Objectives of Materials Management:
1. Low prices: Obtaining the least possible price for purchased materials is the most obvious purchasing objectives and certainly one of the most important. If the purchasing department reduces the prices of the items it buys operating costs are reduced and profits are enhanced.
2. High Inventory Turnover: When inventories are low in relation to sales less capital is tied up in inventories. This in turn increases the efficiency with which the company capital is utilized so that return on investments is higher.
3. Low cost Acquisition and Possession: If materials are handled and stored efficiently their real cost is lower. Acquisition and possession costs are low when the receiving and stores departments operate efficiently.
4. Continuity of Supply : When there are disruptions in the continuity of supply excess costs are inevitable. Production costs go up excess expediting and transportation costs are likely and so on. Continuity of supply is particularly important for highly automated processes where costs are rigid and must be incurred even when production stops because of unavailability of materials.
5. Consistency of Quality: As pointed out earlier quality of the end product depends on materials that go into it when materials purchases are homogeneous and in primitive stage( e, g, sand and gravel) quality is rarely a problem for purchases personnel.
6. Low Payroll Costs :The objective of low payroll costs is common to every organization. The lower the payroll the higher the profits all other factors being equal. But because no department can do its job without a payroll the objective of low payroll must be viewed in its proper perspective.
7. Favourable Supplier Relationship :Maintaining cordial relations with suppliers benefits the buying company in more than one way. In the first place a company with good reputation in supplier relations is more likely to attract customers than the one with a bad name. Secondly the product development and research efforts of suppliers are passed on the company provided the latter maintains good relations with the former.
8. Development of Personnel: If you want to plan for year plant corn. If you want to plan for 30 years plant a tree. But if you want to plan to for 100 years plant men. So goes a Chinese proverb. Every head of every department should understand this saying and take personnel interest in developing the personnel working under him.
9. Good Records: Good records are considered a primary objective of materials management: particularly in the procurement phase of the materials management. Buyers spend company money and can be subjected to tremendous temptation. Although perhaps 99% of all buyers are above corruption, the opportunity does exist. Good recurs along with well planned administrative controls and periodic audits can discourage corruption.