IntroductionLogistics today is understood as a managerial approach that systematically and integrally considers all activities directly or indirectly related to the physical, financial, and information flows of organizations. In short, logistics went through a fragmentation of its activities until it underwent a process of total integration of its functions, as can be seen in the figure below. [3]Thus, it is clear that logistics can be divided into areas, and one of them is materials management.Materials ManagementMaterials management deals with the flow of products (raw materials) from outside into the company (materials supply), which includes supply sources and whose objectives are to provide the right material, at the right place of operation, at the right time, and in usable condition at the lowest cost. [2] This area is widely known as inventory management, but it goes beyond that: it is also warehouse management, inventory, shelving, racks.It can be studied from the perspective of three equally important areas: [1]- Purchasing management area: its main objective is to ensure the supply of goods and services necessary for production and the company’s other activities.- Inventory management area: its main objective is to guarantee the supply of materials necessary for the company’s operation, avoiding shortages or occasional stoppages.- Distribution center management area: its main objective is to store and supply the material acquired by purchasing management and planned by inventory management. Thus, it takes custody of the material and fulfills requests from the users of these materials*.The table below illustrates each area and its duties.ManagementDutiesStrategyInventoryExamine inventories to see the need for replenishment;Indicates the quantities to be replenished and the delivery times.Adjust inventory levels to the needs of users of the various materials, at the lowest possible cost, without compromising the expected service level to meet users’ requirementsPurchasingConducts bidding processes;Decides on acquisitions;Negotiates supply conditions;Closes contracts with suppliers;etc...Meet the inventory replenishment needs planned by inventory management, according to the quantities and deadlines established by itDistribution centerPerforms the physical control of materials;Receives materials;Stores materials;Supplies materials;etc...Physical control of stored materialsIt is clear that the three areas are interconnected. In management terms, we can summarize the Distribution Center as materials coordination, Inventory as planning, and Purchasing deals with negotiation and control.Many confuse purchasing as if it belonged to the financial area. In this case, whoever pays the bills (accounts payable or receivable) is financial management, but the act of buying is handled by materials management.Responsibilities and duties of materials management:- Supply the company through Purchasing with all the materials necessary for its operation;- Evaluate other companies as possible suppliers;- Supervise the companies’ warehouses;- Control inventories;- Establish an appropriate storage system;- Coordinate inventory counts;- ....Its MAIN objective is to maximize the use of the company’s resources. In other words, to avoid waste, which can take many possible forms: excess inventory, acquisition of unnecessary or low-quality materials, etc.Its functions:- Material categorization;- Purchasing;- Warehouse;- Inventory control.> A well-structured materials management system enables the achievement of competitive advantages through cost reduction, reduced investments in inventory, improvements in purchasing conditions through negotiations with suppliers, and customer and consumer satisfaction regarding the products offered by the company. [1]Interface with other areasMaterials management has a strong interface with various sectors of the company, such as:- The financial area, considering the need for funding to acquire the various materials that will be necessary for the production of goods and services. Production itself is responsible for providing forecasts of the use of the various inputs, raw materials, and components needed to manufacture the products offered by the company.- The sales area, because it represents this key element in defining the production volume of the products and, consequently, establishing its correspondence regarding the supply of the various items (inputs, raw materials, components, etc.) that make up the range of products offered by the company to the consumer market.- The human resources area, due to the need to supply the materials management area with personnel duly qualified and trained to perform the function.- The distribution logistics area, aiming to coordinate optimized processes for the supply of finished products, according to the needs and expectations of customers and consumers.- The information technology area as a very important element of support and maintenance of the records and information necessary for the various departments of the company, involving the various stages of the flow of goods supply, both for production and for supplying the consumer market.How to optimize inventory management- Demand forecasting techniques: allow better inventory alignment;- Reduction of replenishment times (lead time): as we will see later, safety stock depends on replenishment time. The shorter the time, the smaller the inventory.- Just-in-time (JIT) deliveries: involves synchronizing the flow of operations according to product demand.How to optimize purchasing management- Supplier registration: preparing a supplier database through a careful study of their supply capabilities is a key factor in ensuring scheduled deliveries and allowing flexibility in supply operations.- Negotiation: directly impacts cost reduction;- Long-term global contracts: the idea here is simple, turn your suppliers into business partners. The existence of long-term contracts, such as three to five years, with special clauses, will result in greater security for the supplier in the flow of materials consumed by the contracting company.How to optimize distribution center management- Distribution center location: a way to reduce ordering and transportation costs.- Physical layout: software such as Arena [2] supports a well-designed layout, allowing a fast process of storage, retrieval, and dispatch of materials, with no conflict between employees’ routes.- Handling and transportation equipment: using the appropriate equipment is essential to reduce costs within the company.ExerciseIn a survey conducted in several companies, the names given to positions related to logistics were recorded, as can be seen in the table below. Subsequently, each employee was asked which functions these positions should perform. As a task, try to match the positions with their respective functions. [3]References[1] GONÇALVES, Paulo. Materials Management. Elsevier Brazil, 2017[2] http://www.ensinoeinformacao.com/simulao-com-arena[3] PLATT, Allan Augusto; CURY, Ricardo Martins. Panorama of Logistics in the Industry of Greater Florianópolis. Administration Review, no. 1, 2010.
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