Final answer:
Materials management deals with the procurement and handling of materials within an organization, focusing on maintaining the necessary inputs for production. Physical distribution, however, concerns itself with the logistics of transporting finished products to consumers or retailers. The main distinction is their placement in the supply chain; materials management is upstream, physical distribution is downstream.
Step-by-step explanation:
Difference Between Materials Management and Physical Distribution
Materials management and physical distribution are both part of the larger field of supply chain management, which plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements.
Materials management is focused on the procurement, handling, storage, and inventory control of materials used within the organization. It ensures that the right materials are available for production at the right time and in the necessary quantities, minimizing waste and cost. As an example, in the manufacture of computers, it involves the management of components such as plastic parts and wiring, which, although they may have a relatively small cost compared to the technological ideas that drive the product, are crucial to the assembly and function of the computer.
On the other hand, physical distribution deals with the logistics of transporting final products from the end of the production line to the consumer or retailer. It includes functions such as order processing, warehousing, transportation, and customer service. It's focused on delivering the finished product in the most efficient and cost-effective way.
The main difference between the two is their placement in the supply chain; materials management is upstream, dealing with raw materials and components, whereas physical distribution is downstream, dealing with the finished product.