10.stores maangement

8/14/2019 10.Stores Maangement

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Stores ManagementStores Management

It is serving facility, inside an org.,It is serving facility, inside an org.,

responsible for proper storage of the materialresponsible for proper storage of the material

and then issuing it to respective departmentsand then issuing it to respective departments

on proper requisition. The custodian of storeson proper requisition. The custodian of stores

is generally known asis generally known asstore-keeper or storestore-kee

per or store

controllercontroller


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Those item which are not in use for some specificThose item which are not in use for some specificduration e.g. spare parts and the raw- materials areduration e.g. spare parts and the raw- materials are

called as stores and building space where these arecalled as stores and building space where these arekept is known askept is known asStore RoomStore Room

As per MaynardAs per Maynard

The duty of store keeping areThe duty of store keeping areto receive materials,to receive materials,

to protect them while in storage from damage andto protect them while in storage from damage andunauthorized removal,unauthorized removal,

to issue the materials in the right qualities, at rightto issue the materials in the right qualities, at righttime, to the right place andtime, to the right place and

to provide these services promptly and at least costto provide these services promptly and at least cost


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Stores SystemStores System

CLOSEDCLOSED

2.2. All materials are stored in aAll materials are stored in aclosed/controlled area.closed/controlled area.

3.3. No other person than theNo other person than the

stores personnel isstores personnel ispermitted in the area.permitted in the area.

4.4. Materials can leave or enterMaterials can leave or enterthe storage area only bythe storage area only byauthorized documents.authorized documents.

5.5. Maximum physicalMaximum physicalsecurity.security.

6.6. Tight accounting control ofTight accounting control ofinventory materialinventory material

OPENOPEN

2.2. There is no specific area.There is no specific area.Stores are maintained in theStores are maintained in theform of suitable/ convenientform of suitable/ convenientlocations.locations.

3.3. Every individual has accessEvery individual has accessto any storage facility.to any storage facility.

4.4. After the receipt of theAfter the receipt of thematerial it is delivered tomaterial it is delivered torespective department torespective department toexpedite the productionexpedite the productionactivity.activity.

5.5. Chances of pilferage high.Chances of pilferage high.

6.6. Less emphasis onLess emphasis on

accounting control of theaccounting control of thematerial.material.


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Functions of Store-KeepingFunctions of Store-Keeping

1.1. Receiving, handling and speedy issue of material.Receiving, handling and speedy issue of material.2.2. Custodian of goods I store against damage andCustodian of goods I store against damage and

pilferage.pilferage.

3.3. To ensure regular supply of materials .To ensure regular supply of materials .

4.4. Effective utilization of store space.Effective utilization of store space.5.5. To provide service to the organization in mostTo provide service to the organization in most

economical way.economical way.

6.6. To keep the details of the items available in store upTo keep the details of the items available in store up

to date.to date.7.7. Proper identification and easy location of items.Proper identification and easy location of items.

8.8. Physical checking of stocks.Physical checking of stocks.


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Objectives of Store-KeepingObjectives of Store-Keeping

Easy location of the items in store.Easy location of the items in store.

Proper identification of items.Proper identification of items.

Speedy issue of material.Speedy issue of material. Efficient utilization of space.Efficient utilization of space.

Reduction in need of material handlingReduction in need of material handling

equipment.equipment.


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Duties of Store- KeeperDuties of Store- Keeper

The items in stores shd. Be placed in such aThe items in stores shd. Be placed in such a

way that these can be easily located.way that these can be easily located.

To maintain the store premises neat and clean.To maintain the store premises neat and clean.

Efficient and effective service to the org.Efficient and effective service to the org.


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FUNCTIONSFUNCTIONS

RECEIVINGRECEIVING

OUTSIDE SUPPLIERS INTERNALOUTSIDE SUPPLIERS INTERNAL

SUPPLIERSSUPPLIERS


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OUTSIDE SUPPLIERSOUTSIDE SUPPLIERS

On dispatching items, suppliers normally send anOn dispatching items, suppliers normally send an

advice note to the stores showing date of dispatch,advice note to the stores showing date of dispatch,

carrier details, description of the consignment and thecarrier details, description of the consignment and the

value of items. This ensures quick and easy clearancevalue of items. This ensures quick and easy clearanceof bills etc.of bills etc.

The purchase copy, suppliers note and transporterThe purchase copy, suppliers note and transporter

information/ consignment note enables the storesinformation/ consignment note enables the stores

manager to organize and plan for expeditiousmanager to organize and plan for expeditious

clearance of materials and minimise costclearance of materials and minimise cost


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INTERNAL SUPPLIERSINTERNAL SUPPLIERS

Whenever materials are received from internalWhenever materials are received from internal

divisions or returned from user departmentsdivisions or returned from user departments

transfer notes and returns to stores documentstransfer notes and returns to stores documents

are usually used for this purpose.are usually used for this purpose.


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2. STORES SECTION2. STORES SECTION

This is a place where all materials received byThis is a place where all materials received by

stores department are kept with protectionstores department are kept with protection

against deterioration.against deterioration.

Various stores operation are:- LOCATION,Various stores operation are:- LOCATION,

PROCEDURE LAYOUT EQUIPMENT andPROCEDURE LAYOUT EQUIPMENT and

IDENTIFICTAION OF STORES SECTION.IDENTIFICTAION OF STORES SECTION.


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(a)(a) LOCATION IN STORES SECTION:-LOCATION IN STORES SECTION:-

Stores are to provide space to the materials tillStores are to provide space to the materials till

these are issued to the, respectivethese are issued to the, respectivedepartments of the enterprise.departments of the enterprise.

(b) Working Procedure:- The stores incharge(b) Working Procedure:- The stores incharge

receives the materials from receivingreceives the materials from receivingsections along wit goods inward note. Thesections along wit goods inward note. The

material is classified and coded according tomaterial is classified and coded according to

their nature and use. For quick and easytheir nature and use. For quick and easyidentification of the items category, a binidentification of the items category, a bin

card is tagged with each self.card is tagged with each self.


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Specimen of Bin CardSpecimen of Bin Card

Stores Bin CardStores Bin Card

Card No.Card No. Part No.Part No.

DescriptionDescription LocationLocation DateDate IN OUT STOCKIN OUT STOCK

The bin card contains upto date informationThe bin card contains upto date informationabout the receipt, issue and balance of theabout the receipt, issue and balance of the

respective item in the stock.respective item in the stock.


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( C ) Layout of Stores Section( C ) Layout of Stores Section

1.1. Flexible in arrangementFlexible in arrangement

2.2. Convenience in physical counting ofConvenience in physical counting of

materials.materials.

3.3. Efficient use of floor space and height.Efficient use of floor space and height.

4.4. Minimum handling and transportation ofMinimum handling and transportation of

materials .materials .5.5. Items used sparingly shd. Be easy to locate.Items used sparingly shd. Be easy to locate.


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( D ) Stores Equipment( D ) Stores Equipment

A good store is equipped for handling,A good store is equipped for handling,measuring and weighing the materials. Themeasuring and weighing the materials. Theequipment should be such that stores invt. Andequipment should be such that stores invt. And

operating expenses are reduced.operating expenses are reduced.

(E) Materials handling Facilities:(E) Materials handling Facilities:There shd. Be proper weighing and measuringThere shd. Be proper weighing and measuring

instruments at the time of receiving andinstruments at the time of receiving andissuing the materialsissuing the materials


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(F) Identification of materials in(F) Identification of materials in

storesstores

Tagging some piece of paper or cloth with theTagging some piece of paper or cloth with the

items.items.

Labels may be fixed on the items.Labels may be fixed on the items.

The coded number or any other identificationThe coded number or any other identification

mark may be embossed on the items.mark may be embossed on the items.

Painting or colour coding of items.Painting or colour coding of items.


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Methods of CodingMethods of Coding

Mnemonic MethodMnemonic Method:- Here alphabets closely:- Here alphabets closelyassociated with name of the item are used e.g. MTassociated with name of the item are used e.g. MTcan be used for some metallic item. This is usefulcan be used for some metallic item. This is usefulwhen few type of items are to be stored.when few type of items are to be stored.

Random MethodRandom Method:- Here both alphabets or numerals:- Here both alphabets or numeralscan be used randomly. But the method is rathercan be used randomly. But the method is ratherarbitrary.arbitrary.

Scientific MethodScientific Method:- The items are divided into:- The items are divided into

number of groups and each group is given somenumber of groups and each group is given somecode. Then further sub-grouping is done on the basiscode. Then further sub-grouping is done on the basisof classification of item in any group, its shape,of classification of item in any group, its shape,function etc.function etc.


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Location CodingLocation Coding

The location can be identified in terms of the number of theThe location can be identified in terms of the number of thewarehouse , row number, column number, rack number, shelfwarehouse , row number, column number, rack number, shelfor bin number etc. Location of any item inside the stock canor bin number etc. Location of any item inside the stock canalso be decided in three ways:-also be decided in three ways:-

Fixed Location:- Here some fixed place is designated to eachFixed Location:- Here some fixed place is designated to eachclass of item. The basis can be like Supplier wise, item wise,class of item. The basis can be like Supplier wise, item wise,utility of the item etc.utility of the item etc.

Random Location :- Items are placed according to theRandom Location :- Items are placed according to theavailability space in store at the time of receiving the items.availability space in store at the time of receiving the items.

Zonal Location:- like Bulk Zone, Reserve stock, indirectZonal Location:- like Bulk Zone, Reserve stock, indirectmaterial like spares and consumable items .material like spares and consumable items .


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3. ISSUE SECTION3. ISSUE SECTION

It handles the issue of materials when requiredIt handles the issue of materials when required

by some department of the enterprise.by some department of the enterprise.

Materials carry some money value and inMaterials carry some money value and in

order to avoid malpractices and to curb theorder to avoid malpractices and to curb the

tendency of waste, the items should be issuedtendency of waste, the items should be issued

against proper requisition.against proper requisition.

The material requisition is a request to theThe material requisition is a request to the

stockroom to issue materials.stockroom to issue materials.


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4. Accounting Section4. Accounting Section

The accounts section exercises financialThe accounts section exercises financial

control over stores. The goods receipt book iscontrol over stores. The goods receipt book is

maintained for all arrivals, making the receiptmaintained for all arrivals, making the receipt

in triplicate, a copy of which is sent toin triplicate, a copy of which is sent to

accounts section and other to the store section.accounts section and other to the store section.


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5. Stock Taking Checking5. Stock Taking Checking

This implies physical checking of items in store to see thatThis implies physical checking of items in store to see thatthese are in accordance with the entries of stores ledger.these are in accordance with the entries of stores ledger.

METHODS OF STOCK CHECKING ARE:-METHODS OF STOCK CHECKING ARE:- FIXED ANNUAL INVENTORY:- A special team is deputedFIXED ANNUAL INVENTORY:- A special team is deputed

to check and count the material inside the stores at the end ofto check and count the material inside the stores at the end ofeach financial year.each financial year.

PERPETUAL INVENTORY:- In this system the stock controlPERPETUAL INVENTORY:- In this system the stock controldepartment maintain upto date and systematic records of eachdepartment maintain upto date and systematic records of eachand every transaction. There is a system of continousand every transaction. There is a system of continous

verification of stock. The entries on bin card and stores ledgerverification of stock. The entries on bin card and stores ledgershould tally with each other. In case of discrepancies thoroughshould tally with each other. In case of discrepancies thoroughinvestment is made.investment is made.


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Advantages of prepetual inventoryAdvantages of prepetual inventory

There is no need to stop the production for checkingThere is no need to stop the production for checking No dislocation in stores operations.No dislocation in stores operations. Checking is done in a systematic way, thus reducingChecking is done in a systematic way, thus reducing

the chances of errors.the chances of errors. Mistakes, discrepancies are spotted more quickly.Mistakes, discrepancies are spotted more quickly.

Important and expensive items can be checked moreImportant and expensive items can be checked morefrequentlyfrequently

Facilitates the preparation of interim profit and lossFacilitates the preparation of interim profit and lossaccounts.accounts.

Avoids excessive inventory maintenance.Avoids excessive inventory maintenance.

10.stores maangement

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