10.stores Maangement

Stores Management 

It is serving facility, inside an org., responsible for proper storage of the material and then issuing it to respective departments on proper requisition. The custodian of stores is generally known as store-keeper or store controller

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Those item which are not in use for some specific duration e.g. spare parts and the raw- materials are called as stores and building space where these are kept is known as Store Room

“As per Maynard” “The duty of store keeping are “to receive materials, to protect them while in storage from damage and unauthorized removal, to issue the materials in the right qualities, at right time, to the right place and to provide these services promptly and at least cost”

Stores System 2. 3.

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CLOSED All materials are stored in a closed/controlled area. No other person than the stores personnel is permitted in the area. Materials can leave or enter the storage area only by authorized documents. Maximum physical security. Tight accounting control of inventory material

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OPEN There is no specific area. Stores are maintained in the form of suitable/ convenient locations. Every individual has access to any storage facility. After the receipt of the material it is delivered to respective department to expedite the production activity. Chances of pilferage high. Less emphasis on accounting control of the material.

Functions of Store-Keeping 1. 2. 3. 4. 5. 6. 7. 8.

Receiving, handling and speedy issue of material. Custodian of goods I store against damage and pilferage. To ensure regular supply of materials . Effective utilization of store space. To provide service to the organization in most economical way. To keep the details of the items available in store up to date. Proper identification and easy location of items. Physical checking of stocks.

Objectives of Store-Keeping     

Easy location of the items in store. Proper identification of items. Speedy issue of material. Efficient utilization of space. Reduction in need of material handling equipment.

Duties of Store- Keeper 

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The items in stores shd. Be placed in such a way that these can be easily located. To maintain the store premises neat and clean. Efficient and effective service to the org.

FUNCTIONS 

RECEIVING

OUTSIDE SUPPLIERS

INTERNAL SUPPLIERS

OUTSIDE SUPPLIERS 

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On dispatching items, suppliers normally send an advice note to the stores showing date of dispatch, carrier details, description of the consignment and the value of items. This ensures quick and easy clearance of bills etc. The purchase copy, suppliers note and transporter information/ consignment note enables the stores manager to organize and plan for expeditious clearance of materials and minimise cost

INTERNAL SUPPLIERS 

Whenever materials are received from internal divisions or returned from user departments transfer notes and returns to stores documents are usually used for this purpose.

2. STORES SECTION 

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This is a place where all materials received by stores department are kept with protection against deterioration. Various stores operation are:- LOCATION, PROCEDURE LAYOUT EQUIPMENT and IDENTIFICTAION OF STORES SECTION.

LOCATION IN STORES SECTION:Stores are to provide space to the materials till these are issued to the, respective departments of the enterprise. (b) Working Procedure:- The stores incharge receives the materials from receiving sections along wit goods inward note. The material is classified and coded according to their nature and use. For quick and easy identification of the item’s category, a bin card is tagged with each self. (a)

Specimen of Bin Card    

Card No. Description Date

Stores Bin Card Part No. Location IN OUT STOCK

The bin card contains upto date information about the receipt, issue and balance of the respective item in the stock.

( C ) Layout of Stores Section 1. 2.

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Flexible in arrangement Convenience in physical counting of materials. Efficient use of floor space and height. Minimum handling and transportation of materials . Items used sparingly shd. Be easy to locate.

( D ) Stores Equipment 

A good store is equipped for handling, measuring and weighing the materials. The equipment should be such that stores invt. And operating expenses are reduced.

(E) Materials handling Facilities: There shd. Be proper weighing and measuring instruments at the time of receiving and issuing the materials

(F) Identification of materials in stores 

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Tagging some piece of paper or cloth with the items. Labels may be fixed on the items. The coded number or any other identification mark may be embossed on the items. Painting or colour coding of items.

Methods of Coding 

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Mnemonic Method:- Here alphabets closely associated with name of the item are used e.g. MT can be used for some metallic item. This is useful when few type of items are to be stored. Random Method:- Here both alphabets or numerals can be used randomly. But the method is rather arbitrary. Scientific Method:- The items are divided into number of groups and each group is given some code. Then further sub-grouping is done on the basis of classification of item in any group, its shape, function etc.

Location Coding 

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The location can be identified in terms of the number of the warehouse , row number, column number, rack number, shelf or bin number etc. Location of any item inside the stock can also be decided in three ways:Fixed Location:- Here some fixed place is designated to each class of item. The basis can be like Supplier wise, item wise, utility of the item etc. Random Location :- Items are placed according to the availability space in store at the time of receiving the items. Zonal Location:- like Bulk Zone, Reserve stock, indirect material like spares and consumable items .

3. ISSUE SECTION 

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It handles the issue of materials when required by some department of the enterprise. Materials carry some money value and in order to avoid malpractices and to curb the tendency of waste, the items should be issued against proper requisition. The material requisition is a request to the stockroom to issue materials.

4. Accounting Section 

The accounts section exercises financial control over stores. The goods receipt book is maintained for all arrivals, making the receipt in triplicate, a copy of which is sent to accounts section and other to the store section.

5. Stock Taking Checking 

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This implies physical checking of items in store to see that these are in accordance with the entries of stores ledger. METHODS OF STOCK CHECKING ARE:FIXED ANNUAL INVENTORY:- A special team is deputed to check and count the material inside the stores at the end of each financial year. PERPETUAL INVENTORY:- In this system the stock control department maintain upto date and systematic records of each and every transaction. There is a system of continous verification of stock. The entries on bin card and stores ledger should tally with each other. In case of discrepancies thorough investment is made.

Advantages of prepetual inventory   

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There is no need to stop the production for checking No dislocation in stores operations. Checking is done in a systematic way, thus reducing the chances of errors. Mistakes, discrepancies are spotted more quickly. Important and expensive items can be checked more frequently Facilitates the preparation of interim profit and loss accounts. Avoids excessive inventory maintenance.