Materials constitute a very significant proportion of total cost of finished product in most of the manufacturing industries. It may also be added that information about availability of materials and stores should be continuously available so that production may be planned properly and the required materials purchased in time. The publication of the Institute of Cost and Management Accountants on Budgetary Control defines it as “the function of ensuring that sufficient goods are retained in stock to meet all requirements without carrying unnecessarily large stocksâ€.
The objectives of a system of material control are the following:
(a)Â Â Â Â Â Â Â Â Â Â Â Â Â Ensuring that no activity, particularly production, suffers from interruption for want of materials and stores
(b)Â Â Â Â Â Â Â Â Â Â Â Â Â Seeing to it that all the materials and stores are acquired at the lowest possible price considering the quality that is required and considering other relevant factors
(c)Â Â Â Â Â Â Â Â Â Â Â Â Â Minimisation of the total cost involved, both for acquiring stocks and for holding them
(d)Â Â Â Â Â Â Â Â Â Â Â Â Â Avoidance of unnecessary losses and wastages that may arise form deterioration in quality due to defective or long storage or from obsolescence.
(e)Â Â Â Â Â Â Â Â Â Â Â Â Â Maintenance of proper records to ensure that reliable information is available for all items of materials and store that not only helps in detecting losses and pilferages but also facilitates proper production planning
Material Movement involves some basic steps that need to be followed. These are briefed in the following section:
(i) To plan for material
(ii) Transaction of Material
(iii) The storage of material till the time of requirement
(iv) To issue material at the time of production
(v) To receive the defective material and dispose it off.
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