What is materials management? Effective materials management methods

Materials management plays an important role in ensuring stability and efficiency in the production and supply of goods of a business. In this article, let's learn with 1C Vietnam what material management is as well as popular material management methods today.

1. What is materials management?

Materials management is the process of planning, organizing, directing and controlling the quantity of materials and goods in an enterprise. The purpose of this process is to ensure the continuity, availability and ability to supply goods and materials in a timely manner when needed, thereby contributing to cost reduction and ensuring facility utilization. effective material.

2. Difficulties in managing materials in businesses

Managing materials in a business is not always easy. Below are the difficulties that businesses may encounter from warehouse arrangement to quantity control and information storage:

• Difficult to accurately update inventory quantity: For large businesses, updating inventory quantity becomes complicated. At that time, it is difficult for businesses to verify the actual quantity based only on paper reports, causing difficulties in continuously updating inventory data.
• Difficulty in arranging goods: Arranging goods is an important part of materials management. However, the increasing volume of goods, diverse in types and designs, makes this activity of businesses more difficult.
• Difficulty in checking goods: Regularly checking the quality and quantity of goods in the warehouse is a time-consuming process. This work often has to be done manually, resulting in a waste of time and effort for warehouse staff. Reconciling the quantity of goods in the report with reality is also a challenge for warehouse management.

3. Effective materials management methods for businesses

Effective materials management is an important factor in business success. By optimizing material management and control processes, businesses can reduce waste, increase efficiency and quickly respond to production needs. Below are some materials management methods that businesses can apply:

3.1 Use materials management software

Using material management software is becoming an optimal choice for businesses today. Instead of using manual methods, applying modern software helps ensure accuracy and reliability in statistical data. The software provides intelligent processing capabilities and always updates real-time data to quickly respond to requirements and changes in the business environment.

3.2 Arrange goods in the warehouse optimally

One of the problems that small and medium-sized businesses often encounter is complex warehouse management with limited space. At that time, optimally arranging the warehouse is an important job to minimize errors. Businesses can use shelves, arranged by product code, to help create logical connections, avoiding affecting product quality. This method ensures efficient inspection and release of goods.

3.3 Manage materials through Excel tool

Managing materials using an Excel table is an effective method and brings many benefits to small businesses and business households with small quantities of goods. To effectively manage warehouses with Excel, businesses need to master the following knowledge:

• Organize Excel files systematically and in accordance with business items to store information accurately and quickly.
• Knowledge of Excel to troubleshoot errors during operation.
• Input operations, daily statistics, file processing, Excel table formatting and design.
• Proficiency in basic functions in Excel helps manage warehouses effectively.

3.4 Manage material warehouse with FIFO and LIFO methods

FIFO (first in, first out) and LIFO (last in, first out) are two common terms in materials management, especially for goods managers. Enterprises can apply these two methods to manage material warehouses for each specific case as follows:

• FIFO applies to products with a short shelf life such as food or trending products. Businesses need to have a reasonable method of arranging goods to easily import and export goods.
• LIFO applies the opposite, giving priority to new goods, allowing the use of newly imported items first.

3.5 Periodically inventory supplies

To manage materials, businesses need to regularly check goods to avoid errors and discrepancies in reporting. Periodic inspection helps ensure the quality of goods, while also ensuring timely circulation of goods, avoiding damage or expiration.

Thus, materials management plays a very important role in production and goods trading activities. Hopefully, with the above suggestions on how to manage materials, businesses will apply and deploy a form that suits their requirements. In addition, if you need advice on modern software solutions for materials management, please contact 1C Vietnam immediately!