What are materials?
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.
Commodities that are supplied to an undertaking to be utilized in the manufacturing process or to be transformed into products are called “Materials”.
The terms materials and stores are sometimes used interchangeably, but they are not identical. Stores is a wider term and covers items like sundry supplies, maintenance stores, tools, jigs, equipment besides material consumed in production. The raw materials and supplies are equivalent to cash. Hence, the management should exercise control over the materials and stores.
What is Materials Control?
Materials control refers to managerial activities relating to giving instructions or directions to ensure maintaining adequate quality and quantity of materials for uninterrupted production process with the objective of minimizing material cost per unit. Both materials control and inventory control are not one and the same.
Materials control is a wider term, which includes inventory control. Moreover, cost of production, planning of materials, purchase procedure, transportation and usage control are parts of materials control.
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
The main objectives of materials control are presented below:
1. Ensures adequate supply of materials as and when required for smooth production process.
2. Prevents over stocking and under stocking of materials.
3. Quick identification and supply of materials to the production department.
4. Prompt issue of materials.
5. Safeguarding of materials from loss of stock by theft and fire.
6. Protection of materials from unnecessary wastage of materials.
7. Protection of stores against pilferage.
8. Minimization of storage cost.
Advantages of Material Control
The following benefits are available to the company if the company exercises proper control on the materials.
1. Materials control eliminates wastage in use of raw materials and supplies in course of purchase, storage, handling and use.
2. It ensures uninterrupted flow of right quality and quantity of materials to the production department.
3. It reduces the risk of fraud and theft.
4. It facilitates the preparation of various monthly financial statements.
5. The valuation of materials is very easy.
6. It requires minimum amount of capital to buy materials.
7. It fixes the responsibility on the part of the employers who are handling the materials at the maximum.