Materials management is a core supply chain function and includes supply chain planning and supply chain execution capabilities. Specifically, materials management is the capability firms use to plan total material requirements. The material requirements are communicated to procurement and other functions for sourcing. Materials management is also responsible for determining the amount of material to be deployed at each stocking location across the supply chain, establishing material replenishment plans, determining inventory levels to hold for each type of inventory (raw material, WIP, finished goods), and communicating information regarding material needs throughout the extended supply chain.

The goal of materials management is to provide an unbroken chain of components for production to manufacture goods on time for customers. The materials department is charged with releasing materials to a supply base, ensuring that the materials are delivered on time to the company using the correct carrier. Materials is generally measured by accomplishing on time delivery to the customer, on time delivery from the supply base, attaining a freight, budget, inventory shrink management, and inventory accuracy. The materials department is also charged with the responsibility of managing new launches.

In some companies materials management is also charged with the procurement of materials by establishing and managing a supply base. In other companies the procurement and management of the supply base is the responsibility of a separate purchasing department. The purchasing department is then responsible for the purchased price variances from the supply base.

In large companies with multitudes of customer changes to the final product there may be a separate logistics department that is responsible for all new acquisition launches and customer changes. This logistics department ensures that the launch materials are procured for production and then transfers the responsibility to the plant materials management.

The major challenge that materials managers face is maintaining a consistent flow of materials for production. There are many factors that inhibit the accuracy of inventory which results in production shortages, premium freight, and often inventory adjustments. The major issues that all materials managers face are incorrect bills of materials, inaccurate cycle counts, unreported scrap, shipping errors, receiving errors, and production reporting errors. Materials managers have striven to determine how to manage these issues in the business sectors of manufacturing since the beginning of the industrial revolution.

Materials typically account for a large portion of a construction project's budget. Materials may account for more than 70% of a construction project's cost. Despite these statistics, when project budgets and efficiency are considered, labour and cost reduction are discussed. Materials management often gets overlooked, even though successful projects are a result of a successful blend of labour, materials and equipment management.  When materials are tracked efficiently project time can be optimized, costs can be saved and quality can be maximized.

There is a lack of efficient materials management in capital and investment construction projects, because each project is typically viewed as an individual effort, with each project needing a unique plan. The geographical location and technology needed for different projects will present distinctive challenges, but in general all projects will have elements that can be predicted from previous construction projects.

Typically, the more technically challenging a project is, the more difficult materials management becomes; however, the need for transparent materials tracking is highlighted in these types of projects.