What is integrated material management?
For running any industry or business, we need a number of resources. These resourcesare popularly known as 5 M's of any Industrial activity i.e.MenMachinesMaterialsMoneyManagement.All these resources which are basic inputs, are important but their relative importancedepends upon the particular type of industry and also other environmental factors.Earlier, when many modern machines were not even known, whole activity wasaround men.But now the importance has shifted from men to machines and in the presentenvironment materials are the life blood of any industry or business and for theirproper running, materials should be available at proper time in proper quantity atproper place.Traditionally, various activities related to managing materials were looked after byvarious departments. While purchases were generally arranged by top managementwith the assistance of a Purchase Agent or Purchase Officer, store keeping and stockcontrol was the responsibility of the production head with the assistance of a storekeeper or Stores Officer. Apart from these two main activities, distribution ofmaterials (mostly finished goods) was the responsibility of marketing.After realizing the profitability potential of Materials Management function, whenattempts were made to exploit this potential, it was realized that there were manyproblems in achieving the objectives due to inherent conflicts amongst variousdepartmental objectives. When a purchasing personnel wants to purchase in bulk toget price discounts, inventory of the stores personnel becomes high. Similarly desireof marketing personnel to have adequate stocks of finished goods in order not to looseany opportunity of sale resorts in high inventory.In the traditional set up one person could not be held responsible for all the functionsof materials management to achieve overall economy. Therefore necessity of placingall the functions related to materials management e.g. purchasing, stocking, inventorycontrol and distribution under one department headed by an executive of status at parwith other departmental heads, was felt.Thus evolved the concept of integrated materials management which can be defined asthe function which is responsible for the coordination of planning, selecting sources,purchasing, moving, storing and controlling materials in an optimum manner so as toprovide a pre-decided service to the customer at a minimum cost.
