Objectives of Material Control

Material control aims to ensure the efficient and economical use of materials in production and operations. It involves planning, purchasing, storing, and issuing materials in a way that minimizes waste, prevents stockouts, and reduces overall material costs. Proper material control enhances productivity, ensures cost accuracy, and supports timely delivery of goods or services.

1. Ensure Continuous Availability of Materials

  • Prevent Production Delays: By maintaining adequate stock levels, material control ensures that production processes are not interrupted due to lack of materials.
  • Support Operational Efficiency: Guarantees timely supply to various departments as needed.

2. Minimize Material Waste and Losses

  • Reduce Obsolescence and Deterioration: Controls storage conditions and movement of materials to prevent damage or expiry.
  • Prevent Theft and Pilferage: Implements checks and security measures to protect material assets.

3. Optimize Inventory Levels

  • Avoid Overstocking: Prevents tying up of capital in excess inventory.
  • Avoid Understocking: Reduces the risk of stockouts and emergency purchases at higher costs.
  • Support Working Capital Management: Helps maintain a balance between holding cost and order cost.

4. Achieve Cost Control and Accuracy

  • Ensure Accurate Costing: Proper tracking of material usage improves product cost calculations.
  • Identify Cost Variances: Allows analysis of material price and usage variances for corrective action.

5. Improve Purchasing Efficiency

  • Facilitate Timely Reordering: Sets reorder levels and uses purchase planning to avoid last-minute procurement.
  • Negotiate Better Terms: Helps in placing bulk orders at favorable prices and delivery schedules.

6. Enhance Operational Coordination

  • Coordinate Between Departments: Ensures that purchasing, stores, and production departments work in sync.
  • Streamline Material Flow: Promotes efficient handling, movement, and issue of materials.

7. Enable Accurate Record-Keeping and Reporting

  • Maintain Updated Stock Records: Helps track material availability and usage in real time.
  • Support Financial Reporting: Accurate records support inventory valuation and cost of goods sold (COGS) reporting.

Strategic Importance of Material Control Objectives

The objectives of material control are critical for cost efficiency, operational effectiveness, and financial accuracy. By ensuring that the right materials are available in the right quantities at the right time and place, material control contributes to smooth production, better financial outcomes, and a stronger competitive position in the market.