Stores ........

where materials are managed

Store Management , Stores Management
The very essence of Materials Management gathers its relevance from Stores , a
place that keeps the materials in a way that the materials are well accounted for and
are maintained safe.

A typical Stores has a process and a

space within, to receive the incoming
materials (Receiving Bay), keep them for
as long as they are required for use
(Custody) and then to move them out of
stores for use (Issue). In a manufacturing
firm this process forms a cycle to maintain
and run the activities of Stores.
The basic responsibilities of stores are
to act as custodian and controlling agent
for parts, supplies, and materials, and to
provide service to users of those goods.
Well-designed systems provide flexibility to
absorb the shock demand variation,
and enable purchasing to plan ahead, practice forward buying, and so forth.
Thus ,the terms Stores, Storehouse, or warehouse all of them refer to a building or
room or place where materials are kept.
An organization usually has different types of stores like which it refers by different
names on the basis of material nature such as:

Raw Materials Store

Processed or Semi-Finishing Materials Store

Finished Goods Store

Yard Store

Such stores range from ordinary ones with shelves and bins to cold or dehumidified
storages, huge silos for storage of food grains or bonded stores for keeping goods on
which customs and excise duties have not been paid. Storage is an essential and most
vital part of the economic cycle and Storage Management is a specialized function,
which can contribute significantly to the overall efficiency and effectiveness of the
materials function.

Different types of Stores on the basis of storage nature are :

A) Closed stores Closed systems are utilized when close control and accounting for
inventories are desirable. In such cases, storage area are kept locked and entry is
limited to stores employees, or to others only on an authorized basis. Goods enter
inventory through a formal receiving process and leave through an authorized
requisition or bill of materials. Closed systems typically include industrial or business
stores operations, and involve repair parts, consumables, tools, and materials or
components for assembly where ongoing control and accuracy is essential.

B) Open stores There are instances where the cost of closely controlling inventories
outweighs expected losses in an uncontrolled environment. In such cases, inventory
storage areas may be left open or kept close to the point of use for efficient user
access. Such inventories are available for use as needed, with emphasis on expediting
production, or operations rather than on security.

C) Random access In random access systems, goods are stored without regard
for commodity groupings. Instead, goods are stored in the next or nearest available
space of suitable size. However, it is good planning to select from available storage
spaces with consideration for the anticipated frequency of issue. Locating items in
random access storage usually requires a computerized system. Random access
systems
to be used
in conjunction
with
a closed
storesare
system.
variety oftend
automatic
storage
and retrieval
systems
(ASRS)
being used today. ASRS
systems have the capability of bringing goods from storage or placing goods into
D)
Automated
warehouse
A large
storage
upon computer
entry of
the item identification and/or storage location. Such
systems may range in size from small rooms to whole warehouses, and may handle
items ranging form small parts in tote pans to large materials on pallets.

E) Contractor operated system, or integrated supplier systems Where business

volume is sufficiently large, suppliers may operate a firm's supply or inventory storage
facility using supplier personnel, under contract with the using organization. Depending
on the agreement, a contractor may either acquire on-site inventories or just manage
them.
In some cases, supply contractors have branches built next door to industrial plants, for
the sole purpose of supplying all needs of the plant. In some cases, the two facilities
are separated by a common wall and supplies are issued through an opening in the
wall. This is an emerging trend for MRO and office supply goods.

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Materials Receipt and Accounting

Materials required for manufacturing process to run are received from various sources from outside
which are verified and accounted for in the Stores.
Different modes of receipt :
Materials required are received from various sources through various modes of transportation. The
major mode of transportation are Rail and Road. Other than this the materials are received through air,
sea , courier, registered post or by hand also (Door delivery).
By Rail:
The bulky material required in huge quantity like Raw materials are received by Rail in rake load. A rake
is the multiple number of wagons received together. In such cases the whole rake is received inside the
plants and the wagons are returned back to railways after unloading. When the quantity received is less
for
Stores
after which
the materials
can be
made
for inside
the usethe
byplant
the user
department
thaninathe
rake
load,only
materials
are received
in wagons
which
areavailable
transferred
by the
and the payment
to the
supplier
be made
or regularised.
So, the timely
accounting ofreceived
the receipt
Railways
and empty
wagons
arecan
returned
to railways
after unloading.
The consignments
in of
the material
very important..
The time taken
in accounting
& taking the
materialcalled
on charge
from
the
rake
load or is
wagon
load are accompanied
by the
carriers( Railways)
document
Railway
receipt
time itThe
is received
Storesare
is known
as Leadwithin
time ofthe
Receipt
accounting
GRN/SRV
lead time .
(RR).
wagonsin/ rakes
to be unloaded
stipulated
time limitorgiven
by the Railways
Every plant
triesTime.
to make
lead time
minimum
as possible
ensure
timely charge
accountal of
known
as Free
For this
any GRN/SRV
delay in releasing
theaswagons
beyond
the freetotime
Railways
material,
availability
use and
timely
payment/
regularization of payment to the
extra
amount
based of
onreceived
the extramaterial
time thefor
wagons
arethe
held,
known
as Demurrage.
suppliers.
Material less than a wagon load are received in smaller consignments also known as Smalls. The
railway documents accompanying such small consignment is also know as Parcel Way Bill (PWB).
These small consignments/ Parcels are received from the railways from their godown within the
stipulated time. For any delay in collection of such material from Railway godown Railways charge extra
amount known as warfage.
By Road:
The materials are also received through the Road transportation by trucks. The
material received by truck are accompanied by a transporters document know as consignment note.
Depending on the terms of the Purchase Orders, the material by road are received in the Plant Stores
or in the transporters local godown in which case Stores collects the material from the transportation
godown.
The materials sourced from the foreign countries are received by Ship or through Air Carrier up to the
nearest Sea port/ Airport respectively which is further transported to Plants by Road.
Verification of Consignments :
When the materials are received by Rail the wagons received are verified for any pilferage / shortage
and also weighed for ascertaining the receipt of correct quantity. Any discrepancy in the quantity found
or the damages observed is recorded on the RR / PWB. A Railway claim is lodged against this
discrepancy. This Railway claims become a prerequisite for lodging insurance claim with underwriters.
The material received through trucks are verified at the point of receipt for the correctness against our
Purchase order and the suppliers challan and outward damages or shortages in quantity if any. If any
shortage or outward damage in the received material/consignment is observed the remarks is made on
the transporters document and a carrier claim is lodged.
Acknowledgement for the receipt of consignment/material was given on the transporters document like
consignment note or on the delivery challan of the firm.
Receipt, Accounting & Documentation :
Once the consignments/materials are received in the Stores from the transporters/railways, actual
quantity received & the condition of the material received are further checked in detail after unpacking
the packages and matching the quantities with the suppliers delivery challan and the Purchase orders.
Weighment is resorted to wherever the weight is to be ascertained.
The correctness/completeness and the quality of material received is checked as per the terms of
Purchase Orders. Then the document for receipt accounting is prepared which is known as Goods
receipt note (GRN) or Stores Receipt Voucher (SRV). GRN/ SRV is the document through which the
received materials are taken on charge in the plant, also the document which communicates the
acceptance/rejection of the material supplied and a document enabling the payment to the supplier
against the supply.
Direct delivery to users or central storages :
The materials against the various Purchase Orders are generally received centrally by stores and
stored after verification and accounting. However in case of certain items where there is no central