In today’s competitive business landscape, highlighting efficient materials management objectives is a critical step to be performed and achieved.
Materials Management Objectives- Primary & Secondary
Materials management aims to ensure the right quality and quantity of materials are available at the right time, in the right place, and at the right cost.
It’s a balancing act between meeting operational needs and minimizing costs.
Here’s a Breakdown of the Key Materials Management Objectives:
Primary Objectives:
- Ensure Material Availability: Prevent stockouts and production delays by having the necessary materials on hand when needed. This involves accurate forecasting, timely procurement, and efficient inventory management.
- Minimize Inventory Costs: Reduce holding costs associated with storage, obsolescence, and spoilage. This requires optimizing inventory levels, implementing just-in-time (JIT) strategies, and improving inventory turnover.
- Maintain Quality Standards: Ensure that all materials meet the required quality specifications to avoid defects, rework, and customer dissatisfaction. This involves establishing quality control procedures, working with reliable suppliers, and implementing proper inspection processes.
- Optimize Sourcing and Procurement: Obtain materials from the best possible sources in terms of cost, quality, and delivery. This involves developing strong supplier relationships, negotiating favourable contracts, and exploring alternative sourcing options.
- Efficient Logistics and Handling: Streamline the movement of materials throughout the supply chain, from receiving to production to distribution. This involves optimizing transportation routes, improving warehouse management, and minimizing material handling costs.
Secondary Objectives:
- Support Production Scheduling: Provide accurate information about material availability to facilitate efficient production planning and scheduling.
- Contribute to Product Design and Development: Collaborate with engineers and designers to select the most suitable materials for new products and optimize existing designs.
- Forecast Material Requirements: Accurately predict future material needs based on demand forecasts, production plans, and market trends.
- Make or Buy Decisions: Evaluate the cost-effectiveness of producing materials in-house versus purchasing them from external suppliers.
- Standardize Materials: Reduce material variety and complexity by standardizing components and materials whenever possible.
- Improve Sustainability: Minimize the environmental impact of material sourcing, handling, and disposal by implementing sustainable procurement practices and waste reduction initiatives.
Let’s talk about how to achieve the above Material Management Objectives and what Materials Management Competencies should be taken into consideration:
8 Materials Management Competencies
Capacity Planning
Capacity Planning determines the production capacity required by a supplier or a plant to meet forecasted customer demand. The capacity planner must calculate the maximum amount of work an organization can manufacture in a given time and adjust its utilization based on inputs from various processes, including OEE and S & OP.
Required Skills
You should possess a strong understanding of capacity planning principles and their impact on decision-making. You should also know how to effectively leverage supplier and market data to develop comprehensive capacity plans catering to manufacturing processes.
Moreover, you are a key contributor, actively creating detailed capacity plans across multiple business units and sites. Additionally, your ability to identify and address potential bottlenecks demonstrates a keen eye for operational efficiency. Your involvement in the S&OP process further highlights your strategic thinking and alignment with broader business objectives.
However, if you want to be a pro at capacity planning, you can go and get yourself enrolled in our course “Capacity Planning” by Kien Leong. This course helps you to align resources with demand, optimize production schedules, and drive operational efficiency.
Inventory Management and Optimization
Optimization and management of inventory is the ability to ensure product availability through inventory administration activities such as demand planning, stock optimization, and monitoring the age of the product. Inventory levels are set to meet customer service requirements with minimum inventory. This competency includes determining which products are managed in the distribution center and which are managed as non-stock build-to-order
Required Skills
You must possess a working knowledge of inventory tools and applications. Moreover, you must be skilled in directing the achievement of inventory performance metrics and ensuring adherence to established inventory policies. Optimizing and managing inventory is a very strategic objective of material management.
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However, learn about the Impact of Inventory Management on the Supply Chain, Optimizing Inventory Levels, and Stock Counting procedures by getting yourself enrolled in “Inventory Management Fundamentals For Supply Chain” course by Paul Denneman.
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Master Production Scheduling
This competency includes creating the overall production plan over a specified time horizon, which contains a list of part numbers, quantities, and due dates. It also includes evaluating the operation’s capacity, demand, and material availability to ensure an effective supply-demand balance.
Required Skills
Someone willing to understand material management in depth must work with cross-functional lines within the organization to meet customer requirements. However, one must have a working knowledge of capacity limitations to ensure the alignment of demand and capacity to meet customer delivery requirements.
Moreover, to understand the capacity of material management, it is essential to work with materials planning to ensure inventory availability and adherence to materials policies. Plus, one must oversee the creation of the business master schedule and understand the S&OP process.
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Materials Requirements Planning (MRP)
Materials Replenishment Planning is the knowledge of forecasting, demand planning, scheduling, and inventory management tools and concepts necessary to analyze the optimal placement and velocity of materials required in manufacturing and distribution.
This competency includes the ability to take the Master Production Schedule replenishment quantities and “explode” quantities through the bill of materials to create component requirements, which are compared against on-hand and on-order; purchasing or manufacturing orders are subsequently planned and either placed or deferred. This is a very well-known material management objective.
Required Skills
You must have a deep understanding of inventory management principles. To achieve this, you must be skilled in developing requirements for inventory management systems and know about trade-offs between inventory costs and manufacturing needs.
Moreover, you must be adept at developing demand forecasts based on replenishment needs and transportation costs. Additionally, you must apply Just-In-Time (JIT) material replenishment methodologies as appropriate.
“How MRP Works” by Kien Leong teaches the fundamentals of MRP, including its history, core calculations, and best practices, to effectively manage inventory and production in manufacturing environments.
Order Management
Order Management is the skills necessary to manage the receipt and scheduling of customer orders. Processes included in this competency include standard order receipt, exception identification, and exception resolution. Key to the success of this function are:
1) The ability to work effectively with customers to clarify requirements and negotiate solutions when constraints exist.
2) The ability to work effectively with other functions to assess the ability to meet customer needs and to develop work-around solutions when necessary.
Required Skills
You should understand this sector’s customer order procedure and every minor detail. However, you should possess a strong understanding of customer order procedures and their impact on key metrics.
Moreover, one should actively participate in developing and improving these procedures. With a solid grasp of ERP systems, you can effectively navigate the order management process and coordinate with relevant functions to resolve exceptions and ensure compliance with contractual obligations. Additionally, you should know capacity limitations and collaborate with Materials Planning to ensure inventory availability and meet customer delivery requirements.
Become A Material Management Expert
Shop Floor Execution
Shop Floor Execution is the skills necessary to effectively manage Materials procedures in the order fulfillment process within a plant. This competency includes Receiving, Putaway-to-stores, Picking, WIP, Scrap, Materials Hold transactions, Production Scheduling, Backflush, and Shipping. The skill set includes knowledge and understanding of these processes and their practical application.
Required Skills
You should demonstrate a strong understanding of Shop Floor Execution procedures and their impact on key performance metrics. Moreover, you are supposed to be capable of applying these procedures effectively and can identify areas for improvement. By participating in developing and refining these procedures, you contribute to the overall efficiency and effectiveness of shop floor operations.
“Production Scheduling” by Kien Leong teaches you the fundamentals of production scheduling, including capacity planning, demand forecasting, and optimization techniques to ensure efficient and timely production.
Demand Management
Demand planning involves using qualitative and quantitative methods to predict short-term incoming demand as an input into the S & OP process. The competency also includes using analytical techniques and software to generate baseline statistical forecasts.
Required Skills
Demand management is also a very beneficial objective of material management. Suppose an individual possesses a strong understanding of the factors influencing demand planning. In that case, they are adept at tracking and monitoring demand forecast accuracy, enabling them to effectively identify and address forecast errors.
Furthermore, they create detailed demand plans across various business units and sites, ensuring alignment with overall business objectives.
However, we have an ultimate guide for forecasting method through which you can get to know more and more about forecasting.
Supply Chain Continuity Planning
Competence in Supply Chain Continuity Planning requires a structured and synergetic process to optimize supply chain strategy, processes, human resources, technology, and knowledge. Supply Chain Continuity Planning ensures awareness, prevention controls, monitoring, evaluation, and remediation of supply chain risk, which safeguards against new uncertainties that may interrupt the supply chain and affect profitability.
Required Skills
Supply Chain Continuity Planning is one of the primary material management objectives. One willing to be part of this entire sector of material management should have a strong understanding of risk management principles and their application in supply chain contexts. Plus, they are supposed to be proficient in developing and implementing mitigation plans to address potential risks.
Additionally, they should possess a sound knowledge of supplier quality processes and leverage them to manage supply chain risks. However, they are adept at implementing continuity plans to minimize operational impact during supply chain disruptions. Utilizing available tools and processes ensures the resilience of the supply chain.
“Mastering Supply Chain Resilience: Understanding Economic Volatility and Transformation” by Veta Rozanova teaches you to supply chain resilience in handling supply chain disruptions such as economic crises, volatile economic environments, maturity, transformations, etc.
If you want to become a pro at supply chain management & want to learn everything in detail about material management competencies you need to go and get yourself enrolled right now! Unlock a lucrative career path, build resilient operations, and become a driving force in the success of your organization.
Competency Chart For Material Management Objectives
| Competency | Description | Required Skills | Desired Skills |
| Capacity Planning | Understanding of capacity planning principles and methods to optimize resource utilization. | Strong analytical skills, problem-solving abilities, and knowledge of statistical techniques. |
Experience with advanced capacity planning tools and software.
|
| Inventory Management and Optimization | Proficiency in inventory control techniques, demand forecasting, and supply chain optimization. | Knowledge of inventory management software, supply chain principles, and statistical analysis. |
Certification in supply chain management or logistics.
|
| Master Production Scheduling | Ability to develop and execute production schedules to meet demand and optimize resource allocation. | Strong planning and scheduling skills, knowledge of production processes, and ability to use production planning software. |
Experience with advanced production planning techniques, such as lean manufacturing and Six Sigma.
|
| Materials Requirements Planning (MRP) | Knowledge of MRP systems and their role in planning and scheduling production. | Proficiency in using MRP software, understanding of bills of materials and routings, and ability to analyze material requirements. |
Certification in supply chain management or production planning.
|
| Order Management | Understanding of order processing, fulfillment, and customer service. | Strong organizational skills, attention to detail, and ability to manage multiple tasks. |
Experience with order management software and knowledge of customer service best practices.
|
| Shop Floor Execution | Proficiency in executing production plans and managing shop floor operations. | Knowledge of shop floor control systems, lean manufacturing principles, and problem-solving skills. |
Certification in lean manufacturing or operations management.
|
| Demand Management | Ability to forecast demand accurately and align supply with demand. | Strong analytical skills, statistical modeling, and knowledge of forecasting techniques. |
Experience with demand planning software and supply chain planning.
|
| Supply Chain Continuity Planning | Understanding of supply chain risks and the development of contingency plans. | Knowledge of risk management principles, crisis management, and business continuity planning. |
Certification in supply chain risk management or business continuity planning.
|
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The Materials Management Competency Chart above can be applied to the materials management roles listed below.
Ultimately, effective materials management contributes to:
- Reduced Costs: Lower inventory holding costs, procurement costs, and logistics expenses.
- Improved Efficiency: Increased production output, reduced lead times, and optimized resource utilization.
- Enhanced Quality: Consistent product quality, reduced defects, and improved customer satisfaction.
- Increased Competitiveness: Greater agility, responsiveness, and ability to meet customer demands.
About the Author – Fatima Salman
Fatima Salman is a dynamic content writer and social media influencer with a knack for crafting compelling narratives that engage and inspire. Currently contributing her expertise at SCMDOJO, Fatima brings over five years of experience as a content writer and two years in media. Her passion for storytelling and strategic content creation has made her a key player in digital marketing.
Fatima earned her bachelor’s degree in Economics and Finance from the NED University of Engineering and Technology, where she cultivated a strong analytical foundation that complements her creative skills. Her versatile background allows her to seamlessly blend data-driven insights with captivating content to drive impactful results.
Beyond her professional endeavors, Fatima is a recognized social media influencer. She shares her unique perspectives and lifestyle inspirations with a growing online community.
