How Material Management influence Project Performance

Importance of Material Management:

Material management is directly associated with the operational efficiency of an organization. A good material management system ensures the availability right materials in the production process with minimum wastage so as to cut losses. Here are the few ways which show the importance of material management and how it influences your project performance: –

Time

importance of material management

Time is widely recognized as a primary criterion for performance measurement. Poor material management can have a negative effect on project time, like the insufficient stock of materials, lead to idling time as workers try not to exhaust the stockpile or it is worsened by the work stoppage. Due to this shortage, materials need to be reordered and causes longer idling time. Consequently, the work progress will be delayed. Therefore, the availability of sufficient quantity of materials affects the projects time.
A proper material management system ensures that there is enough buffer stock so as to prevent any stoppage in production.

importance of material management

Cost

importance of material managementCost is one of the major consideration in the entire cycle of projects. Effective material management is able to reduce the overall cost of material. For example, in the purchasing process, discounts and bulk order may be economical as it reduced the transportation and ordering cost, thus, by minimizing the procurement cost of materials, the higher chances for reducing the overall project cost and concurrently increasing company profit.
However, the reasonable time needs to be considered so that the materials are not ordered too early or it may affect the company capital, interest charges, and storage charges. Wrong calculations can lead to over or under stocking which will be bad for the industry. A proper MM system helps in determining the number of materials to be ordered to reduce cost without any obstructions in production

Quality

importance of material management

The term quality has sometimes become a problem as it is a subjective matter and understood differently by different people and organizations. Therefore, it is important to be able to identify client’s requirements and specify clearly in the contract document.
Availability of resources such as materials and equipment as planned during project duration is one of the factors contributing to quality performance. The available equipment also needs to be in good condition and in sufficient quantity. Without the proper and sufficient equipment, quality of the project can be jeopardized. Similarly, the materials itself also needs to be inappropriate quality according to the specification. In sum, the available resources must be in accordance with the specification, sufficient quantity and functional. The material management system can be used to ensure all this hence getting a satisfactory quality in production.

importance of material management

Productivity

importance of material management

The productivity is measured in terms of unit completely accomplished during given period and the related costs in terms of man-hours or money.After analysis in different industries, a research organization reported that the lack of materials is a primary factor

that had a moderate to strong effect on productivity. More importantly, it has been accumulated that disruptions in material management resulted in a loss of labor productivity as well.
Material storage also had a significant impact on labor productivity. For example, inappropriate storage location increases unproductive inputs. This occurs as the workers need longer time and effort to retrieve materials. Due to this, wasting of workers’ energy occurs and they may end up physically fatigued.
With appropriate site storage, workers energy can be productively used to perform the task in progress. This situation is also similar to the efficient site layout for material movement. Efficient movement of materials increases productivity whilst reduces material travel time. Besides, the availability of material and equipment motivates workers to improve work productivity.

Waste

importance of material management

Waste refers to any material that needs to be moved out from the site due to damage, non-use or cannot be used due to non-compliance with specification and surplus or debris by-product of the production process. In simple words, waste is a product or material that is unwanted and required to transported out. Inappropriate material storage contributes to waste generation.
Strategies for waste minimization are the stock control for minimization of over or duplicate ordering, good practices of material handling, systematic inventory process and proper material storage. Hence, the efficient material management practice throughout entire process will minimize the waste generation.

Now you know the importance of material management and various advantages of material management as well. Look at Spectrum ERP’s Material Management module for more information

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