Objective of material managment

Objectives of Material Management

It is quite obvious that every department objectives are those one set by the organization at the time of formation.But since every department has its own type of functions, their efficiency measurement is also different. Some department directly effects the company’s profitability, while the other are indirectly related in achieving the company’s goal. Among the directly related are Sales & Marketing department, material management, whereas Advertising &
Sales promotion activities are indirectly related. So in this way material management also has its own objectives. The Major objectives are

(a)Minimization of cost.

(b) Maximization of profit.

(C) Attainment of objectives of the enterprise.

To explain this we can part these objectives into two-

(1) Primary Objectives

(2) Secondary Objectives

Primary Objectives- These means the primary functions of the material manager i.e., close functions or activities that starts before placing the order for material. In other words all the calculation, study or analysis done for the material search. This starts from how economical the material can be procured? i.e. within the available sources the material manager has to calculate and analyse, from where
the material should be procured. So that the transportation cost, the tax & Excise benefits can be taken. After this the storage of the material is most important, because there are
few material which are sensitive to certain climatic condition.

Some may not be suitable to store for a longer duration. So proper arrangements has to be done for preventing from loss occurring through such nature.
Another primary activity is a bit part of management process. To say more clearly, proper & desciplined functioning is a part of management. So proper issue of material & its distribution must be done because unnecessary increase of extra material leads to an extra wastage or loss of
the material. For this proper accounting has to be done, all the requirements must be received in written format. The
material department must have the knowledge so as to analyse whether the demand made is excessive or not. This
proper functionery of department will lead to reduction in cost of production.
When all these basic objectives are formulated, the most important thing which the material management department has to analyse is how efficiently it can procure
maximum material within limited funds. This efficiency will lead to highest capital turnover ratio as well as the unnecessary blocking of funds will not be there.

Secondary Objectives- When all the analysis or economics related to fund, material, inventory & accounting is done, the major objectives are to be attained. This starts with searching new sources of supply. It is always possible that the material presently used can be made available cheaper from some other source and if not cheaper at least, can manage to get better quality products or material. While
making selection of raw material the management has some limitations or specification as regard to quality or grade of the product. Material manager has to comply with all such specification. While making or placing the order he has to co-ordinate with the other department so as to get the exact
specification or grade of material they require.

These primary and secondary objectives helps in attaining the major objective of the firm. Objective vary in nature & also in relative importance from one enterprise to
another. It is not like material people are always engaged in searching for better supply sources. Sometimes they have to compromise with the enterprise they are with. Suppose the company has to use raw material which is very scarce then the material manager instead of concentrating on low cost material will try to or put efforts in procuring the raw material. His prime objective will be to procure the material whenever & wherever they are available. In this way the objective may vary from enterprise to enterprise, but it is also true that material management fundamentally aim at reducing the cost of production & distribution so as to help the whole of an enterprise in achieving its objectives.