Definition of Material Control
Material control is a critical function in manufacturing and production management, responsible for overseeing the availability, timing, and quantities of materials needed for production processes. Effective material control ensures that production schedules are not disrupted due to material shortages while also mitigating the risks and costs associated with overstocking inventories. Accountability in material use and expense is a key component, often requiring diligent record-keeping and inventory management systems.
Key Components
- Availability: Ensuring that the required materials are available in the required place.
- Timing: Guaranteeing that materials are delivered at the right time.
- Quantity: Ensuring the right quantities are available to meet production needs.
- Accountability: Tracking and accounting for the materials used in production to prevent wastage and overstocking.
Examples of Material Control
- Automotive Manufacturing: In a car production plant, material control ensures the timely arrival of parts like engines, tires, and electronic systems to the assembly line. This prevents delays in the production schedule.
- Food and Beverage Industry: Food manufacturers manage perishable raw materials like fruits, vegetables, and dairy products, ensuring they meet production needs without excess that leads to spoilage and waste.
Frequently Asked Questions (FAQs)
Q1: Why is material control important in production management?
- A1: Material control ensures the smooth operation of production processes. By maintaining the right balance between having enough materials and avoiding excessive inventory, it helps minimize costs, reduce delays, and ensure production runs efficiently.
Q2: What are some common methods used in material control?
- A2: Common methods include Just-In-Time (JIT) inventory, Material Requirements Planning (MRP), Economic Order Quantity (EOQ), and kanban systems.
Q3: How does material control contribute to cost savings?
- A3: Material control minimizes waste, reduces holding costs for inventory, and prevents production stoppages, leading to cost savings throughout the production lifecycle.
Q4: What tools or software are commonly used for material control?
- A4: Enterprise Resource Planning (ERP) systems, inventory management software, and specialized supply chain management tools are commonly employed.
Q5: What challenges are commonly faced in material control?
- A5: Challenges include demand variability, supply chain disruptions, inaccurate forecasting, and balancing inventory costs against the benefits of material availability.
Related Terms
- Inventory Management: The supervision of non-capitalized assets and stock items.
- Supply Chain Management: The management of the flow of goods and services and includes all processes that transform raw materials into final products.
- Just-In-Time (JIT) Inventory: An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.
- Material Requirements Planning (MRP): A production planning, scheduling, and inventory control system used to manage manufacturing processes.
- Economic Order Quantity (EOQ): The optimal order quantity that minimizes the total holding costs and ordering costs.
Online References
- Investopedia’s Inventory Management Guide - An overview of inventory management principles and strategies.
- APICS Supply Chain Council’s Resources - A professional association for supply chain and operations management that provides comprehensive resources.
Suggested Books for Further Studies
- “Supply Chain Management: Best Practices” by David Blanchard
- “Introduction to Materials Management” by J.R. Tony Arnold, Stephen N. Chapman, and Lloyd M. Clive
- “The Essentials of Material Control” by William D. Skall
- “Manufacturing Planning and Control for Supply Chain Management” by F. Robert Jacobs, William L. Berry, D. Clay Whybark, and Thomas E. Vollmann
Accounting Basics: “Material Control” Fundamentals Quiz
### What is the primary objective of material control in production?
- [ ] To increase production speed regardless of costs
- [x] To ensure materials are available when needed, avoid overstocking, and maintain accountability
- [ ] To minimize the use of materials in production
- [ ] To forecast future market trends accurately
> **Explanation:** The primary objective of material control is to ensure materials are available at the required place, time, and quantity while maintaining accountability and avoiding overstocking.
### What component is NOT part of material control?
- [ ] Availability
- [ ] Timing
- [ ] Quantity
- [x] Market Analysis
> **Explanation:** Material control focuses on availability, timing, and quantity of materials, whereas market analysis is typically not a component of material control.
### Which method is commonly used in material control to ensure efficiency?
- [x] Just-In-Time (JIT) inventory
- [ ] Product Lifecycle Management (PLM)
- [ ] Activity-Based Costing (ABC)
- [ ] General Accepted Accounting Principles (GAAP)
> **Explanation:** Just-In-Time (JIT) inventory is a method used to enhance efficiency by receiving goods only as they are needed in the production process.
### Which industry might require the most stringent material control due to the perishable nature of materials?
- [ ] Automotive Manufacturing
- [x] Food and Beverage Industry
- [ ] Textile Manufacturing
- [ ] Construction Industry
> **Explanation:** The Food and Beverage Industry often requires stringent material control because the materials are perishable and have limited shelf life.
### What can be minimized by effective material control in production management?
- [ ] Labor costs
- [x] Holding costs
- [ ] Marketing expenses
- [ ] Human resource issues
> **Explanation:** Effective material control helps minimize holding costs by ensuring that inventory levels are optimized and aligned with production needs.
### Which system integrates supply chain and inventory management in an organization?
- [x] Enterprise Resource Planning (ERP)
- [ ] Customer Relationship Management (CRM)
- [ ] Business Intelligence (BI)
- [ ] Human Resource Management (HRM)
> **Explanation:** Enterprise Resource Planning (ERP) systems integrate various business processes including supply chain and inventory management.
### Material control ideally avoids overstocking because overstocking leads to:
- [ ] Increased production speed
- [x] Increased costs
- [ ] Better quality products
- [ ] Increased market demand
> **Explanation:** Overstocking leads to increased holding costs and ties up capital that could be used elsewhere, thus effective material control prevents such scenarios.
### Material Requirements Planning (MRP) is used in material control to:
- [ ] Increase product demands
- [ ] Enhance customer loyalty
- [x] Plan production schedules and manage inventory
- [ ] Manage employee performance
> **Explanation:** Material Requirements Planning (MRP) is used to plan production schedules and manage inventory effectively in material control.
### What is one of the main challenges of material control?
- [ ] Lack of trained personnel
- [x] Demand variability and supply chain disruptions
- [ ] Aggressive marketing strategies
- [ ] Limited market reach
> **Explanation:** Demand variability and supply chain disruptions are common challenges in material control as they affect the timely availability and quantity of materials.
### Which professional association provides comprehensive resources for supply chain and material control management?
- [ ] International Monetary Fund (IMF)
- [x] APICS Supply Chain Council
- [ ] The Securities and Exchange Commission (SEC)
- [ ] American Marketing Association (AMA)
> **Explanation:** APICS Supply Chain Council is a professional association that provides resources and certifications for supply chain and material control management.
Thank you for exploring our comprehensive guide on material control. We hope this provides valuable insights into the intricacies of managing production materials efficiently.
