STORES MANAGEMENT1.Management is to plan, organise and execute given resources to achieve the target.2. Target- In respect of stores section, the target is to make materials available for production, maintenance and services, whenever required, at minimum expenses.3. Availability of material means that it should be:(a)Serviceable and(b)Of correct quantity.4.Whenever means that it should be available without time lag, i.e. quantity and quality should be up to date.5.Minimum expenses means economy in stores management is to be observed.FUNCTIONAL DIAGRAM:This can be represented as under:

Stores StockReceipt Stores Stock Issue (Unwanted) Disposal items7. Stores Management is a vital part of material management. It acts like a custodian similar to a cloak room of railways. It forms a main link between material planning procurement and Inventory Control. Its functions are combination of field work and office work which arc different from other wings of material management,8. Relation with cost of production-The cost incurred on stores Management is separately charged in estimates under the head "Store-Indirect Charges. Earlier, the constituents of variable overheads were mainly Power & Machine (P & M), Non Productive Charges (NP) & Store Indirect Charges (SI), but nowadays entire variable overheads are shown together, including S.I. Charges, as percentage of total variable overheads. Hence the stores management directly reflects on the cost of production and influences the financial management of the industry.

9. Planning -The following planning is made along with the initial planning of the industry. Storage space and godowns10.1 While planning and creating storage space, the following factors are taken into Account:(a)Types of items required by the industry.(b)Quantity of each item expected to be stored.(c)Types of items which can be stored in open.d)Types of items which need covered accommodation (e)Layout of godowns and storage space. Normally, the layout of godowns and storage space is made in such a manner that it leads to minimum transportation with respect to loading/unloading & point consuming/issuing section.(f)For the Items needing covered accommodation godowns and bins are provided.(g)Items needing special storage arrangements, like explosives, inflammable items gases, acids, textile items, paper items, rubber items, various chemicals and perishable items Petrol, Diesel, Oils etc. For these items a special care is taken in the layout & design of storage space soas to store them safety without causing any danger to the industry. Some of the above details are given below :-Explosives- Magazine based on category of explosive.Inflammable Items- Away from normal items.Gases- (a) ToxicAway from normal storage (b) Inflammable StoragePetrol - Underground tanks. Diesel - do- sprit -do-Acid - Acid proof Tanks Rubber Items - Protection from direct light and heat ventilation covered accommodation/coaled with chalk power. Paper - Humidity controlled atmosphere.Textiles - Do will insects rodent protection. Packages of steel - Covered accommodation protection from moisture. Chemicals - (a) Storage of various according to the nature of chemical. (b) Costly items. (c) Affinity with other chemicals.

Creation of storage space and construction of godowns need heavy capital investment and therefore these decisions are taken most judiciously making all efforts for optimum utilisation of storage space and godowns. Aim should be to effectively utilise the cubical space.11. Layout of Railway track and construction of platforms -In the present days railway facilities are used in most of the cases for receipt & issue of bulk of the items. For this purpose in most of the industries the railway track arc laid down inside the Factory where locomotives can directly carry the wagons to the destination.12. Transportations -Transport facilities are planned for the following purposes:a)Receipts and despatch of railway wagons from the factory.b)Shifting of materials from unloading point to respective godown.c)Transportation of materials from issuing section to loading point.d)Transportation of materials from godown to consumering sections.e)Collection and despatch of materials from Riy. Sstn.f)Collection and despatch of items from Road Transport Companies.g)Collection and despatch of Items from contractor's premises and other sister factories. Embarkation etc.13. Weighing Arrangement-It is essential to weigh the incoming and outgoing materials. For this purpose wagon weigh bridges, road weigh bridges and weighing scales are provided.14. Material Handling Equipments and Accessories- Objectives - the following are the objectives:a) To reduce the cost of handling.b) To economise on the storage space.c) To reduce manpower deployed.d) To maintain good house keeping.

15. Functional set up-The functional set up of storage management is as under.a) Receipt of Stores and related accounting & Railway siding.b) Issue of Stores and related accounting.c) Stock and disposal of stores and related accounting.16. Functions-In Ord. & Ord. Equipment Fys., the whole functions of store are divided into four parts:(A) Store (Issue) (B) (Receipt)(C) Store (Stock)(D) Store (Disposal)

---,A. STORE (RECEIPT)For convenience of field work and office works, it is divided into Receipt Office a Receipt Bond and also siding. The basic functions for Receipt Office and Receipt Bond are as under

To receive and collect materials. To check quantity, compare with despatch documents/packing list viz-a-viz S' A/Ts, IFDs or any other concerned authority and prepare Ml Slip. To put material for inspection and provide facilities for inspection. To prepare receipt voucher on clearance of MI Slip inform all concerned for further action. To regularise quantitative discrepancies. Discrepancy Report for discrepancies in qty. on receipt. Making Riy. and Transport Claims. DD Ur and loss Statement for transit losses. To make correspondence with the firms / fys. till their settlement. To return rejected stores to concerned fys / firms. To release 2&5 of the I Notes. Redirection of stores received in economy wagons to other factories / units. Payment of demurrage warfage & regularisation. Linking up of consignor's issue voucher. CRV for rental charges.Arrange unloading of materials received in full wagons and deal with matters connect with railway.B. STORE (ISSUE)For the convenience of functioning issue branch also divided into Issue (Bond) & Issue (Office) the Issue branch deals with the issue made to out side the Factory. Important functions are - To issue materials by full wagon load, full truck load, post parcels, part truck-load, part wagon load etc. after making RR/Dispatch documents against P vouchers or vouchers. To prepare issue voucher. Linking of issue voucher with 0 voucher/1 note. Forwarding of issue Vr. RRs to consignee immediately after despatch. Maintenance of loan register. Preparation of Military Credit Notes; Packing of stock Items for dispatch. Return of rejected stores to consignor. Preparation of Gate passes for items issued outside the factory. To obtain receipted copy of the issue voucher from the consignee. To obtain payment against payment issues. To have correspondence and settle discrepancies. To arrange wagons, trucks and other modes of dispatches.C. STORE (STOCK) Stocks arc maintained under following six categories. Regular stock for which LFs exists. Deposit stock. Stockpile stock (they are treated as capital stock). Nominal stock pertaining to items for which there is no ledger folio. Machinery Capital stock. Stock against production work order series.Oi'ihitiiifi' f-nclwy In-miiifc of Learning. KciiipiirAccounting A Di.'i/w.'nil

Functions of Store (Stock) To collect material from receipt Bond platform etc. to respective go down or receipt of receipt voucher from receipt office. To count/weigh stock at the prescribed place and enter into the bin curds. Issue against authority of demand note, nominal demand note, issue voucher etc, and post these issues in the Bin cards . Carrying out preservation and care and custody of stores to avoid deterioration /pilferage in storage. To rotate materials and maintain principle of first out (FIFO). Identification of Slow and non moving items. Raising of Examination orders (BOs) for the items having limited shelf life for periodical inspection. Arranging departmental and OFBs Stock verification. Investigation and regularization of discrepancies. To take materials on stock charge against return Notes Numbering of documents.D. STORE (DISPOSAL)Disposal is reverse of procurement. The purpose of disposal is to timely dispose of the unwanted materials, scraps generated during production old and outdated P & M (BER) etc for the purpose of generating revenue. For disposal guidelines is being issued by OFB time to time & Factory follows it accordingly,

17. MATERIAL INWARD SLIPS

This is the most important stores accounting documents preparation of MI Slip is (June in the following cases. All receipts handled by Receipt Branch of Stores Section. All receipt, which though not handled by the Receipt Branch but arc to be taken on Stock/Deposit Ledger. All receipt' which arc not initially handled by Receipt Branch like postal parcels But later they re to be. taken on Stock/Deposit Ledger charge. Exemption for preparation of Ml Slips: -The exemption is only in the following cases: Material is not received by Receipt Branch of Stores Section. The material which is not brought on Stock/Deposit Ledger charge.Responsibility for preparation- of Ml SlipsThis is the basic responsibility of Receipt Branch of Stores Section to prepare MIS. Date of MI Slip - This is the actual date of arrival of the material in the factory. However in case of materials received by post, it is the dale on which the Receipt Branch actually received the material. In no case, the dale of preparation of MI Slip is taken as date of MI Slip. Sl.No. of Ml Slip is maintained as per date. However, in case of difficulties, dates over - ride the material numbers. Blank numbers arc not permitted in the Sl.No. of MI Slips. No. of copies. Depending upon requirement, 7 to 8 copies arc prepared. All the details except Inspection and pricing columns of Ml Slips arc filled in by the Receipt Branch of Stores Section. The MI Slips are required to be prepared within 24 hours of receipt of the material and to be sent to Quality Control Deptt. for sentencing after inspection of stores. The Ml Slips are sent for inspection to Quality Control Department. Quality Control Dept. is required to carry out inspection and sentence the MI Slip within 7 days of receipt. It also mentions the quantity accepted and quantity rejected. On receipt of the sentenced copies of the Ml Slip, Receipt Voucher No. is allotted lo it and it is sent to the Stock Branch for posting. The above copies are then sent to local Accounts through IBM punching media for producing and posting in the Ledger.18. STOCK PILE

Stock pile is nothing but (lie danger stock. Drawal from this is permissible only after testing approval from DGOF/OFB. Conditions Tills should satisfy the following condition. It should be non-perishable. Should be of imported origin not normally available in India. Or difficult to obtain quickly in India. Provision of Fund - Funds are provided under Major Head, 86 . Defence Capital Outlay. Quantum of Stock pile- Stock pile stock is kept as per the following norms. Indigenous items-4 months' requirement. In order to-reduce the inventory, most of the Factories Imported items-9 months' requirements are not maintaining stock-pile at present. Condition of Stock - The items are turned over from lime to lime to avoid deterioration. Capital Store Ledger is maintained by Accounts for Stock-Pile items. For this purpose 'R' series of vouchers are operated by the factory for the transaction of Stock-Pile items. Transfer of materials between Stock-pile and working stock is made on transfer vouchers. For use of Stock-pile items, they are first transferred to stock and then issued to the section on Demand Note. The turn over of Stock-pile items is also made on Transfer Vouchers, The stoke-pile material is taken into use in emergency under intimation to DOOF for regularization by ex-postfacto-saction, Replenishment of stock-pile transferred to working stuck on replacement basis

A register is maintained like Loan register by the Factory to give the following details. Stock L. F. No. Nomenclature of store Accounting Unit Qty. transferred from Stock-pile Authority for transfer No. & Date of transfer voucher Expected date of replenishment No. & Date of TV for replenishment of Stock-pile Remarks

19. STOCK VERIFICATION Generally three types of stock verification are done in Ordnance Factories:a) Perpetual stock verification by DGOF/SV group. b) Internal stock verification by Factory staff & Officers. c) Annual stock taking of UIP, FG & Non-consumable inventory items. In addition. Security may also verify the stock as surprise check. The DGOF Stock Verification Group is administratively controlled by DGOF but functionally under Sr. GM/GM. This group is responsible for the following. Drawing programme of Stock Verification. Allocation of work to stock verifiers. Maintaining progress details. Intimating OFB regarding progress, discrepancies etc. Procedure - Scope - This group carries out physical verification of stock, deposit stock item, inventory articles, machinery building, electrical installations and medical stores borne on factory's books. All items arc verified at least once in a financial year.Stocks of valuable items are verified at more frequent intervals with the approval of 0FB. For this purpose, a list of such items is jointly prepared by the factory and OFB Stock Verification Group. Methods of verification - Verification is carried out by the following methods > Actual Counting. Weighment. Measurement. Other methods like assessment etc.

Loose and bulk items - Loose bulk items like coal, coke, rubber etc. are required to be stored in bins or stock of sufficient size to facilitate measurement by cubical content. Normally stock verification of an item is carried on when it is at the minimum level.Internal stock Verification In addition to the above minimum 10% of the items are verified by the concerned ASK of the go down. Stock taking sheets are prepared and discrepancies are required to be settled as per procedure. Annual progress report is sent to OFB on the above stock verification.20. DISCREPANCIES IN STOCKThere are four types of balances:a) Stock ledger balance - This is the balance shown in the ledger.b) Ground balance - This is the balance found on physical verification.c) Bin card balance - This is the balance shown on the bin card.

d) Unorthodox balance. It is necessary thatThese balances on stock ledger, physical and bin card are in agreement.There is no unorthodox balance i.e. there should not be any balance physically available other than the ledger balance.Any discrepancy in the above balances should normally be corrected within a period of three days of detection.

Detection of Discrepancies:

The discrepancies come to notice as a result of the following. Departmental stock verification group. Internal stock verification by factory staff. Posting of full invoiced qty. as per procedure in vogue though there is a short receipt. Finding of an unorthodox balance in the stock ledger. The discrepancies are dealt with by making out the discrepancy voucher portion of IAF (Fac) 144 or IAF (Fac) 145.

IFA (Fac) 498 is prepared in the following cases of discrepancies:

i. due to change of condition posting in stock ledger is not required to make the balance show the facts.

ii. The documents are numbered as a regular Stock Receipt Voucher or a Regular Stock Issue Voucher as the case may be.iii. The documents are signed by the officer for authentication.iv. The documents are sent to Accounts for pricing and posting in the priced ledger in the normal way after the original receipt voucher to show the discrepant quantity being passed on to them.v. These documents arc treated as "Suspense transaction" till settlement.vi. Above vouchers will be kept in a register till it is cleared by LAO.vii. Clearance of vouchers- The voucher will be cleared in the following manners: By the sanction of loss/ surplus statement by competent authority.ORNo loss/surplus statement is involved.a) Settlement of Discrepancies -The discrepancies arc settled in the following Submission of sanctioned loss statement. manners.b) Submission of sanctioned surplus statement. c) Finding of old document of transaction to regularise the discrepancy.d) Payment by supplier for discrepancies in transit for which supplier is responsible. Supply of short/discrepant material by the supplier.e) At the time of final posting there is posting of identical amount simultaneously on receipt and issue sides of the lodger by Accounts so that there is no effect on balance facility.f) Discrepancies noticed in stock should be finalized with in the same year,

21. CARE AND PRESERVATION OF STORESThe main objectives are following:a) To maintain the serviceability of the items during storage so that there is no hold up in production at the time of actual requirement.b) To avoid loss to the state due to deterioration in condition of the item.c) To enhance the shelf life by proper storage.d) To avoid corrosion, deterioration, evaporation etc. due to environmental conditions.e) To ensure the principle of "First in First our" and rotation of stores.f) Inter service stores preservation organization now converted to defence material & Stores Research and development Establishment with Hqrs at Kanpur formed by the Govt. is responsible for safeguarding defence stores form damage of biological and non biological agents.g) The above Establishment issues recommendation regarding methods of

preservation of stores to avoid any deterioration to stores or in transit. Standard recommendations are published through ISSP (Indian Standard Stores Preservation) Technical Bulletins and literature is circulated to all factories.Any type of losses in the material held in stock viz tosses due to the Fy. & fraud or negligence deterioration due to corrosion/erosion, Ageing or by any over causes, shall be regularized by making a loss statement on form no-IAFZ-2071 by taking sanction of the appropriate authority.Storage accommodation -Storage accommodation should be closely related to drainage and dunnage. This should consist of well ventilated permanent sheds with pucca level flooring, free from cracks, pervious floor.Dunnage-i. Dunnage should be made to provide a firm and stable base for the stores.ii. Prevent moisture from the ground/floor reaching the stores.iii. Allow proper ventilation beneath the stock and facilitate ventilation also in the stock.iv. Provide proper cleaning and thereby clearing Potential or actual centers of infestation.v. Inflectional cases, (prevent white ants from attacking stores).vi. Periodical inspection.Stores Hygiene-i. Cleanliness.ii. Segregation of infested Stores.iii. Disinfection of godowns.

PRESERVATION OF COMMON ITEMS IN STORAGE

Sl.No.

Items

Method of Preservation

Sled sheet

Application of mineral oil grease on the surface. Storage in covered accommodation to protect against rain and water.

2.

Rubber goods

Protect against heat and light. Apply French chalk

3.

Fuels

Use proper bunks with washers to avoid leakage and evaporation. Avoid rough handling to avoid leakage of containers. Stack properly (vertically) Use rust-free and dry containers. Fire protection devices to be kept nearby. Follow principle First in first out'.

4.

Paint

Same as for fuel. Roll drums to avoid sedimentation on periodical basis. Utilise within the shelf life.

5.

Petroleum

Use proper underground storage lank. While storing on ground store over sand. Do not allow smoking or lighting of fire. No inflamable material to be stored nearby. Other precautions-same as for fuel.

6.

Drugs

Use cool places as per directives. Protect from sun light, rains. Follow principle of first in first out. Use within shelf life otherwise destroy. If poisonous - keep under lock and key.

7.

Wooden shelves and handles of timber items

Treat within 20% mixture of raw linseed oil on half yearly basis.

8.

Plywood and plywood items.

Spray 10% solution of copper napthenatic in while spirit/kerosene oil of superior quality on nil sides.

9.

Wooden blocks structural limber ballies/sleepers etc.

Soak in 50% mixture of creosote oil and used engine oil at about 20c for 1 5 to 20 minutes.

10.

Woolen items

Soak in a solution of 1 gm of martins yellow in 3 Ltrs of water. Soak in 5% solution of DDT in petrol or white spirit.

11.

Brushes with animal bristle

To be packed with naphthalene powder.

12.

Cotton items, jute twin etc

Expose to heat of sun for 8 to I 0 hours at least.

13.

Silk Nylon etc.

Expose to heal of sun for 8 to 1 0 hours after monsoon or Use hot air disinfector for 45 to 60 minutes,

14.

Leather items

Use protective coating of Dubbin/preserval S.-bilamil.

15.

Soles of shoe, Boots Chappals etc.

Use protective coating of soap yellow. Do not use dubbin for this purpose.

22. STOCK LEDGERS These are maintained by Accounts office. The purpose of stock register is of show up to date position of all items held on regular stock. The factory opens the ledger sheets whenever there is introduction of a new item. Similarly dead ledger folios are removed by the fy. Store transaction documents are posted in the ledger by the representative of Accounts immediately when the transaction takes place. Stock ledger stock should always be in agreement with bin card balance and ground balance. These colour codes are followed by painting the ends of the rod strips with the paint of pecified colour.23. Stores Accounting Documents. All the transactions of stores are required to take place through stores Accounting Documents only to monitor control of them. Categorization -They are categorization as under Regular. Nominal

Primary Store Accounting Documents.The following arc called primary Store Accounting Documents.Documents :Form No. Demand NoteIAFO 1926 Return Note.IAFO 1927 Examination order IAF (OG) 1-7 Material inward receipt, Inspection reportand ledger posting voucher (MI slip) IAF (Fac) 151 Bin card Receipt issue and expense voucher.OFK.1 Discrepancy report. IAFZ 2096 Discrepancy (Deficiency Voucher and loss statement Store ledger cum provision sheet.IAF (Fac) 14424. Utilization of store Accounting Documents-

SL. NoParticularsDocuments used

1. Receipt from outside the Fy.Material Inward Slip (MI)

2. Receipt within the Fy.a) Receipt voucherb) Return note.

3. Issue within the Fy.Demand Note

4. Issue outside the Fy.a) Issue voucher fro stock item.b) P/O issue voucher for production item:c) Sale release order.

5. Regularizationi. Receipt issue & expense voucherii. Discrepancy (deficiency) voucher followed by loss statement.iii. Surplus work order.

For the regular transactions regular voucher are used. In case of transactions which arc not routed through the ledger nominal VOL113hers are used.Average Kate -For the purpose of pricing average ledger rate -which is different from actual rate quoted in receipt or issue voucher value are struck in the ledger at the end of every month and averaged rate is arrived at dividing the total value by every entry with total quantity. The issue vouchers, demand note etc. during the subsequent month arc priced at the above rate. This rate is called weighted average rate.

25. Colour Co-dification of Primary Stores Accounting Documents. In Ord. Fys. ABC and XYZ technique have been introduced for inventory control: In order to give importance to the primary documents pertaining to AIX category items separate colour code has been introduced for them as given below;Sl.No.

Documents

Cat. AItems

Cat. B & C'Items

1.

Receipt Voucher

Green

White

2.

Issue Voucher

Blue

White

3.

Demand Note

Blue

White

4.

Return Note

Green

Red.

5.

Material Inward Slip

Green

White

6.

Discrepancy (Deficiency Voucher) & Loss Statement.

White

White

The above system ensures speedy clearance of stores transaction documents and their posting in ledgers, it also helps in maintaining the ground condition close to the ledger conditions.26. Linking of documents -Important areas arc given below(A) OUTSTANDING ASSETS From the point of view of Finance, these stores for which the payment has been already made but they have not been brought on stock charge as per store ledger cum provision sheet are the assets yet to be received by the factory. Hence they arc known as" outstanding assets." Issue vouchers of Sister fys. (Feeder fty) are linked with the corresponding receipt vouchers. Unlinked cases are termed as "Outstanding assets. The following cases also tall under these categories. Spot payment. Advance payment - (90%, 95% & 98%) against proof of inspection and dispatch. Provisional payment. This is monitored by clearance and posting of MI slips /receipt vouchers. For an efficient stores Management outstanding assests should be minimum. This helps in speedy clearance of MI, slips, reducing time lag in bringing materials on stock charge and posting in ledgers, speedy clearance of contractors bills for payment, minimum discrepancies in ground condition and ledger position and minimum audit objections.

(B) OUTSTANDING LIABILITIES From the point of view of Finance those stores which have been brought on stock charge but they cannot be priced and their cost cannot be debited due to nonavailability of Issue vouchers of the consigner fy. are called outstanding liabilities.' In short these are the cases where liability of the fy. is not known against stores already received. All the receipt Vouchers arc linked with the corresponding issue vouchers of consignor fy. Unlinked eases, Le. where issue voucher of consignor fy. is not available pertaining to a particular receipt voucher is called outstanding liability. Receipts from other sources without the adequate authy. of contract linking vouchers etc: also fall under this category. Minimum outstanding liabilities is an indication of efficient and timely flow of document from sister Fys. and other suppliers. This helps in maintaining ground conditions close to the ledger positions. This is monitored by clearance and posting of MI slips/vouchers. (C) OUTSTANDING ISSUES Issue Vouchers arc linked with the receipted copy of the Issue Vouchers. Unlinked cases are called out standing issue. This is watched by .Finance due to the following reasons: It shows that the consignee has received the goods. There is no discrepancy. The consignee has accepted the liability of payment. The transaction is treated as closed only after linking of the receipted copy of the Issue Voucher. Unorthodox Balances -In store ledger cum provision sheet some limes following peculiar situation arises; timer: Bin Card stock Nil & Total value exists, or Bin Card stock exists & Total value is Nil, or Bin Card stock is negative, or Total value in ledger is negativeThe above cases are called unorthodox balances. They may arise due to the following reasons:-

(a) Non posting of vouchers / primary document.(b) Incorrect pricing of vouchers.(e) No arriving at the weighted average rate after each entry. By this, the receipts arc priced at the rate an issues are priced at the old rate, therebt cost of production is under priced unorthodox balances are considered symptoms of poor accounting.These balances are regularised at the end of each financial year. (D) NOMINAL TRANSACI IONS All the transactions of receipt and issue which are not made through regular "Store Accounting Documents' are called nominal Transactions Documents. The Transactions of above nature are not routed through the store ledger cum provision sheet and priced ledger maintained by accounts. Hence this leads to distortion in the ground condition vis-a-vis the position shown on ledgers. The nominal transactions are settled by preparing regular vouchers and cancelling the nominal vouchers,(E) LOAN TRANSACTIONS Issue Office maintains an account of stores issued on loan in a register called Loan Issue Register". Security Office also carries out counter check on the above transaction with the help of "outstanding gale passes pending regularisation". The concerned parties are periodically approached from them. In case of issue to Sister Fys., the transaction is also settled by obtaining IFD and preparing corresponding regular issue voucher.

(F) TRANSIT DISCREPANCIESSettlement of Railway claims:This falls under transit discrepancies. When there is a discrepancy in quantity or quality of materials despatched against clear RR open delivery is taken and the claim is preferred on the Railways for the loss occurred in transit. Normally Railway Authorities disallow certain portion of the claim like taxes, packing charges, etc. These are regularised by preparing a loss statement. Similar procedures are followed when the goods are received by road transport. Timely action in this area saves losses to the Govt. and helps in speedy clearance of Ml Slips, posting of documents and settlement of outstanding assets. 27. REGULARISATION OF LOSSESThe loss of the stores may take place in the following manners.(a) Transit Loss.The loss may be of two types.(a) Partial.(b) Full.(b) Loss in Storage.This may be due to following reasons Loss Statement is required. Mishandling, improper storage etc. Deterioration within shelf life. No loss treatment is required. In case of Deterioration after expiry of shelf life: Accidents, fires, flood etc.(c) Loss due to theft, fraud or neglect.

(d) Regularisaiion of Losses -In all the above cases the procedure followed for regularisation recovery of tosses is shown in the table giver below.REGULARISATION OF LOSSES

SL.No.Category of lossMethod of RegulationForms used

1. Transit loss (a) partial(b) Full1. Prepare discrepancy report in form No.2. Recover from Rlys/ Transport agency by preferring claims.3. Recover from Contractor is Claims disallowed by transport agency.4. Send discrepancy report to consigner factory to accept responsibility of loss.5. Write off the loss not accepted by transport agency/consigner by preparing D(D) Vr. Loss statement and CVR.No. -30 FAFZ-30 D(D) Vr. F. No. IAF-144 CVR from IAFZ 2096 (large)

2. Loss in Storage. Not due to theft fraud or neglect(a) Leakage, evaporation etc.(b) Mis-handling, in-proper storage etc.

(c) Deterioration within shelf life(d) Deterioration after expiry of shelf life.

(e) Accidents, Fire Flood etc.1. Prepare CVR if loss is within specified limits Prepare D(D) Vr. Loss statements and CRV loss is beyond laid down limits Prepare DC (D) Vr. Loss statement and CVR to write off the loss.

(i) Prepare D(D) Vr. And regularize through CVR.(ii) No loss statement is required.IAF- 14

IAFZ 2096(large)

-do-

-do-

3. Loss in storage due to theft fraud or neglect(i) Appoint Board of enquiry.(ii) Recover from the individual found responsible.(iii) Prepare D(D) Vr. Loss statement and CRV if loss is not recovered.

-do-

(c) No loss statement is prepared in case of loss in storage mentioned in para No. (d) 2 (b) and (d) 2 (e) and the discrepancy is regularised by preparation of expense voucher.(f) In case of loss due to theft fraud and neglect an enquiry is ordered and the loss is recovered from the defaulter. However if responsibility is not fixed D(D) Vr. and loss statement are prepared to write off the loss and the quantity is charged off through CRV. (g) In all the above cases the loss is priced by LAO and sanctioned by CFA as per their financial powers. 28. MATERIAL HANDLING EQUIPMENTThe material handling equipments are generally divided into the following main classes:(a) Horizontal fixed path type.(b) Vertical Movement type.(c) Fixed area type.(d) Overhead movement type.(c) Flexible path (or non fixed path.) type.a) Horizontal Fixed path type Equipments Belt Conveyors. Wire Gauge conveyors. Gravity roller conveyors. Slant conveyors. Apron Conveyors. Powered Roller Conveyors. Drag Chain Conveyors. Trolley conveyors moving on channel track or Rail track. Vibrating conveyors. Closed channel Conveyors.i) Screw Conveyors.ii) Pneumatic tube conveyors.b)Vertical Movement type equipments Package lift elevator. Bucket elevator. Derricks and Booms. Hoists. Revolving crimes. Mobile cranes. Fork lifts. Spiral chutes.c) Fixed Area Type Equipments. Revolving cranes. Derricks. Travelling Bridge Cranes. Gantry Cranes.

(d) Overhead Movements type equipments. Mono rail conveyors. Cable ways. Overhead Chain Conveyors. Overhead Cranes. (e) Flexible Path Type equipments. Two Wheelhand trucks. Three Wheelhand trucks. Powered fixed Platform trucks. Industrial tractors. Fork lift trucks. Side Leading trucks. Straddle trucks. Dumper trucks. Equipment of Handling Equipment & ManpowerWhen calculating requirement for equipment and man Power one has to be aware of the fact that the materials handling plan will have to operate under a number of different conditions. While equipments, we must make adequate provision for maximum, worst condition and severe conditions or peak hour conditions.

DISPOSAL1.Disposal is an effective function of material management which mainly serves the following purposes - To clear the blocked up capital and obtain as much revenue as possible for more useful purposes. To vacate the storage space occupied by these items, so that the same can be utilised for storage at other items. To bring them in the area of utilisation from the area of non-utilisation by making them available to other organisation/contractors who need them.2. CATEGORISATION OF ITEMS FOR DISPOSAL -The items for disposal arc normally categorised under the following heads:

Surplus serviceable items not required by the organisation or in excess over the permissible stock limit. Unrepairable stores. Unserviceable items. Scrap-generated as by product or production like brass scrap, copper scrap, aluminium scrap, saw dust etc. Unserviceable plant & Machinery. Waste products like coal ash, cinder ash, saw dust etc. Obsolete- store is declared obsolete due to technical inefficiency or superserion due to improved/equipment stores. Obsolescent-No further provision of such items is made due to development of superior equipment.3. FINANCIAL POWERS OF GM FOR DISPOSAL

S.N.Nature of PowerAuthorityExtent to which delegated

1. Disposal of surplus stores scrap and plant & Machinery

StoresA-Declaration of Surplus

i. ServiceableGMFull power in respect of drums/Containers/package and for other cases Rs. 50,000 in each case subject to clearance by the technical team.

ii. UnserviceableGMRs. 5 Lakhs/case

-do-JT.GM/DGMRs. 2 Lakhs/case

iii. Scrap. Swart & waste. ProductGM DGM/JT.DMFull subject to technical clearance. Rs. 5 Lakh/case

iv. Plant Machinery (Unserviceable ie beyond economical repair)GMFull Power (Before declaring any item of P & M as unserviceable & surplus. All avenue for its cost effectiveness, reconditioning etc. must be explored.)

StoresB-Disposal

i. Serviceable GMFull powers in respect of drums/containers packages and for other cases Rs. 50,000/- in each case, subject to clearance by the technical team.

ii. UnserviceableGMJTGM/Dy GMRs. 5 Lakhs per caseRs. 2 Lakhs per caseFull power

iii. Scrap swart waste productsGM DGM/JTGMRs. 5 Lakhs per case (Book value)

iv. Plant & Machinery (Unserviceable ie beyond economical repairs)GMRs. 40,000/- (book value)

v. Walval of ground rentGMRs. 10,000/- in each case

vi. Sanction of demurrage & warfageGMRs. 5,000/- in each case

(C) Regularization of losses

i. Losses of store due to Theft, fraud of neglectGMRs. 10,000/- per case subject to convening Board of Enquiry to investigate the loss & compliance of other provision laid down In F.R. Pt.-1.

ii. Loss of store not due to theft, fraud or neglectGMRs. 50,000/- in each case subject to half yearly report being sent to OFB and Convening Board of Enquiry to investigate the loss and compliance of other provision laid down in E.R. Pt.I

JT. GMRs. 5000/- per case

Agency for Disposal of the Items Issue to other ord. Fys./OMD/PSU through MAS (OMD - Other than Military Department). Through Auction (Departmentally) or through MSTC). Through Tender. Issue to private contractor for the conversion into raw material/finish products required by the Fy.

Notes:-(i) The disposal shall be effected by public auction/open lender. Limited tender may be resorted to with proper justification with the prior approval of Board/ concerned Member.(ii) Rate/Running contracts may also be concluded with the prior approval of Board/ concerned Member.4. REVIEW OF SURPLUS ITEMS FOR DISPOSAL Review of surplus items for disposal involves scrutiny to ascertain prospects of alternative utilisation on re-ulilisalion after carrying out certain modification/ processing etc. This review is carried out in the following manner. Within the factory-A committee is formed in the factory which carries out review of surplus items once in every six months. This committee is assisted by stores Branch as well as Material Control Office This committee tries to ascertain the area of alternative/ rcutilisalion of these items and declares the surplus for disposal only when no alternative utilisation could be found. Technical Team- Technical team is formed under the Directives of Director General of ordnance stores (D.GOS). This team consists of the Reps of different depots/departments of Defence organisation Ordnance Factory Board and factory concerned. They jointly review the items declared as surplus by the factory and try to explore possibility of utilisation by any other sister factory/Military Department Whenever no such scope exists, the team declares them as surplus for disposal.5 AGENCIES FOR DISPOSAL OF THE ITEM Disposal is arranged through the following agencies:6 DISPOSAL BY THE FACTORY General Guide Lines As per instructions, priority should be given for disposal to sister factories. When item are not required by sister factories, then only other modes of disposal are followed. Disposal cannot be arranged by single tender/limited tender enquiries or negotlatings by the factory w/o the specific approval of the 0. F. Board. In case of disposal by advertised Tender Enquiry, it is essential to accept the highest offer only. In case of taking any other decision sanction of the O.F. Board is required. As per the latest instruction issued by OFB for disposal of N911 Ferrous scraps/waste etc. within the financial year only one mode to be adopted I.e. cither through OTE or through Auction. Normally all the store/scrap valued Rs. 50,000/" in each case should be disposed by public Auction. In case of waste product the limit for Auction sale will be Rs. 1 lakh in case/lot. Tender sale should be resorted for items/lots in excess of above financial ceiling. Under M/D let No. PC No. 6(z)/76 D prod. Dt. 9.5.78 it has been laid down that 30% of all copper & copper based Non ferrous scrap & alloy shall be reserved for disposal in lots of 1 to 5 M/tons each to S.S.I, units & further 30% of the available scrap shall be marked for bonafide export units. It should be kept in view that a price preference of 10% over the highest tendered rate is admissible to the registered small scale limit. The same price preference may be allowed to small scale, Invent of any qty. out of the above allocation not being disposed off to the entitled categories. The same will be added to the quantity for disposal to the firms in general. 7DISPOSAL BY PUBLIC AUCTION -While carrying out disposal by public Auction, the following steps are taken:i. Fixing of Reserve guiding price; A committee is appointed by GM for fixing the reserve guide price. Two Fy. Officers & one AO. The team fixes the price of a lot by taking into consideration of the following factors:a) Book value of the itemb) b) Highest bid received in the last Auction if the hem was put up for disposal in the past c) Present condition of the item d) Present market price of the itemii. Government Auctioneers: Auctions are arranged through govt. Auctioneer For this purpose a list of Govt. Auctioneers is maintained by the factory, and each auctioneer is given a chance by rotation in his turn.iii. Supervision of Auction: For this purpose, supervising officer is nominated by GM. Who supervises the auction on behalf of the GM and gives decision regarding acceptance/ rejection of the bid on the spot and signs all documents on behalf of the GM. /Govt. of India.iv. Supervising officer may be authorized by the GM in writing to accept, the bid upto 10% below GM can accept 20% below the reserve guiding price.v. Representatives of Excise Deptt., Sates Tax Authorities, Security, Inspection Deptt. Accounts etc. also attend auction to give suitable guidance/ instructions in the matter falling under their purview.vi. Successful bidders are required to deposit 25% of the total value immediately to Govt. auctioneers on acceptance of the bid. Govt. Auctioneer will deposit this amount in nearest RBI or SBI through MRO- MRO is made in four copies original + Duplicate - Returned to Factory Triplicate copy - Kept by RBI Quadruplicate copy - Kept by Auctioneers.vii. Balance payment of the bid is required to be made by the bidder against MRO within six working days of the auction.viii. Bidder is required to lift the material within 21 working days of the auction. This lime limit can be extended before the auction with the approval of supervising officer.ix. Entry of Bidders is controlled by the security. Bidders may enter the factory against the gate passes to be issued by stores section, on payment of Rs. 10/-.x. Ground Rent: In case of failure of the bidders to lift the material within the stipulated period, he has to pay the ground rent at the rate of 2% per week of the cost of unlifted material.xi. Belated payment in case of failure of the bidders to make the payment within the stipulated period he has to pay penalty at the rate of 10% of 1% of value per day (i.e. 0.11% of value).DISPOSAL BY ADVERTISED TENDER ENQUIRIES -The following special instruction are followed in ease of disposal by advertised tender enquiries :i. Tender enquiries are issued in the prescribed proforma only. Normally 14 days arc allowed for DAVP to publish the advertisement in leading Newspapers.

ii. Last date of issue of* Tender forms to the interested parties is fixed as the 44lh day from the dale of Issue of advertisement to DAVP.

iii. The lenders are received upto 2.30 pm of the 45th day of the date of issue of advertisement to DAVP and the tenders are opened on the same day at 3.00 pm.

iv. Only those contractors are allowed to witness the tender opening etc who have participated in the disposal offender enquiry.

v. Existing Instructions arc that in case of disposal the tender should be complete in all respect and it should be on the prescribed proforma.

vi. The tenderers are required to submit 5% of the total cost of their bid as earnest.

vii. Money along with the quotation, in the form of call deposit or treasury receipt.

viii. Late quotations in these cases are discouraged.

ix. Comparative statements of Tender are prepared based on the quotations received and decision for placement of disposal contract is taken as per various rules in vogue within a period of 30 days from the date offender opening.

x. The highest acceptable offer can be accepted by the GM. In case of taking any other decision the matter has to be referred to OFB.

xi. The successful tender has to des posit security deposit at 10% of the total value of the contract before release of disposal of contract.

Note: Complete instructions in disposal procedure are contained in OFB letter

No.212/2/MM dt. 15-6-81.

10. DISPOSAL COMMITTEE -In case of disposal, the value of the item is very large. In order to exercisemonetary control and also to safeguard the interest of Govt., disposal committee isformed which is composed as under:i. Chairman - GM/AGMii. Rep- of LAO - memberiii. Rep. of Store Sec. memberiv. Rep. of Provision Office memberv. Rep. of Work Inspection Office membervi. Any oilier member as considered necessary.DISPOSAL OF FERROUS SCRAP -As per Ql''3's directive issued in June 1985, disposal of ferrous scrap is arranged through MSTC. The following procedure is followed in the above case. Steel Scrap Class 'A' and 'B' are disposed off by the factory only. In case of other ferrous scrap, the value should be above Rs. 50,000/. The type of scrap with details of quantity and specification is intimated to MSTC. Tender Enquiries are issued by MSTC and CST is sent to the factory for recommendation. Disposal contract are concluded by MSTC based on the recommendation of the CST. Payment towards the sale value is accepted by MSTC and they issue sale release order to the contractors for the Issue of the scrap. Sales tax and other taxes are collected by the factory from the contractor before issue of the scrap. Issue of scrap is made as per disposal instructions of MSTC. Discrepancy if any arising out of the contract is settled by MSTC.Disposal committee carries out the following functions:I. Scrutiny of the tender enquiry before sending to DAVP regarding terms and conditions etc. to avoid disputes at a later date,II. Scrutiny of quotations received and recommending the contractor on whom disposal contract should be placed.III. Supervising progress of disposal contract and giving suitable advice to the disposal Group of provision office and Stores Section from time to time. In certain cases. Disposal implementation Committee is formed. The functions of Disposal Implementation committee is to ensure that the materials arc lifted by the Contractors as per terms of contract. This committee also settles disputes which may arise during the execution of the contract.* ***