Stores Management

An important component of materials management is the storage of materials. Basically the function of stores management is to be a custodian, looking after the items and controlling their flow. This is the component of the materials management with the production department relates directly on a day-to-day or perhaps hour-to-hour basis.

In this custodial and controlling function, the important issue is that of having good information and record system on the (1) incoming, (2) outgoing and (3) remaining items of materials. A good MIS is the heart of stores management.

The various operations related to stores management are:

1. Receiving and inspection
2. Issue and dispatch
3. Stock records
4. Stores accounting
5. Stock taking and checking
6. Stores preservation and
7. Stores arrangement

Receiving and Inspection:

The important duties, here, are that of
(a) checking: suppliers for quantity and quality,
(b) preparing documents: (1)posting to stock records and stores accounts accordingly, and (2) for providing evidence of receipt.

In order to help the stores personnel in the checking function, the stores may be advised about the items requisitioned (what, when, value of items). A copy of the purchase order would generally suffice. The supplier may also for non routine and high value items, send in advance an advice note giving details of goods being shipped, quantity, mode of transport, date of dispatch etc The items when they arrive, may also be accompanied by the supplier’s packing information and the carrier’s consignment note.

On the basis of the checking of the consignment, a Goods Received Note (GRN) is made by the storekeeper. Since this document will be used for settling bills, it should contain all the details such as, supplier name, his advice note number, purchase order number, date and time received, mode of transport, vehicle number, description of the item code, item code number, number and types of packages, shortage discovered if any, damage to the goods if any, excess items if any, and inspected by whom. A separate damage shortage report or a rejection report also needs to be prepared.

Since receiving and inspection operations control the entry point, proper information to and documentation by the stores person is important.

Issues: Since this is the outflow point, the authorization for issue should be proper, carrying’ details such as the code number, description, job number or cost code number for which required, quantity required quantity issued, person authorizing date of issue and value of items issued. Such individual documents is not always necessary for all items, for example issues for assembles or a production batch – where only the number of assemblies or the particular production program may be sufficient for the stores to supply all the necessary materials.

Stock Records: The purpose of record keeping is to facilitate materials control by bringing information to actual stocks position, consumption rates and order and supply position up to-date along with the proper pricing and evaluation of the usage and of the balance of stock. Whether the system is manual or mechanized or a combination of both, the important managerial control should be provided by this stock records system. The management should thus get information on:

1. daily operations of the stores giving details on receipts, issues, direct deliveries etc.
2. stock at each location – flashed at the location as in ‘bin cards’ , and also as a separate information documents
3. allocation of stocks for certain projects or jobs;
4. review and provisioning of stock
5. order performance giving details on quantity ordered, supplier delivery promised progress chasing action, when delivery received etc.
6. stocks consumption history and changes in consumption rates and
7. money value of the movement /consumption of stocks and balances on hand.