A: Mike Fogg, consultant at the PMMS Consulting Group, writes: The prime consideration should be that the structure of the organisation should meet the needs of the customer, both internal and external, who actually pays our wages. So the question should be: “What will best provide a seamless business process to deliver the best service to our customer?”

The answer would seem to be that materials management should provide a flow of goods to the internal customer. I presume this to be “production”, based on demands and forecasts generated by that area. That would imply that materials management controls all of the business processes that support that customer. This would include purchasing and stores functions in this type of situation.

The auditors may well be concerned about “separation of duties issues” and yes, if the same person is authorising the purchase, making the receipt and issuing the goods, they have a genuine concern. However, most organisations normally handle this by allocating these responsibilities to separate teams, with adequate internal controls.

Your question also asks if “stock control” should be under finance. Again, stock control and the decisions about how much to re-order and when items are needed are an integral part of the supply chain. As such, the people carrying out this function need to be part of the seamless process serving the customer, again assuming that there is a separation of duties - buyers can make terrible inventory managers.

I do not have full details about the precise situation you face. However, it seems clear that one integrated supply chain function - call it what you will - will meet the customer’s needs best.

Lastly, one tool I have used successfully in the past has been a monthly inventory management meeting. “Oh no,” I hear you cry, “not another meeting!” But consider the fundamental difficulties of running an inventory management function and the conflicting objectives of finance and other functions such as sales, maintenance

and production.

There are tremendous benefits in getting people together and agreeing objectives and controls, talking about future projects and so on - and working together as a team.