What is the procurement of finished goods

Materials management

Materials management includes all activities for supplying the company or the production process with input factors for the periodically recurring demand. A distinction is made between classic and integrated materials management. Classic materials management only deals with purchasing in the sense of legal availability and procurement logistics as storage and (external) transport of the procurement objects. In-house logistics (production logistics) are also included in the range of tasks of integrated materials management.

The task of materials management is to provide the materials required for the production process on time in terms of type, quantity and quality. The market forces materials management to work more and more cost-effectively by reducing stocks. The integrated materials management enables all materials management activities to be coordinated with one another. Materials management and logistics are by no means to be separated from one another. Materials management is and will remain the focus of logistics, with the logistical functions being more extensive than those of materials management. For example, the supply of spare parts is included in the logistic functions.

The tasks of materials management result from the link between procurement and storage. If the tasks of procurement and storage are added to the tasks of moving, provision, distribution and disposal, this is referred to as integrated materials management. This integrated materials management can be described as a subsystem of logistics. According to Grochla, economic and technical subtasks are to be viewed as a uniform overall task of materials management.

See also: active materials management, integrated materials management

(English. Materials management, materials logistics) The materials management comprises the entirety of the material-related tasks that deal with the supply of the. Operation and the control of the material flow through production to delivery to the customer. It is controversial whether the delivery of finished products to customers is part of materials management. The starting point of the consideration is the production factor material, which includes raw, auxiliary and operating materials as well as vendor parts, semi-finished products as well as merchandise and disposal goods (and thus basically no finished products). The main tasks of materials management consist of procurement, warehousing, provision as well as the utilization of residues and disposal (recycling): Procurement can be divided into the determination of the qualitative, quantitative and time-related material requirements (procurement disposition) and the purchase of externally procured objects with partial tasks such as procurement market research, searching for potential suppliers, issuing inquiries, evaluating offers, negotiating prices, placing orders and monitoring contract fulfillment over time. Warehousing includes planning the scope and facilities of the warehouse, warehouse management (recording and monitoring of material movements, organization of the warehouse) and the physical execution of warehouse processes (goods receipt, quality inspection, storage and retrieval, storage, maintenance of the stored material). The sub-tasks of provision (provision planning) consist of handling, order picking, transshipment and, above all, internal transport with the aim of making the required material available at the right place at the right time and at the lowest possible cost. In addition, the material requirements determination, otherwise part of the procurement, can also be assigned to the provision planning. The recycling and disposal of residues includes not only the removal of the material that is no longer required and the other production residues, but also represents a starting point for environmentally-oriented corporate management (environmental audit). If a corporate goal is to dispose of as few residues as possible and used materials as unchanged and as possible to be returned to the economic cycle in the same function (recycling), this must already be taken into account during product development (use of recyclable materials, modular, dismantling-friendly product structure) and the planning of the production processes. An essential goal of materials management is the permanent supply of the required material in the right quantity and quality at the right time in the right place at optimal costs. Aspects of short and long-term security of supply (delivery reliability and long-term quality capability of suppliers, traffic disruptions, range of raw materials) and various cost components must be taken into account. In addition to the procurement volume (material quantities valued with prices), internal and external transport costs, storage and capital tie-up costs as well as the costs of picking, recycling and disposal processes, as well as the costs of managing materials management and information systems. From the fact that the share of the mentioned cost components in the total costs in many. Industry is significantly larger than 50%, the strategic importance of materials management for many companies becomes clear. The content overlaps with production planning and control (e.g. with regard to the aspects of determining requirements) and, above all, with logistics, which is a cross-sectional function that is responsible for coordinating the flow of materials and information. A distinction with regard to the tasks of materials management and logistics is often made in such a way that purchasing is assigned to materials management, but not to logistics, and the distribution of finished products to logistics, but not to materials management.

Materials management includes all corporate policy measures associated with the management of materials. In contrast to the traditionally functional approach in business administration, the object reference is placed in the foreground in materials management; d. H. the individual application factors (input factors) become the crystallization core of theoretical analyzes, training areas or practical-organizational design measures. The functional view is subordinate to the object orientation; The task of factor management extends to all decision-making problems relating to the respective factor, regardless of the operational sub-area in which they occur. The following three dimensions should serve to identify more precisely the content of the term, the tasks and the scope of the object: object area, sub-functions, management phases.
(1) Object area of ​​materials management
In order to provide services, companies (organizations) need a wide variety of production factors, which under pragmatic aspects are in
Material goods (materials in the broad sense)
Legal title
Personnel (work or services)
Money (nominal goods)
can be subdivided. Only the material goods are materially bound. The subject area of ​​materials management are raw materials, auxiliary materials and supplies, vendor parts, semi-finished products and finished goods (»resale«); In a narrower definition, it is the input materials (types of material) intended for the various places of consumption in production. Fixed assets are usually not included in the scope of materials management.
(2) Sub-functions of materials management Material management decision problems occur in all performance management functional areas of a company, both in procurement, production and sales. In all of these sub-areas, problems of material supply or procurement and material use arise; these are completed by storage and transport tasks (stock keeping and material movements; material flow). However, science and practice see the tasks of materials management primarily in the sub-functions of procurement and production. Aspects of material movement, i.e. transport, have recently been discussed under the heading of logistics. (Logistics, business administration).
(3) Management phases of materials management From the point of view of formal logic, the sub-tasks of factor management in materials management can be subdivided into the processes of planning, implementation and control. The planning of the materials management includes the definition of material management action goals and the development of suitable strategic and / or tactical measures for the realization of these goals. The following are important planning areas:
Planning of material & «£ ar / i (planning of material range; requirement quantity planning);
Planning of material procurement (planning of the optimal order quantity; planning of the procurement process);
Planning of the »stock keeping (stock planning; planning of stock keeping).
The planning results are realized in the realization phase. - Finally, the control has the task of determining the actual values ​​of material management processes and comparing them with the planning data. This target / actual comparison is followed by a deviation analysis. The control information acts as feedback information on the planning processes. According to the planning areas differentiated above, a control of the material requirements; the procurement of materials and stocks are discussed.
The considerations on the term and field of tasks of materials management are to be summarized with the following scheme.

includes all activities of organizations that are focused on the management of real material assets. The demarcation is based on the materially bound production factors that are required for the provision of services. The object orientation supplements or superimposes the functional perspective in business administration. The importance in organizations is expressed in the proportion of material costs in the cost of the provision of services or in sales. Raw material-related refining (e.g. petroleum refineries) and industrial manufacturing companies with a mechanical-synthetic structure (e.g. automobile factories) represent a significant proportion of material costs. In the automotive industry, material costs devour approx. 50% of the proceeds. In pure service companies, the material costs are insignificant, while in trading companies they can reach between 80% and 95%. As a result, the cost of goods is the key success factor in institutional retail. It is not practical and customary to assign all real material goods to the object area of ​​materials management. Fixed assets (operating resources) are regularly excluded; these represent decision-making objects in investment policy. Materials are the materials, that is, the consumables in production (raw, auxiliary and operating materials), as well as the built-in parts in different processing states. These can be vendor parts, semi-finished products and finished goods that are resold unprocessed (commercial goods, "sale"). Usually, the consideration is limited to input materials and wear tools for the various places of consumption in the manufacturing process of industrial companies. The task of materials management to ensure the supply and disposal of manufacturing companies has a real, technical and a formal, economic side. The real, technical task serves to realize a complex objective function: The materials required for the provision of the service should be made available in the required quantity, in sufficient quality, at the right time and at the right place of consumption, the waste materials should be appropriately recycled (recycling). The following material management sub-functions, which often also serve as reference points in the formation of departments, can be distinguished: • Determination of material requirements, • Control of incoming materials (incoming goods inspection), • Material provision at the place of use, • Disposal of places of use (waste management), • Recycling of waste . The task of transport between the individual storage and consumption locations belongs to the field of logistics. From a formal, economic point of view, materials management should ensure the optimization of material management costs. Material management decisions trigger various cost effects. The stocking of materials to ensure the supply or readiness for delivery requires a capital commitment and thus causes interest costs. A reduction in material stocks, on the other hand, creates the risk of production interruptions or delivery bottlenecks and causes corresponding downtime or failure costs. Important cost types in materials management are, for example, interest, transport, testing, storage, risk and administration costs. The so-called material management optimum is determined by decisions in the following sub-areas: • material quantity, • material assortment, • bridging space, • bridging time, • capital costs. The material management has to solve planning, implementation and control tasks. Planning includes the definition of material management goals, the development of strategic / tactical action programs and the definition of a suitable structure. This also includes the design of a high-performance information system. Planning and implementation processes are supplemented or overlaid by process controls. In the sense of feedback information, these influence the planning and decision-making processes. Literature: Baily, P./Famer, D., Purchasing-Principles and Management, 6th ed., London 1990. Dobler, DWILee, L. JrJBurt, DN, Purchasing and Materials Management, 4th ed., New York et al 1984. Grochla, E., Fundamentals of Materials Management, 3rd edition, Wiesbaden 1978.

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