Issue of Materials

The issue of materials is the process of transferring raw materials, components, or supplies from the store to the production department or other units within an organization. It is a key aspect of inventory control, ensuring that materials are provided when needed for production while maintaining accurate stock records and minimizing waste or misuse.

1. Objectives of Issuing Materials

  • Support Production: Ensure the right materials are available at the right time for uninterrupted operations.
  • Maintain Control: Prevent unauthorized access and misuse of stock.
  • Track Usage: Record material usage for costing, budgeting, and replenishment planning.

2. Types of Material Issues

A. Routine Issue

  • Materials issued according to regular production schedules or plans.

B. Emergency Issue

  • Materials issued urgently due to unforeseen production needs or stock errors.

C. Returnable Issue

  • Items like tools or containers that are expected to be returned after use.

D. Non-Routine Issue

  • Issued for purposes other than production, such as maintenance or R&D.

3. Documents Used in Issuing Materials

  • Material Requisition Note (MRN): A formal request from the production department to the stores for issuing specific materials.
  • Stock Issue Note / Issue Voucher: Document used to record the actual issue of materials, authorized by the storekeeper.
  • Return Note: Used if materials issued are returned to stores due to excess or non-usage.

4. Procedures for Issuing Materials

  • Step 1: Receive a duly authorized Material Requisition Note (MRN) from the requesting department.
  • Step 2: Verify item code, quantity requested, and availability in stock.
  • Step 3: Physically issue the materials and record the transaction on the bin card and stock ledger.
  • Step 4: Get acknowledgment from the receiving department or personnel.
  • Step 5: Update inventory records and account for cost allocation if required.

5. Control Measures During Material Issue

  • Authorization: Only authorized personnel should request and approve material issues.
  • FIFO Method: Follow “First-In, First-Out” to ensure older stock is used first, especially for perishable or time-sensitive materials.
  • Monitoring Usage: Compare material issues with production outputs to detect inefficiencies or wastage.
  • Segregation of Duties: Separate roles for requesting, issuing, and recording materials to prevent fraud.

6. Impact on Costing and Inventory

  • Cost Tracking: Material issues are recorded as direct or indirect costs in production costing systems.
  • Inventory Adjustment: Issuing materials decreases stock balances and affects reordering decisions.

Efficient Material Issuing for Operational Success

Issuing materials efficiently ensures that production processes remain uninterrupted, inventory records stay accurate, and material costs are properly tracked. Proper documentation, clear procedures, and strong internal controls are essential to managing material issues effectively and supporting operational excellence.