ESSENTIAL FACTORS OF MATERIAL CONTROL - Quantitative Techniques for management

Define Essential Factors of Material Control

For the success of material control following factors should be kept in mind.

  1. Proper Co-ordination: There should be a proper co-operation and co-ordination among the departments dealing with material purchasing, receiving, testing, storing, production planning and accounting.
  2. Centralization of Purchasing: The important requirement of a successful inventory control system is the appointment of intelligent and experienced personnel in purchase department; these personnel should be expert in their field and negotiating the deals. It is important to determine purchase procedure to see that purchases are made, after making suitable enquiries, at the most favorable terms to the firm.
  3. Proper Scheduling: All the requisitions made by production department should be scheduled, so material could be issued them by time and production should not be stopped.
  4. Proper Classification: There should be a good method of classification and codification of materials. Proper code number should be allotted to each item and group, to facilitate prompt recordings, locating and dealing.
  5. Use of Standard Forms: There should be a standard forms for requisitions, order, issue, return and transfer of materials so that any information can be send to all department within no time.
  6. Internal Check System: Audit should be done by an independent party to check effectiveness of inventory control system.\
  7. Proper Storing System: All materials and supplies should be stored in a well designated location with proper safeguards. Such facilities will reduce the losses from damage, evaporation, pilferage, theft and deterioration. Store location should be in between the purchase department and production department, so that cost of internal transportation can be minimized.
  8. Proper Store Accounting: An efficient inventory control necessitates maintenance of proper inventory records. Any typical information regarding any particular item of inventory may be taken from such records.
  9. Proper Issuing System: Operation of a system of stores control and issue so that there will be delivery of materials upon requisition to departments in the right amount at the time they are needed
  10. Perpetual Inventory System: Operation of a system of perpetual inventory together with continuous stock checking so that it is possible to determine at any time the amount and value of each kind of material in stock.
  11. Fixing of Various Stock Levels: Stock of different levels should be fixed to ensure that there is no under and over-stocking of materials. Minimum stock level, maximum stock level, reorder point, safety level etc, should be pre-determined to ensure the continuity of smooth production.
  12. Determination of Economic Order Quantity: Economic order quantity should be determined to minimize the cost of inventory.
  13. Regular Reporting System: The information regarding the stock position, materials quantity etc, should be available to management regularly.

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