What Are the Best Tips for Materials Management?

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  • Written By: Osmand Vitez
  • Edited By: PJP Schroeder
  • Last Modified Date: 08 October 2019
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Materials management is a process companies use to ensure they have enough inventory to properly meet consumer demand. Several steps are often in this process, from actual operational management to accounting activities, to manage the financial side of the process. Best tips for materials management include selecting quality suppliers, establishing proper order processes, and implementing an accounting inventory system. Companies must also create employee positions to handle the tasks associated with this process. These items put together often create a strong yet workable materials management system.

A large part of materials management is having vendors that can fill a company’s need for supplies. Inadequate resources can be a difficult situation for a company to overcome. Suppliers must have the ability to fill a company’s orders whenever the business places one. Multiple suppliers can create alterations in quantity supplied and the quality of materials. Both of these situations can make it difficult for a company to meet consumer demand and compete effectively with other businesses.


Proper order processes are another step in establishing an effective materials management process in a business. Companies must have an idea of the current amount of materials on hand at all times. Other pieces to the puzzle include safety stock figures and the amount of materials turnover that a company has in normal operations. Safety stock is the level of inventory needed to meet demand while placing materials reorders to increase stock levels. Turnover dictates how many times a company sells through its materials inventory, meaning a company must have enough inventory on hand to meet this demand.

Accounting inventory systems handle the financial aspects of materials management. Companies should implement either a perpetual or periodic materials management system. A perpetual inventory system tracks each movement of inventory items, such as each purchase, sale, or adjustment to these figures. A periodic system has fewer requirements than the perpetual method. Accountants simply update inventory financial figures at month end so a company has an idea of the amount purchased and sold for the period.

A disadvantage of materials management is that it is often a labor-intensive task in most businesses. The demands for properly managing this activity often require both managers and employees to work associated activities. Companies often need to assess materials management operations and determine if properly running the activities will involve current staff or increase the need for employees. Hiring and training staff is typically necessary to ensure all management aspects are taken care of in this process.


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