Inventory Management

Meaning and Definition

Materials are of pivotal importance in the manufacturing of a product. No production is possible without materials. Moreover, materials form an important part of the cost
of a commodity and therefore proper control over its procurement, issue, movement and use is necessary. So, proper and effective management of materials is the necessity of
the hour. Materials management may thus be referred to an activity having all control over the materials used and the commodities produced by the concern. In the words of
Bethel and others, “Materials Management is a term used to cannote controlling the kind, amount, location, movement and timing of the various commodities used in and produced by the industrial enterprise.” The materials management involve all activities relating to materials starting right from the time the need of materials arises and ending with its issuance to production. In this way, materials management is also concerned with all the activities of management such as planning, organising, directing, controlling and coordinating so far as they are related to the materials. According to one of early definitions, “Materials management is the
planning, directing, controlling and coordinating of all those
activities concerned with materials and inventory requirements, from the point of their inception to their introduction
into the manufacturing processes. It begins with determination of materials’ quality and quantity, and ends with its issuance to production in time to meet customers’ demands on schedule at the lowest cost.” resources – men, machines money and materials which are known as 4m’s are commanded by a manager.

These are the inputs of any business activity. From a given quantum of inputs a manager is expected to give required output. Regarding inputs, over men, machines and money
he has hardly any control. In the inflationary conditions the costs of these inputs will continue to rise. In India, management of materials is the only field in which considerable economics is possible.

Till the mid of century materials management was not a known subject. Today it is regarded as one of the most Important area of management.

Definition

Experts have given various definitions of materials Management. Following are some of them

1. According to R.R.Gokarn “Ii covers the whole range of functions involved in converting raw materials & ancillary supplies into finished products.

2. According to A.K. Dutta “Material management is an activity of an enterprise for the procurement essentially & use of material distinctly separated from the process of procurement & the use of human skills & labour for the ultimate deployment to attain some predetermined objectives.”

3. According to P. Gopal Krishnan “Material Management is the function responsible for the coordination of planning, sourcing, purchasing, moving, storing & controlling material in an optimum manner, so as to provide predecided services to the customer at a minimum cost.”

As we see, all the above definitions are having the entire functions of Management or are the ones inspired by them.

Management is a very vast field. Material management is just a part of it. The following definition of management can explain it very well-“Management is the process of utilising and exploit- ing opportunities available, through the resources for maximization of Profit by achieving a pre-determined objectives,

So Material Management can be defined as a process of making available the material at a competitive rates not necessarily lowest rate and in such a manner so as to maintain the level (Production), which helps the company in providing finished or end product to the customer/consumer at competitive price whereby increasing sales and resulting
in higher profitability,

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