Material Control and its Advantages
Material Control can be defined as making available, at the minimum cost, the required quantity of quality material in a timely manner at the right place. In order to have an ideal system of material control, a higher level of coordination between purchase department, stores department and production department is very important. There are various advantages involved in material control and they are as follows:-
1. Continuous supply: – A continuous flow of input materials is ensured by the system of material control, so that the production and service departments function flawlessly.
2. Optimum Investment: – Investment in various inventories is kept at optimum level , taking into consideration the operating requirements and resources. Thus it helps to minimize the carrying cost.
3. Procurement at Minimum Costs: – Purchase of quality materials and other inputs at the minimum rate from a regular supplier is ensured under the system of material control.
4. Minimum Total Cost: – There is a reduction in Total cost, which includes ordering and carrying costs, under the system of material control.
5. Avoids Wastages and Losses: – Wastages during the storage and usage of materials due to various factors is avoided to a great extent.
6. Proper records: – The system makes sure, accurate and up to date record keeping of inventories.
7. Provides Information: – The system ensures providing requisite information, with regard to the inventories, to the management promptly, which facilitates decision making by the management.
8. Prevents Lag- time of Production: – Uninterrupted supply of materials and other necessary inputs ensures that there is no lag-time of production.