Materials Management of Anglo French Textiles in Pondicherry

Material management contributes a major part and plays an important role in cost accountancy, which mainly aims at the maximization of profit by reducing the cost on overheads. Material management is the integrated functioning of purchasing and allied activities so as to achieve the maximum co-ordinations and optimum expenditure in the area of materials.Of the three main spheres of production process namely – material, labour and expenses, material management is given a considerate importance, as the importance of materials management can be realized when it is said that purchases accounts for nearly 50% of an organization’s annual expenditure; that nearly 80% of the working capita is tied up in the inventory and the inventory carrying cost is almost 25% a year; that materials represent 40 to 60% of the sale price as 60 to 80% of the production cost of a product and that even a saving of 5% in material cost will substantially increase the profit margin of and enterprise.

Objectives of Materials Management

The main objectives of materials management are as follows

1. Procurement of materials at low prices.
2. Ensuring high rate of inventory turnover.
3. To ensure continuity of supply.
4. To maintain the consistency of quality.
5. To minimize the acquisition and storing cost.
6. Lower administration cost.
7. Maintenance of supplier relations.
8. Development of new materials and sources.
9. efficient report keeping and prompt reporting
10. Development of personnel.

Source : articlesbase