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Material Control

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mandeepku1986
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23 views4 pages

Material Control

Uploaded by

mandeepku1986
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
Material Control ‘The first element of the cost of the product is raw-material. In this chapter we are discussing the techniques and procedures, to be followed for controlling this important component. MATERIALS CONTROL Necessity . Materials form an important part of the cost ofa product and, therefore, proper control over material js necessary from the time orders are placed with the suppliers till they are actually consumed in plant ‘and office operation, or have been sold as merchandise. An efficient system of materials control will ead to a significant reduction in production cost. Control over materials is also necessary to assure a steady supply of each item of material. In the absence of guantity-on-hand information regarding each item, there is a constant danger of material being stored, in too small a quantity which may result in a heavy loss consequent upon stopping of the whole assembly line, or in too large quantity resulting in serious obsolescence losses. Materials control defined Materials control may be defined as the systematic control over the procurement, storage and usage of material so as to maintain an even flow of materials and avoiding at the same time excessive investment in inventories. Thus, materials control involves efficient functioning of the following operations : (i) Purchasing of materials. (ii) Receiving of materials, (iii) Inspection of materials. (iv) Storage of materials. (») Issuing of materials. (vi) Maintenance of inventory records (vii) Stock audit. PURCHASING OF MATERIALS The work of purchasing materials should be handled, if the size of the concem permits, by a separate Purchasing Department, under an official designated as Purchase Manger, In order to ensure procurement of materials of requisite quantity at economic prices, following points should be noted : 1. Purchasing should be centralised i.e., all purchases should be done by the Purchasing Department except for small purchases which may be done by departmental managers. This will result in efficient buying on account of the specialised knowledge of the Purchase Manager, and advantageous prices and favourable terms because of bulk purchases. > | Morera Department and other departments is neq n between Purchasing i ists containing requirements of all the departments ofthe factory q 88. ly proper Gears is a must between the Parchasing and a ne Departmen, apt . Close he Acc = einai by sould ete endeavor ofthe Purchasing Deparment ge Py 42 2. Full co-operatior invol - aarti Puruare Mansger should have a good technical knowledge of the ing . Th measure of administrative and organising ability. Mada 5. A proper purchase procedure should be followed. hasing procedure an reed A gence ‘Requisition. The initiation of purchase begins with the Teceipts of a purchase rem... by the purchasing department. The purchase requisition is prepared by the storekeeper fa items and by the departmental head for special equipment or materials not stocked ae re, requisition is approved by one or more executives in addition to one originating the requi requisition is prepared in triplicate, the original copy is sent to the purchasing department, retained by the storekeeper or executive initiating the purchase requisition and the third Copy is sex the costing department, The requisition contains particulars regarding quantity, the auality o mae, specifications, and the date by which purchase of materials is required, The requisition may be in following form : sito, T he secon PURCHASE REQUISITION No. 102 Date : Ist May, 2015 Please purchase for X Department/Work Order No. 310 Serial Stock Description of Articles Quantity Remarks No. Code No. ie B36 TA" Copper Nails 3g. Materials required by 16th May, 2009 Requested by J. Ram Approved by S. Ram Fig. 2.1 . Inviting Quotations. On receipt of Purchase Requisition, the Purchase Department would iit fenders or quotations for supply of goods. A schedule of quotations may be prepared in the follow form: SCHEDULE OF QUOTATIONS Materials 114" Copper Nails Date : 4th May, 2015 ‘Name of the Rate per kg. Time of Term of sts Supplier z Delivery Delivery Re 1. Hall & Co, 760/- 7 days Free 2. Copper & Co. Ltd, 760/ 14 days Free ‘Accepted 3. White & Co, T10/- 10 days Free Purchasing Clerk J, Sahai Purchase Manager R. Sarkar Fig. 2.2 Purchase Order. The purchase order is prepared by the purchasing department. alsa authorisation to the vendor or supplier to supply a specialised quantity and quality of vranager ot? Stipulated terms, and at the time and place mentioned, It is signed by the Purchase eth atte executed after investigating the sources of supply, so as to acquire the highest quality lowest price. The order may by in the following form : / aah — ae MareRiAL CONTROL 43 ABCCo, Ltd. PURCHASE ORDER To Order No. 421 WMite & Co Requisition No, 102 Mumbai Date 6th May, 2015 Date by which materials are required 16th Ma Please supply the following : “atired 16th May, 2015 Serial Description of articles it — pt Quantity Rate Amount je 1 5" Copper Nails Ske. T10/-perkg. | 3,550 Delivery Free at our Works Packing and Despatching Instructions Sealed Wooden Cases R. Sarkar Terms of payment One Month’s Credit Purchase Manager Fig. 23 The purchase order is generally prepared in triplicate. The original copy is mailed to the vendor, the

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