To improve industrial productivity it is essential to plan the material management function. Many businesses have installed material management system because it seems to be a new scientific management concept and managements have thought that all well managed businesses must have it.
They apt to have no goals or planned programmes to properly introduce, utilize and evaluate the function. An unfounded program without programmed goals will lead to frustration and disaster.
Material management function can succeed only through a planned approach to meet predefined and up dated objectives including higher productivity.
In planning out the material management function, it is necessary to know the nature of business, seasonal aspects, overall sales forecast, year-end inventory policy, availability of labor and equipment and other factors that influence the fulfillment of the forecast.
The compilation of data regarding these factors requires the full co-operative efforts of the people in various departments of the firm.
Successful planning of material management function is essential for :
(a) Preparation of operating budgets.
(b) Utilization of facilities-that is, plant, equipment and process including additions.
(c) Utilization of personnel including hiring, training and transfer.
(d) Availability of materials, parts and supplies including procurement storage and handling.