Materials in the form of raw materials and semi-finished goods are of great significance for the success of an enterprise. These can directly affect the efficiency of a system. It is observed that irrespective of the size of an enterprise, the expenditure on materials is a major item of the budget. In many cases material consumption varies from 25% to 75% of sales turnover. The expenditure made on materials is money invested in inventories cost of storage, transportation costs, insurance, wastage etc. Because of the magnitude of expenditures required in acquiring and controlling materials and their impact on profits, a great deal of attention is required towards the management of operations associated with materials. While managements have long been aware of the fact that manufacturing and marketing are the two main activities of an enterprise but of late there is a feeling for a third basic economic activity known as materials management. Like manufacturing and marketing in material management also, capital is employed and costs are incurred to produce something of economic value. Materials Management is a basic function of the business that adds value directly to the product and purchasing like plant engineering and advertising is a specialized staff activity that helps a value adder but does not really add any value to the product itself. Essentially, materials management is the process of uniting the activities involved in the acquisition and use of materials employed in the production of finished goods products. Materials Management is a basic function of the business that adds value directly to the product itself. Materials Management embraces all activities concerned with materials except those directly concerned with designing or manufacturing the product.