Material management is no longer a back-office function—it’s a strategic powerhouse that can make or break your operations. Whether you’re in manufacturing, wholesale, or a hybrid eCommerce operation, how you handle raw materials, components, and finished goods determines your bottom line.
In this post, we’ll break down modern material management, look at what’s trending in 2025, and show how smart inventory tools like Megaventory are redefining efficiency.
📚 What Is Material Management?
Material management is the end-to-end process of planning, sourcing, purchasing, storing, and moving materials across a supply chain. It covers:
- Procurement of raw materials
- Inventory control
- Storage and warehousing
- Internal material movement
- Demand forecasting
- Waste minimization
Done right, material management prevents stockouts, cuts down holding costs, and ensures you deliver on time—every time.
Why Material Management Matters in 2025
Material management is no longer just an operational necessity—it’s a key driver of strategic advantage in 2025. With global supply chains facing constant disruptions due to geopolitical instability, climate change, and evolving consumer expectations, businesses must be proactive rather than reactive. A well-structured material management system ensures that companies stay agile, reduce costs, and maintain high service levels.
Inefficient material often leads to overstocking, stockouts, production delays, and bloated budgets. These issues are especially critical for manufacturers and wholesalers who operate on tight margins and depend on accurate materials flow to meet customer demands. In 2025, real-time visibility, automation, and data integration are the core capabilities businesses need to succeed.
Moreover, sustainability is influencing material choices more than ever. Firms are being pushed to account for every material’s origin and environmental impact. Regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) mean poor material traceability can lead to compliance issues and reputational risk.
Consider these stats for 2025:
| Metric | 2025 Forecast/Stat | Source |
|---|---|---|
| Global supply chain disruptions | 3.5x more frequent than in 2019 | McKinsey |
| Avg.. inventory holding cost | 25-30% of inventory value | Deloitte |
| % of firms using material planning software | 68% | Gartner |
| Savings from optimized material flows | 20-40% in procurement & storage costs | Capgemini |
Supply chain agility depends on real-time data, collaboration across departments, and smarter tools. If your material management is still spreadsheet-based, you’re not just behind—you’re losing money.
🔥 2025 Trends in Material Management
1. AI-Driven Demand Forecasting
AI tools are now able to integrate external variables like weather, geopolitical trends, and social media sentiment to predict material needs.
Example: An outdoor gear brand adjusts its material orders based on live weather forecasts and Instagram trends, reducing waste by 32%.
2. Sustainable Material Sourcing
With ESG pressures rising, businesses are prioritizing low-impact materials, local suppliers, and end-to-end traceability.
3. Cloud-Based Material Management Software
On-premise ERPs are giving way to flexible cloud platforms that integrate procurement, production, and inventory control in real time.
4. IoT & RFID for Real-Time Tracking
Smart shelves, RFID scanners, and digital twins allow you to see material movement at a granular level.
5. Decentralized Warehousing
With shipping delays still affecting global logistics, businesses are storing materials closer to production points to reduce lead times.
Material Requirements Planning (MRP) vs. Material Management
While closely related, Material Requirements Planning (MRP) and material management are not the same. MRP is a sub-function focused on calculating the materials needed for production, based on forecasts and existing inventory. Material management, on the other hand, covers the broader scope of procurement, warehousing, internal transfers, and inventory optimization.
In 2025, many businesses are combining both systems under one platform to improve visibility and reduce lag between planning and execution. Using tools like Megaventory that integrate MRP capabilities into material management workflows ensures smoother production and fewer delays.
How Warehouse Layout Impacts Material Flow
Material management doesn’t stop with purchasing—it extends into how materials move and are stored within your facility. In 2025, smart companies are rethinking warehouse layouts to speed up material flow and reduce handling time.
Here are a few best practices:
- Store high-frequency items near assembly lines
- Use FIFO/LIFO methods depending on your product type
- Leverage barcode scanners or RFID for instant tracking
- Design dedicated zones for receiving, storing, and picking.
Common Material Management Challenges & Fixes
Even with the best intentions, material management can go off track without the right tools and processes. Many businesses—especially small and mid-sized manufacturers—face recurring problems that directly impact production efficiency, cost control, and customer satisfaction. Here’s a breakdown of typical challenges and how to fix them using modern solutions:
| Problem | Impact | Solution |
|---|---|---|
| Overstocking | High carrying costs, wasted materials | Use demand-driven planning tools |
| Understocking | Production delays, lost sales | Set automated reorder points |
| Inaccurate BoMs | Errors in production and costing | Version-controlled BoM software |
| Poor supplier coordination | Late deliveries | Supplier performance tracking |
| Siloed data | Disconnected teams | Centralized cloud platform like Megaventory |
Optimizing Material Management With Megaventory
Megaventory is more than just inventory software. It’s a material management solution built for small and mid-sized businesses that need enterprise-level control, without the complexity cost that usually goes together.
Key Features:
- Multi-level BoM management
- Automated purchase orders based on stock levels
- Warehouse transfers for decentralized material handling
- Detailed reporting on consumption, waste, and vendor performance
- Role-based access for warehouse, procurement, and finance teams
🔗 Explore more in our article: Inventory Turnover Ratio for Retail Industry.
🧠 Pro Tips for Smarter Material Management in 2025
- Digital-first: Ditch spreadsheets and manual logs—invest in a flexible platform that scales with you.
- Collaborate: Involve procurement, warehouse, and production teams in material planning.
- Forecast monthly: Use real-time sales and seasonality data to update your demand plan.
- Optimize suppliers: Rank suppliers based on delivery time, defect rate, and cost—then build stronger relationships with the best.
- Standardize SKUs: Consolidate variations to reduce complexity in sourcing and storage.
Final Thoughts
In 2025, material management isn’t just about having the right parts in stock—it’s about running a lean, responsive operation that thrives in uncertainty. Whether you’re scaling a D2C brand or managing multi-location manufacturing, your material flow is your competitive edge.
Megaventory gives you the control, visibility, and automation to stay ahead of demand and delight your customers—without overloading your team.
Spiridoula Karkani is a Digital Marketer for Megaventory the online inventory management system that can assist medium-sized businesses in coordinating supplies across multiple stores. She is navigating the ever-shifting world of marketing and social media.