The current industrial and mercantile operations in business is in the revolutionary mode and necessitate a high degree of optimization if an industry is to hold up and stay flourishing. A viable industrial enterprise has to lay great stress on professionalism of management aspects such as better utilization of resources, productivity of area, materials and money, and input-output ratios. These efforts towards optimization increase profitability and ensure better financial performance. Materials management plays a pivotal role in these efforts demanding efficiency and skill from materials managers and an integrated approach towards this branch of management from the organization. As it is challenging to increase profits, the only other effective way left for raise return on capital blocked up in inventories is, not only achieving a higher return on investment by minimizing tied-up working capital, but also improving the liquidity position of the enterprise.