plants, chemical processing plants, steel mills, pulp mills and oil refineries. The materials procured for these projects require specific engineering knowledge (i.e. piping, valves, motors, industrial tanks, fans, boilers, control valves etc.). The importance of material tracking in these types of projects is extremely high, because the project network is large, materials are procured from all over the world and the construction sites are typically in remote locations with poor infrastructure. Industrial construction projects: examples of industrial construction projects include warehouses and manufacturing facilities. These types of projects tend to be slightly more complex than residential or commercial construction projects and they require more technical knowledge. This increases the need for efficient materials management.

Materials management in capital-heavy construction projects Materials management is the process of planning and controlling material flows. It includes planning and procuring materials, supplier evaluation and selection, purchasing, expenditure, shipping, receipt processes for materials (including quality control), warehousing and inventory, and materials distribution. After the construction project finishes, maintenance of materials can also be looked as a part of materials management. Material management processes and functions in large-scale capital projects encompass multiple organizations and integrated processes. Capital project supply networks typically include project owners, main contractors, EPC/M contractors, material suppliers, logistics partners and project site contractors.

… excerpt ends here. Continue reading the full article.

Worked examples

Example 1 — a first encounter with Materials management

Start with the simplest possible case. Write down what Materials management claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In engineering, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Materials management before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Materials management ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Materials management

In research
Materials management appears in engineering research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry
Engineering practice reuses Materials management in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom
Materials management is common in secondary-school and first-year university syllabi. It links to neighbouring topics Business terms, Distribution (marketing), Enterprise resource planning terminology, so understanding it makes those chapters shorter.
In everyday life
Look for Materials management outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Materials management in 20 minutes

  1. Read the reference excerpt below once, without taking notes.
  2. Close the page and write down what Materials management means in your own words.
  3. Compare your version with the excerpt and mark what you missed.
  4. Work through the three examples above with pen and paper.
  5. Explain Materials management out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Materials management in simple terms?

Materials management is a core supply chain function and includes supply chain planning and supply chain execution capabilities. Specifically, materials management is the capability firms use to plan total material requirements.

Why does Materials management matter?

Because it connects several engineering ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Materials management?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Materials management.

Tags

  • Business terms
  • Distribution (marketing)
  • Enterprise resource planning terminology
  • Inventory
  • Inventory optimization
  • Logistics
  • Management by type
  • Manufacturing
  • Procurement
  • Production economics
  • Supply chain management
  • Warehouses

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