Material control comprehensive framework

Material control can be defined as a comprehensive framework for the accounting and control of material cost designed with the object of maintaining material supplies at a level so as to ensure uninterrupted production but at the same time minimizing investment funds. In simple words material control is a systematic control over the purchasing, storing and using of materials so as to have the minimum possible cost of material. Because materials constitute such a significant part of product and since this cost is controllable, proper planning, purchasing, handling and accounting are great importance. Material control is accomplished through functional organization, assignment of responsibility, and documentary evidence obtained in various stages of operations from the approval of sales and production budgets to the completion of products which are ready for sale and shipment. Material control involves recording on printed forms all steps and movements which occur in the acquisition and utilization of materials. Effective control also requires the systematic preparation of periodic summaries and reports.

Level of material control: Two levels of material control exist quantity or unit control and financial control. Production executive and storekeeper are primarily interested in quantity control because their interest is to see that there should be no stock out problem. On the other hand, financial executives are interested that too much money should not be invested in material and dollar spent in material should be efficiently and effectively utilized. Keeping in view unit control and financial control, material control should meet these two conflicting objectives:

The main maintenance of sufficient quantity of every item of material for efficient operations Maintenance of an inventory that is not detrimental financially.

Aspect of material control there are two aspects of material control

1. Accounting aspect: in the accounting aspect of material control is concerned with maintaining documentary evidence of movement of materials at every stage right from the time sales and production budgets are approved to the point when materials are purchased and actually used in production operations.
2. Operation aspect: This aspect of material control is concerned with the maintenance of material supplies at a level so as to ensure that material is available for use in production and production services as and when required by minimizing investment in materials.