PRESENTATION ON MATERIAL CONTROL

Submitted to: saini Submitted by: shalini singhal vibha khokher

4/22/12

Pradeep

INTRODUCTION

Inventory control is planning, ordering and scheduling of material used in manufacturing. It means right quantity of material is available at right time. Efficient inventory control keeps cost down and help production run smoothly. It means systematic control over purchasing, using and storing of material so as to minimize possible cost.

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DEFINITION:
It refers to the development responsible of for the proactive control of materials within manufacturing environment . or in easy words It is a system for checking that a company has enough materials in stock for its production needs, but is not storing more than, its needs because this would use capital unnecessarily a system for checking the quality of materials brought by a company.

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NEEDS FOR MATERIAL CONTROL

ECONOMIC PURCHASE-An efficient material control system, ensures how better quality material can be brought at the economical price, which will finally help to reduce the total cost of production. MINIMUM INVESTMENT-Undesirable stock raises the cost of production.therefore,an efficient material control system helps to avoid over-stocking of material and thus helps to maintain the investment. MINIMUM WASTAGE this system helps trained workers and store keepers to carefully handle the material to and from the store houses and factories and thus, minimize the wastage and losses of material by fire, theft, leakage etc.

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SOURCE OF INFORMATION-this system records all the important information related to material and thus is a great source of information and thus helps in making material purchasing and production plans. AVAILABILITY OF MATERIAL QUALITY MAINTAINIG PROPER RECORDS BALANCE ON HAND-An efficient material control system is one which always provides the ready balance of material on hand in terms of their quantity and value.

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TECHNIQUES OF MATERIAL CONTROL:1)SETTING OF VARIOUS STOCK LEVEL: in this technique of

material control, we study and control by calculating different level of quantity of stock. with our past records, we have to the data of normal usage, maximum usage, minimum usage.re-order quantity and minimum period and its mid will be average period. with this data, we can find following stock level a)Re-ordering level: It is the level of stock quantity between minimum and maximum level and material order was sent for getting fresh stock.

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b)Minimum level: it is the minimum balance ,which must be maintained in hand at all times, so that there is no stoppage of production due to nonavailability of inventory. Remember, you must need re-order level for getting it. Re-order level=normal usage *average period c)Maximum level: it shows maximum quantity, which should be in the stock, if we buy more, it means we are wasting money. Formula: re-order level *re-order quantity (minimum usage*minimum period)

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d)Average stock level: for calculating this Formula:-minimum level + maximum level /2 e)Danger level: Average consumption*lead time for emergency purchases.

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2) ABC ANALYSIS

Material is divided into 3 categories. Investment is done according to the value and the Material is controlled acc. to their level of Basis of classification is % no of item involved to

nature of that categories' material.

Investment

the proportion of total value of inventories.

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A category materials and its control

Quantity is of 10% and investment is of 70%. Significant few. Price or demand is very high, so materials should be EOQ should be kept to decrease misuse of money.

keep safe from wastage.

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B category material and its control

Normal material of production are included. material used are not few, not too many neither very cheap nor very costly Controlling is imp. Without this production is delayed. Minimum, maximum and re-order level should be

maintained by store keeper

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C category materials and its control

Quantity is of 70% and investment is of 10% Insignificant many. Relatively large no. of items normally inexpensive. Overstocking can increase store cost, so purchase

Should be in hand.

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3) TWO BIN SYSTEM

This technique have 2 bins, one used for minimum stock and second is used for reserve stock. its called KANBAN in USA. First bin is utilized for issuing the material for Records are made on bin card and store ledger card.

production and then, second bin is used .

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CONTINUOUS STOCK VERIFICATION

Experts are appointed by company to physically verify the stock with its records. Like internal audit of stock. Experts are independent from store and they have right to check, at any time

without giving any aduance information to store staff.

BENEFITS:

This surprise checking makes staff more responsible for their duty. Makes store keeper more sober moral to do the duty. It also helps to remove all discrepancies b/w actual stock and book records of

stock as experts can check records and take action against him.

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STEPS FOR EFFECTIVE STOCK VERIFICATION

Appoint technical expert with proper knowledge of measurement system. Direction of surprise checking should be given by heads. Stock in transit should not be mixed in normal stock at the time of checking. to make stock verification sheet after actual verification of stock an in this sheet, experts should record the result of verification.
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5) ORDER CYCLING

ON HAND review of material is made on a regular basis for ex. after 30 days Cycle length will vary, depending on the type of material being reviewed. Essential items have a shorter review cycle than less important terms. At the time of review, an order will be placed to bring the

Inventory to a desired level , e.g.. a-2 week supply.

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THANK YOU

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