Question

Defination of integrated material management and its advantages

Answer 1

Materials Management as a function is responsible for the co-ordination of planning, Sourcing, Purchasing; Moving; Storing and Controlling materials in an optimum manner so as to provide a pre-decided service to the customer at a minimum cost.

If the above functions of Materials Management are separately handled a conflict of interests occurs and there is a need to balance the conflicting objective from a total organisation point of view so as to achieve optimum results for the organisation.

The organisation which are following integrated Materi­als Management concept require the services of professional managers so that they can fulfill the requirements of an integrated materials management functions which demand an ability to bring together conflicting and yet inter-related functions.

Better Accountability 
Through centralization of authority and responsibility for all aspects of materials function, a clear cut accountability is established. Various user departments can direct their problems with regard to materials to one central point so that the action can be taken immediately. This helps in evaluating the performance of materials management in an objective manner. 
Better Coordination 
When a central materials manager is responsible for all functions, the departments under the materials manager create an identity which is common. This results in better support and cooperation in the accomplishment of the materials function. The user departments also find that they have to approach one department for discussing and solving their materials problems. This creates an atmosphere of trust and generally, better relations between the user departments and the materials management department. 
Better Performance 
As all the inter-related functions are integrated organizationally, greater speed and accuracy results in communication. Need for materials is promptly brought to the notice by materials planning. Purchase department is fed with stock levels and order status by stores and inventory control departments. All this calls for judicious decisions leading to lower costs, better inventory turnover, reduced stock-outs, reduced lead times and a general reduction in paper work. 
Adaptability to EDP 
The centralization of the materials function has made it possible to design data processing systems. All information with regard to materials function is centralized under the integrated materials management function. This has facilitated the collection, collation and analysis of data, leading to better decisions. Advanced and efficient electronic data processing (EDP) systems can be economically introduced under an integrated set up. 
Miscellaneous Advantages 
Under a central materials manager, a team spirit is inculcated. This results in better morale and cooperation. The opportunities for growth and development are better in an integrated set up. An individual under such a set up is not confined to any one function alone, and he gets, over a period, exposed to broader aspects of the materials function.