Material Control

Materials constitutes major portion of the total cost of the product. Supplies are also used for the manufacture of product. Both materials and supplies are collectively called as stores. The finished goods are termed as stock.

“Material control is a systematic control over purchasing, storing and consumption of materials, so as to maintain a regular and timely supply of materials, at the same time, avoiding overstocking.

Inventory control is confined to the techniques of maintaining stocks at desired levels whether they are raw materials, work in progress or finished goods with the primary objective of minimizing the cost.

Objectives of Materials Control:

(a) To provide information:

Another objective of materials control is to provide accurate information regarding material cost and inventory whenever needed by management.

(b) To fix responsibility:

A proper system of materials control also aims at fixing responsibility of operating units and individuals connected with the purchase, storage and handling of materials.

(c) To minimise wastage:

The loss of material may occur on account of rust, dust, dirt or moisture, bad and careless handling of materials, poor packing and many other reasons. The causes responsible for such losses must be brought to light and utmost efforts should be made to minimise the wastage of raw materials. This is possible only by introducing an efficient materials control system.

(d) To ensure requisite quality of materials:

The quality of finished products depends mainly on the quality of raw materials used. If quality of the raw materials is not up to desired standards, the end product will not be of desired quality which affects the sale of the product in the market resulting in loss of profits as well as goodwill of the concern. It is of vital importance to exercise strict control and supervision over the purchases, storage and handling of materials.

(e) To enable uninterrupted production:

The main object of material control is to ensure smooth and unrestricted production. Production stoppages and production delays cause substantial loss to a concern.

Advantages of Material Control

The following benefits are available to the company if the company exercises proper control on the materials.

• It ensures uninterrupted flow of right quality and quantity of materials to the production department.
• Materials control eliminates wastage in use of raw materials and supplies in course of purchase, storage, handling and use.
• It reduces the risk of fraud and theft.
• The valuation of materials is very easy.
• It facilitates the preparation of various monthly financial statements.
• It fixes the responsibility on the part of the employers who are handling the materials at the maximum.
• It requires minimum amount of capital to buy materials.