Definition: Material control is a management activity that administers how the inventory employed in the production process is procured, acquired, handled and utilized. It is a process that requires planning, organization an auditing of all the elements employed in certain productive activity.
What Does Material Control Mean?
The main objectives of material control are: to maintain an uninterrupted supply of all elements required for the production process to run smoothly, to reduce thefts and wastage through proper storing procedures and to manage efficient handling, dispensation and consumption of available materials. This is a crucial function for companies to reduce their costs, since it deals with one of the highest cost centers of any business organization, which is its productive process.
This function is normally subordinated to a Supply Chain Management Department, that oversees processes such as procurement, purchasing, quality control, inventory and plant management. Another key function of this activity is to make sure the quality of the elements is adequate to maintain the quality of the end product. This should be managed through previously executed supplier’s evaluations and quality tests, and afterwards, through quality checks of delivered goods. Perhaps the most crucial task of material control is to supply the required component uninterruptedly, to avoid delays and unforeseen disturbances to the productive workflow.
Example
Flakes Incorporated Co. is a company that produces cereals in various presentations for daily domestic consumption. The company is currently evaluating its material control process, since there have been recurrent inventory adjustments for missing materials. Since the company deals with large amounts of cereals like rice, corn and oat there are regular reductions caused by shipping and handling but the items are also easily extracted and it is hard to identify missing pounds by just observing the containers.
In order to deal with this situation, the Supply Chain Manager appointed a Controller. This individual is in charge of reviewing and approving each container being delivered, check the weight and proper storage procedures to be followed. Also, he will supervise proper usage of weighting machines, container sealing and consumption orders. By providing a more thorough supervision to these processes the company expects to reduce the occurrence of these losses as much as possible.
