Material Management Accounting Systems from a Government Property System Perspective

1. Material Management Accounting Systems from a Government Property System Perspective Christopher Campbell AssetSmart

3. Agenda • What is Material? • Typical Material Categories • What is an MMAS and Why Would I Need One? • Key Elements of an MMAS

4. What is Material?Definition: “Material” means property that may be consumed or expended during the performance of a contract, component parts of a higher assembly, or items that lose their individual identity through incorporation into an end item. source: FAR 45.101

5. Typical Material Categories • Expendable/Consumable • Examples: Nuts & bolts, batteries, wire, hose, filters, chemicals, paint, ammunition • Serialized • Examples: Engines, avionics, radios, computer drives, software, weapons • Durable Non-Serialized • Examples: Hand tools, reusable shipping containers, patch cables

6. What is a Material Management Accounting System (MMAS)?Definition: “Material management and accounting system (MMAS)” means the Contractor's system or systems for planning, controlling, and accounting for the acquisition, use, issuing, and disposition of material. Material management and accounting systems may be manual or automated. They may be stand-alone systems or they may be integrated with planning, engineering, estimating, purchasing, inventory, accounting, or other systems. source: DFARS 252.242-7004

7. Key Elements of an MMAS • Stock Master or “Catalog” • Identifies and Classifies all of the generic types of material, including part number, description, tracking type (serialized/nonserialized), and so on • This is the “meta” data about the inventory, not the inventory itself

8. Key Elements of an MMAS (cont’d) • Inventory / Stocking Data • All on-hand material, including owning contract, quantity, cost, location (stockroom/bin), last inventory date, serial/lot number (if applicable), shelf expire date (if applicable) • Condition: New, used, needs repair, repaired/refurbished • Status: Active/ready-to-issue, rejected, misdirected, low-stock, over-stock, etc.

9. Key Elements of an MMAS (cont’d) • Life-Cycle and Issue-Tracking History • Closed-loop audit trail for all transactions affecting quantity, cost, condition, or accountability • Trace each transaction to date/time, contract, from/to location, end item, performed-by employee, issued-to employee, reference document • Capture serial/lot number where applicable

10. Key Elements of an MMAS (cont’d) • Physical Inventory • Orderly process to periodically verify the accuracy of the system’s records versus the real world • Helps identify and correct human error or other issues driving accuracy below the target (95% for example) • Data collection can be old-school (paper) or high-tech (barcode or RFID scanning) • Must have a way to report and reconcile deviations

11. Key Elements of an MMAS (cont’d) • Requirements / Allocations (Production Plan) • Production Schedule – End items by contract/delivery order(Ideally by each end item and its target completion date) + • “BOM” – required stock items and quantities per end item= • Requirements – What Material needs to be where by when BOM = “Bill of Materials” –

12. Key Elements of an MMAS (cont’d) • Shortage Reporting • Requirements – What Material needs to be where by whenvs. • Inventory– What Material do I have on-hand now= • Shortage Report – How might shortages impact Production?

13. Sample Shortage Report Excerpt

14. Questions and Answers Some Images Courtesy of FreeDigital Photos

15. For more information, contact: Christopher Campbell 2800 28th Street Santa Monica, CA 90405 310.450.2566 www.assetsmart.com ccampbell@assetsmart.com www.twitter.com/assetsmart