{"id":6904,"date":"2023-06-29T08:54:00","date_gmt":"2023-06-29T08:54:00","guid":{"rendered":"https:\/\/www.mrpeasy.com\/blog\/?p=6904"},"modified":"2025-10-17T07:43:48","modified_gmt":"2025-10-17T07:43:48","slug":"materials-management","status":"publish","type":"post","link":"https:\/\/www.mrpeasy.com\/blog\/materials-management\/","title":{"rendered":"Materials Management \u2013 Definition, Benefits, Best Practices"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Implementing proper materials management practices allows businesses to make sure the correct materials with the best price and quality reach the shop floor at the right time and in the correct quantity. Follow these best practices to get more control over this essential segment of the supply chain.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2023\/07\/materials-management-1024x576.jpg\" alt=\"materials-management\" class=\"wp-image-15045\" srcset=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2023\/07\/materials-management-1024x576.jpg 1024w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2023\/07\/materials-management-300x169.jpg 300w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2023\/07\/materials-management-768x432.jpg 768w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2023\/07\/materials-management-1536x864.jpg 1536w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2023\/07\/materials-management.jpg 1920w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<!--more-->\n\n\n\n<p class=\"wp-block-paragraph\"><em>You can also listen to this article:<\/em><\/p>\n\n\n\n<iframe title=\"Materials Management \u2013 Definition, Benefits, Best Practices\" allowtransparency=\"true\" height=\"150\" width=\"100%\" style=\"border: none; min-width: min(100%, 430px);height:150px;\" scrolling=\"no\" data-name=\"pb-iframe-player\" src=\"https:\/\/www.podbean.com\/player-v2\/?i=at6ng-14e88a8-pb&#038;from=pb6admin&#038;share=1&#038;download=1&#038;rtl=0&#038;fonts=Arial&#038;skin=1&#038;font-color=auto&#038;logo_link=episode_page&#038;btn-skin=3\" loading=\"lazy\"><\/iframe>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #343333;color:#343333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #343333;color:#343333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#What_is_materials_management\" >What is materials management?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#What_is_Sustainable_Materials_Management_SMM\" >What is Sustainable Materials Management (SMM)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Benefits_of_materials_management\" >Benefits of materials management<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Materials_management_best_practices\" >Materials management best practices<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Set_standards_for_material_specifications_and_quality\" >Set standards for material specifications and quality<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Conduct_regular_quality_checks_and_evaluate_supplier_performance\" >Conduct regular quality checks and evaluate supplier performance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Know_the_exact_amount_and_location_of_your_directraw_materials\" >Know the exact amount and location of your direct\/raw materials<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Keep_track_of_your_directraw_materials_inventory_costs\" >Keep track of your direct\/raw materials inventory costs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Create_a_plan_and_follow_it\" >Create a plan and follow it<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Use_inventory_control_techniques\" >Use inventory control techniques<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Minimize_search_time_by_using_material_kitting\" >Minimize search time by using material kitting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Utilize_technology_to_make_processes_more_efficient\" >Utilize technology to make processes more efficient<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Key_takeaways\" >Key takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#Frequently_asked_questions\" >Frequently asked questions<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_materials_management\"><\/span>What is materials management?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Materials management refers to the strategic planning, coordination, and control of all activities involved in the procurement, storage, handling, and utilization of materials within a manufacturing organization. The process is aimed at managing the quality, sourcing, and price of materials, as well as their location and movement within the manufacturing pipeline.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The goal of materials management is to ensure that the right materials are available in the right quantities, at the right time, and in the right condition, while minimizing costs and optimizing efficiency. The job of the materials manager is to achieve this goal by ensuring close coordination between inventory, procurement, and production, and setting up procedures for communicating material requirements and distributing raw materials down the supply chain.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While some organizations may consider materials management a subsection of overall procurement management, other companies treat them as separate entities that serve different areas of a business. Others still may divide the functions of materials management between many business departments like procurements, supply chain, logistics, etc. This is often the case for larger manufacturing or construction enterprises.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As part of<a href=\"https:\/\/www.mrpeasy.com\/blog\/procurement-management\/\" target=\"_blank\" rel=\"noreferrer noopener\"> procurement management<\/a>, materials management includes everything related to the sourcing and purchasing of materials. However, if treated as a separate subsection of supply chain management, it becomes a link between procurement and production, dealing mostly with <a href=\"https:\/\/www.mrpeasy.com\/material-requirements-planning\" target=\"_blank\" rel=\"noreferrer noopener\">material requirements planning<\/a>, coordinating material deployment and replenishment, and conducting quality control and inventory analysis for direct materials.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is worth mentioning that the materials used in manufacturing are usually divided into direct and indirect materials. Direct materials are the raw materials that are used in the products a company produces: rubber in tires, sugar in soda, etc. Indirect materials are items and materials used in the manufacturing process that do not make up the product itself. These may include adhesives, staples, equipment, or spare parts. In most cases, materials management includes controlling the flow of both.<\/p>\n\n\n<div class=\"banner-v2\">\n    <p class=\"banner-v2__desc\">Easily manage the flow of your materials with MRPeasy<\/p>\n    <a class=\"banner-v2__link\" href=\"https:\/\/www.mrpeasy.com\/sign-up\/\" target=\"_blank\" data-ga-event=\"blog_signup_banner_blue\">Try for free<\/a>\n<\/div>\t\t<style>.banner-v2 {\n    float: right;\n    display: flex;\n    flex-direction: column;\n    justify-content: center;\n    align-items: center;\n    padding: 40px 32px;\n    gap: 16px;\n    width: 356px;\n    height: 205px;\n    background: linear-gradient(199.68deg, #6084E5 13.17%, #5FA7DD 82.1%);\n    border-radius: 4px;\n    margin-left: 12px;\n    margin-bottom: 12px;\n    margin-top: 15px;\n}\n\n@media (max-width: 767.98px) {\n    .banner-v2 {\n         width: 100%;\n         height: 173px;\n         margin-bottom: 0;\n         margin-left: 0;\n    }\n}\n\n.single__content p.banner-v2__desc {\n    margin: 0 !important;\n}\n\np.banner-v2__desc {\n    width: 292px;\n    font-style: normal;\n    font-weight: 700;\n    font-size: 22px;\n    line-height: 29px !important;\n    text-align: center;\n    color: #FFFFFF;\n    margin: 0 !important;\n    order: 0 !important;\n}\n\n.single__content a.banner-v2__link {\n    color: #FFFFFF !important;\n}\n\n.single__content a.banner-v2__link:hover {\n    color: #003557 !important;\n}\n\na.banner-v2__link {\n    display: flex;\n    justify-content: center;\n    align-items: center;\n    width: 181px;\n    height: 51px;\n    padding: 18px 0;\n    border-radius: 4px;\n    background: #003557;\n    font-weight: 700;\n    font-size: 16px;\n    color: #FFFFFF !important;\n    text-decoration: none !important;\n    order: 1 !important;\n}\n\n.banner-v2__link:hover {\n    background: white;\n    color: #003557 !important;\n}<\/style>\n\t\t\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Sustainable_Materials_Management_SMM\"><\/span>What is Sustainable Materials Management (SMM)?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Sustainable Materials Management (SMM) is an approach to promoting resource and energy efficiency that <a href=\"https:\/\/www.mrpeasy.com\/blog\/product-lifecycle-management-plm\/\" target=\"_blank\" rel=\"noreferrer noopener\">considers the entire lifecycle of a product or material<\/a>. This includes the design, manufacture, use, and management of products and materials, as well as solid waste management, in a way that minimizes their impacts on the environment, conserves resources, and reduces waste.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The SMM approach, as defined by the U.S. Environmental Protection Agency (EPA), is based on the principle that our economic well-being and environmental health are intrinsically linked. It seeks to:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Use materials wisely, reducing the amount and toxicity of waste we generate.<\/li>\n\n\n\n<li>Conserve resources and minimize the environmental impacts associated with the materials we use.<\/li>\n\n\n\n<li>Promote innovative products and processes that can significantly reduce environmental impacts.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">SMM involves a change in how a society views and uses materials, transitioning from a linear model of &#8216;take-make-waste&#8217; to a more circular model where materials are reused, recycled, or composted at their end of life. The ultimate goal of SMM is to ensure that material use contributes to the sustainable future of our planet, promoting not just environmental health, but also economic prosperity and social wellbeing.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_materials_management\"><\/span>Benefits of materials management<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Implementing effective materials management processes comes with an array of benefits that could reverberate throughout your operation.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Streamlined procurement.<\/strong> Materials management ensures the procurement of the right materials in the right amount, which allows companies to streamline procurement processes and eliminate excess costs. Precise procurement prevents wastage and can result in significant savings.<\/li>\n\n\n\n<li><strong>Efficient inventory control.<\/strong> One of the key aspects of materials management is maintaining optimal inventory levels. This can prevent both overstocking and <a href=\"https:\/\/www.mrpeasy.com\/blog\/stockout\/\" target=\"_blank\" rel=\"noreferrer noopener\">stockouts<\/a>, reducing the costs related to unnecessary storage or rush ordering, leading to overall cost-effectiveness.<\/li>\n\n\n\n<li><strong>Effective warehousing:<\/strong> Proper organization and control of warehousing operations lead to better space utilization and reduced costs. Materials management plays a key role in achieving this operational efficiency.<\/li>\n\n\n\n<li><strong>Accurate production schedules.<\/strong> Effective materials management enables precise planning and execution of production schedules. By accurately forecasting the demand for and availability of materials, businesses can ensure that production processes run smoothly and without interruption. This on-time production not only reduces <a href=\"https:\/\/www.mrpeasy.com\/blog\/production-downtime\/\" target=\"_blank\" rel=\"noreferrer noopener\">downtime<\/a> but also boosts overall operational efficiency and customer satisfaction, as on-time deliveries become the rule rather than an exception.<\/li>\n\n\n\n<li><strong>Promotion of sustainability.<\/strong> With the concept of Sustainable Materials Management, organizations can reduce environmental impacts and conserve natural resources. This life-cycle approach promotes resource efficiency and contributes to corporate social responsibility initiatives.<\/li>\n\n\n\n<li><strong>Enhanced quality control.<\/strong> Rigorous material management processes can help ensure the quality of materials used in the production process. This not only improves the manufacturing process but also enhances the final product quality, leading to better customer satisfaction.<\/li>\n\n\n\n<li><strong>Reduced waste.<\/strong> By adopting the principles of the circular economy and effective waste management, materials management can contribute to reducing solid waste. It maximizes the use and reuse of resources, which is not just cost-effective but also helps in conserving natural resources.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In conclusion, materials management, when executed properly, can provide economic, operational, and environmental benefits. It ensures efficiency and sustainability in the use of materials, aids in meeting customer demand effectively, and plays a crucial role in the performance of any manufacturing company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Materials_management_best_practices\"><\/span>Materials management best practices<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Effective materials management involves several best practices that can significantly enhance operational efficiency and sustainability. Here are some key best practices:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Set_standards_for_material_specifications_and_quality\"><\/span><strong>Set standards for material specifications and quality<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The materials manager is the ultimate decision-maker when it comes to <a href=\"https:\/\/www.mrpeasy.com\/blog\/quality-control\/\" target=\"_blank\" rel=\"noreferrer noopener\">quality control<\/a> and approving raw materials for purchasing. However, the materials manager cannot be at the helm of every purchasing process and every quality check, so they need to set standard operating procedures to be followed by those participating in the process. That includes putting material specifications as well as quality and sourcing requirements in place. This is the basis for maximizing product conformity and minimizing non-conformity.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conduct_regular_quality_checks_and_evaluate_supplier_performance\"><\/span><strong>Conduct regular quality checks and evaluate supplier performance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Effective quality control starts before the production process. Of course, no company is capable of assessing the quality of every unit of raw materials they receive, but quality control checks should be done on a regular basis, as often and as thoroughly as financially viable. In most cases, failures due to bad quality (especially internal failures, i.e. those detected by the customer, the ones necessitating returns, repairs, etc.) <a href=\"https:\/\/www.mrpeasy.com\/blog\/cost-of-quality\/\" target=\"_blank\" rel=\"noreferrer noopener\">are more expensive than measures taken to ensure good quality<\/a>. Partner with suppliers that can reliably provide the right materials, in the right amounts, at the right time. Evaluate suppliers based on factors such as cost, quality, reliability, and sustainability practices.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Read more about <\/em><a href=\"https:\/\/www.mrpeasy.com\/blog\/supplier-performance-management\/\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Supplier Performance Management<\/em><\/a><em>.<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Know_the_exact_amount_and_location_of_your_directraw_materials\"><\/span><strong>Know the exact amount and location of your direct\/raw materials<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In order to provide the factory floor with the needed materials at the right time, you will have to know where and in which quantity the materials are. Correct markings and good warehouse organization are imperative in every company dealing with physical inventory. Physical counts should be conducted periodically to detect inconsistencies or misplacements, but technological solutions such as inventory management software or MRP software should be used to account for inventory in the day-to-day.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Keep_track_of_your_directraw_materials_inventory_costs\"><\/span><strong>Keep track of your direct\/raw materials inventory costs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A substantial portion of the average manufacturer\u2019s expenses comes from direct material costs. Therefore, it is absolutely essential to make sure that excess inventory is not tying up cash that could be put into good use elsewhere. Furthermore, holding inventory for too long could result in perished or damaged goods. This is especially true in the case of materials that have an expiry date. Manufacturers should consider different <a href=\"https:\/\/www.mrpeasy.com\/blog\/inventory-valuation-methods\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory valuation methods<\/a> (e.g. FIFO, LIFO, Weighted Average) according to the nature of their business.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Create_a_plan_and_follow_it\"><\/span><strong>Create a plan and follow it<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Material planning is a vital part of materials management. After demand planning, i.e. predicting the product quantities you will sell during a set period, you can use the bills of materials of your products to calculate your material requirements for the period. Then, looking at the material quantities you already have available in stock, you can determine the amount of materials you have to order and create a material delivery schedule to make sure that raw materials are constantly fed into production and work would not stop because of a material stockout.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Use_inventory_control_techniques\"><\/span><strong>Use inventory control techniques<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Using proven inventory control techniques might give you better insight into the performance of your SKUs and provide you with the knowledge that would help you minimize your inventory costs.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong><em>ABC (+XYZ) analysis<\/em><\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">By applying the Pareto principle (or 80\/20 rule) to inventory management, ABC analysis allows you to prioritize your SKUs according to their consumption value. Conducting an ABC analysis will divide your materials into three categories:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u2013&nbsp; A for about 20% of the total SKUs that make up about 80% of the total consumption value. These items will receive the most attention: higher service levels, more review time, etc.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u2013&nbsp; B for about 30% of the SKUs making up around 15% of the total consumption value. These will receive less attention than A-category items and more attention than C-category items.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u2013&nbsp; C for about 50% of the SKUs that make up only 5% of the total consumption value. These will have the least amount of resources allocated to them.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In case only one parameter proves to be too basic in prioritizing your items, adding XYZ analysis into the mix also lets you account for fluctuations in the consumption patterns of the SKUs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Read more from <\/em><a target=\"_blank\" href=\"https:\/\/www.mrpeasy.com\/blog\/abc-analysis\/\" rel=\"noreferrer noopener\"><em>this article about ABC and XYZ Analysis<\/em><\/a><em>.<\/em><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong><em>Safety Stock and Reorder Point<\/em><\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Safety stock is the buffer of materials you hold to avoid stock-outs and continue production in case irregularities occur in the supply chain due to shifting supply or demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The reorder point is the set level of inventory at which an order for an SKU is triggered when it is time to replenish its stock.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Having only a reorder point set means that when delivery times exceed the expected time to a stock-out, your materials will be exhausted and production will stop until new materials arrive. However, having a safety stock will prevent that from happening as well. Both of these values need to be mathematically defined, however, in order to ensure that they provide the most value to your business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>You can find out more about these techniques from our blog posts about <\/em><a href=\"https:\/\/www.mrpeasy.com\/blog\/safety-stock\/\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Safety Stock<\/em><\/a><em> and <\/em><a href=\"https:\/\/www.mrpeasy.com\/blog\/what-is-reorder-point-and-reorder-point-formula\/\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Reorder Point<\/em><\/a><em>.<\/em><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong><em>Just in Time<\/em><\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Just in Time is not just an inventory control method but also a general approach to manufacturing that aims to minimize the time a product spends in the supply chain \u2013 from the supplier of the materials to the end consumer. This way, manufacturers can avoid overproduction, reduce bottlenecks and waiting time in production processes, and avoid holding <a href=\"https:\/\/www.mrpeasy.com\/blog\/excess-inventory\/\" target=\"_blank\" rel=\"noreferrer noopener\">excess inventory<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When talking about materials management, the general idea of JIT is to provide materials as they are needed, as closely according to demand as possible. As a consequence, the movement of materials is streamlined while inventory levels along with holding space and costs are drastically reduced.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Read more about <\/em><a target=\"_blank\" href=\"https:\/\/www.mrpeasy.com\/blog\/just-in-time-manufacturing\/\" rel=\"noreferrer noopener\"><em>Just in Time Manufacturing<\/em><\/a><em>.<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Minimize_search_time_by_using_material_kitting\"><\/span><strong>Minimize search time by using material kitting<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Material kitting means bundling the components of a BOM into a ready-to-consume set before arriving on the production floor. This technique simplifies line-side inventory and improves <a href=\"https:\/\/www.mrpeasy.com\/blog\/order-picking\/\" target=\"_blank\" rel=\"noreferrer noopener\">order picking<\/a> speed, reporting, and quality control processes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a general rule, the practice of kitting would be most beneficial when dealing with large varieties of small components, customized products with different variables, or a lack of space on the shop floor that does not allow for much line-side inventory.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Read more about <a target=\"_blank\" href=\"https:\/\/www.mrpeasy.com\/blog\/kitting\/\" rel=\"noreferrer noopener\">how to set up kitting processes<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Utilize_technology_to_make_processes_more_efficient\"><\/span><strong>Utilize technology to make processes more efficient<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">There are loads of technological solutions available that can aid manufacturers and materials managers in improving their business processes. Barcoding, RFID and IoT devices, and warehouse management software aid in managing and closely tracking your inventory. But what complements all areas of materials management along with all the other departments of a manufacturing company is a <a target=\"_blank\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-erp-systems\/\" rel=\"noreferrer noopener\">manufacturing ERP system<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A good manufacturing ERP allows manufacturers to coordinate their whole business in one single program. This includes material management processes like material requirements planning, material deployment and replenishment, <a href=\"https:\/\/www.mrpeasy.com\/blog\/supplier-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">supplier management<\/a>, quality control, inventory control and analysis, kitting, etc.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In addition, a manufacturing ERP system streamlines other manufacturing operations management processes, including production planning and scheduling, order management, <a href=\"https:\/\/www.mrpeasy.com\/blog\/return-merchandise-authorization-rma\/\" target=\"_blank\" rel=\"noreferrer noopener\">return merchandise authorization (RMA)<\/a>, and much more, improving management practices and efficiency across the company.<\/p>\n\n\n<div class=\"banner-v1\">\n    <div class=\"banner__text\">\n        <div class=\"banner-v1__title\">Make sure quality materials reach production at the right time<\/div>\n        <div class=\"banner-v1__desc\">MRPeasy allows you to easily plan material requirements, manage quality inspections for incoming goods, and much more.<\/div>\n        <div><a class=\"banner-v1__link\" href=\"https:\/\/www.mrpeasy.com\/sign-up\/\" target=\"_blank\" data-ga-event=\"blog_signup_banner_white\">Try for free<\/a><\/div>\n    <\/div>\n    <div class=\"banner__img\">\n        <img decoding=\"async\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/themes\/mrpeasy\/assets\/images\/banner.svg\" alt=\"banner\">\n    <\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_takeaways\"><\/span>Key takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Materials management involves the strategic planning, coordination, and control of activities involved in the procurement, storage, handling, and utilization of materials. It aims to provide the right materials, in the right quantities, at the right time, and in the right condition, while minimizing costs and optimizing efficiency.<\/li>\n\n\n\n<li>Sustainable Materials Management (SMM) is an approach that promotes resource and energy efficiency, taking into account the entire lifecycle of a product or material.<\/li>\n\n\n\n<li>Effective materials management can streamline procurement, control inventory efficiently, improve warehousing operations, and maintain accurate production schedules.<\/li>\n\n\n\n<li>Best practices include setting standards for material specifications and quality, conducting regular quality checks and supplier performance evaluations, keeping track of direct\/raw materials inventory and its costs, and having a comprehensive material plan.<\/li>\n\n\n\n<li>Inventory management software or MRP\/ERP software can assist in tracking, organizing, and planning for inventory, thereby increasing material management efficiency.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Frequently_asked_questions\"><\/span>Frequently asked questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1688643106718\"><strong class=\"schema-faq-question\">What is an example of materials management?<\/strong> <p class=\"schema-faq-answer\">An example of materials management is a car manufacturer organizing the procurement, storage, and usage of specific raw materials like steel, rubber, and glass, ensuring they are available in the right quantities and at the right time to produce a particular model of a car. They might use manufacturing ERP software to accurately forecast demand, manage inventory levels, and schedule procurement, ensuring a smooth production process.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1688643273568\"><strong class=\"schema-faq-question\">What is the difference between SCM, OM, and MM?<\/strong> <p class=\"schema-faq-answer\">Supply Chain Management (SCM) involves managing the entire flow of goods and services, from raw materials procurement to delivering final products to customers. Operations Management (OM) oversees the day-to-day production processes within a company, focusing on the efficiency and effectiveness of operations. Materials Management (MM), on the other hand, specifically handles the sourcing, acquisition, storage, and allocation of materials required in the production process.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1688643367809\"><strong class=\"schema-faq-question\">Is materials management part of logistics?<\/strong> <p class=\"schema-faq-answer\">Yes, materials management is a part of logistics as it involves the storage, control, and movement of materials within and from an organization, which are crucial aspects of the logistics process.<\/p> <\/div> <\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><em>You may also like: <a aria-label=\"5 Tips for Making Material Planning More Effective (opens in a new tab)\" href=\"https:\/\/www.mrpeasy.com\/blog\/5-tips-for-making-material-planning-more-effective\/\" target=\"_blank\" rel=\"noreferrer noopener\">Material Planning &#8211; Definition, Tools, and Tips<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Implementing proper materials management practices allows businesses to make sure the correct materials with the best price and quality reach the shop floor at the right time and in the correct quantity. Follow these best practices to get more control over this essential segment of the supply chain.<\/p>\n","protected":false},"author":7,"featured_media":15045,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[96,94,384],"tags":[283,317,197,143,30,439,440,196,195,17,66,10],"class_list":["post-6904","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-inventory","category-tips","category-supply-chain-management","tag-inventory-control","tag-managing-quality","tag-manufacturing-resource-planning","tag-material-planning","tag-material-requirements-planning-software","tag-materials-management","tag-materials-manager","tag-mrp-i","tag-mrp-ii","tag-mrp-system","tag-mrpeasy","tag-quality-control"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ 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Combining scientific literature with his easily digestible writing style, he shares his industry-findings by creating educational articles for manufacturing novices and experts alike. 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They might use manufacturing ERP software to accurately forecast demand, manage inventory levels, and schedule procurement, ensuring a smooth production process.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#faq-question-1688643273568","position":2,"url":"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#faq-question-1688643273568","name":"What is the difference between SCM, OM, and MM?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Supply Chain Management (SCM) involves managing the entire flow of goods and services, from raw materials procurement to delivering final products to customers. Operations Management (OM) oversees the day-to-day production processes within a company, focusing on the efficiency and effectiveness of operations. Materials Management (MM), on the other hand, specifically handles the sourcing, acquisition, storage, and allocation of materials required in the production process.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#faq-question-1688643367809","position":3,"url":"https:\/\/www.mrpeasy.com\/blog\/materials-management\/#faq-question-1688643367809","name":"Is materials management part of logistics?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Yes, materials management is a part of logistics as it involves the storage, control, and movement of materials within and from an organization, which are crucial aspects of the logistics process.","inLanguage":"en-US"},"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/posts\/6904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/comments?post=6904"}],"version-history":[{"count":21,"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/posts\/6904\/revisions"}],"predecessor-version":[{"id":20384,"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/posts\/6904\/revisions\/20384"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/media\/15045"}],"wp:attachment":[{"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/media?parent=6904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/categories?post=6904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mrpeasy.com\/blog\/wp-json\/wp\/v2\/tags?post=6904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}