Requirements of a System of Materials Control:
The important requirements or essentials of adequate satisfactory system
of materials control are as follows:
Competent Purchasing Agent
Control by Budgeting Materials and Equipment
Operation of Perpetual Inventory
Standards or Level to be Fixed
Storage Control and Issue
Development of Controlling Accounts and
Proper coordination of all departments involved, in material purchasing,
receiving, testing, approving, storage, issue and accounting is essential.
Centralization of purchasing in a purchasing department under the direct
and authority of a competent trained purchasing agent is also considered
The use of standard forms for orders, requisition etc., upon which
written and signed instructions are given are essential for proper control
Use of materials, supplies and equipment budgets so that the economy in
purchasing and use of materials can be realized, is important factor for
adequate control of materials.
Storage of all materials and supplies should be in a designated location
properly safe guarded under supervision and proper planning should be there
for storing and issuing of materials.
Operation of proper perpetual inventory system should be used so that it
is possible to determine at any time the amount and value of each kind of
materials in stock. It also enables the comparison of book inventory
with the result of physical counting.
A minimum quantity of each item of materials, below which point the
inventory is not allowed to drop, and a maximum quantity, above which stock
is not carried should be fixed. In the same manner ordering level and
economic order quantity may be determined.
The proper operation of a system of stores control and issue is
introduced so that there will be delivery of materials upon requisitions to
departments in the right amount at the time they are needed.
The operation of internal check should be introduced to ensure that
transactions involving materials and equipment are checked by reliable and
Controlling accounts and subsidiary records reveal summary of
detailed materials costs at each stage of materials receipt and consumption
from the storeroom to
Regular reports and information should be provided for the management in
connection with the purchase of materials, issues from stock, inventory
balances, obsolete stock, goods returned to vendors, and