How is Inventory Management Different from Materials Management?

Jonny Parker
October 27, 2023

Is there really a difference between the two concepts? The short answer is yes, there is. Although the two are closely related and often intersect, material management is more concerned with sourcing, purchasing, storing, and controlling the flow of materials used in a company’s manufacturing or service delivery processes.

On the other hand, inventory management mainly focuses on controlling and monitoring the inventory levels, locations, and movement of all finished goods, work-in-progress materials, raw materials, machinery, and equipment used by an organization in its operations.

Whereas material management concerns itself with the larger scope of materials used by a construction firm, inventory management tends to be more specific and is targeted at achieving optimal stock levels and a smooth flow of goods within the organization.

Both practices are critical in ensuring that a business remains efficient and cost-effective and can often benefit from construction material management software or inventory management software.

What is inventory management?

Inventory management is concerned with a company’s inventory—particularly ordering, storing, utilizing, and selling it. Inventory management also intersects with material management in that it covers managing raw materials, production components, and finished goods.

Among the main functions of inventory management are:

  • Defining optimal inventory levels
  • Settin