THE STORES FUNCTION The stores function is a vital part of industrial concerns, public and private utility undertakings, agricultural enterprise, municipal authorities, Armed Services and Government departments, and it must be designed to suit the particular needs of the organization it serves. There is, therefore no standard system which can be universally recommended or applied but, in the course of time, certain principles and practices of more or less general application have been evolved, In this books it is proposed to examine at length some of these principles and practices but it must always be borne in mind that the conditions of poperation are very diverse. The importance of efficient storage and control of stock is indicated by the fact that according to the Monthly Digest of Statistical Published H.M.. Stationary Office, the total value of stores in stock in the United Kingdom exceeds 13,000m PURPOSE OF THE STORES FUNCTION The stores function is set up in any concern to assist in the production of goods or service and no industrial unit or public undertaking of substantial size can be efficiently managed without it. The primary objective is to provide a service to the operating functions and this must be fully appreciated. All other stores activities, although they have their own relative importance, are subordinate to this main responsibility. The service given can be analyzed into four parts as follows- (1) To make available a balanced flow of raw materials, components, tools, equipment and any other commodities necessary to meet operational requirements (2) To provide maintenances materials, spare part, and general stores as required. (3) To receive and issue work in progress and finished products (4) To accept and store scrap and other discarded material as it arises. RESPONSIBILITY OF THE STORES FUNCTION Economy It has been emphasized that the service is the principal objective of the stores function, but it is obviously desirable to provide that service economical. The most important consideration here is to maintain the value of stores in stock (i.e. the inventory value) at the lowest practicable level at all times in order to economize in the use of working capital and to minimize the costs of storage. It will be readily understood that there is some conflict between the need to give a good service and the need to economize in stock-holdings. On the one hand, the more stock held the easier it is to have required items readily available on demand’ on the other hand, the more stock held the greater the cost incurred. It is necessary to seek, find, and operate a satisfactory compromise between these two opposing forces and, in addition, to see that the stores organization itself is economically worked and co- operates with other functions incurring savings in material and other costs wherever practicable. 2.Identification Identification is the process of systematically defining and describing all items of stock. It includes the preparation of a stores code or vocabulary, the adoption of materials specifications and introduction of a degree of standardization. In certain circumstances, part of this work may be one by design, planning, or standards departments, and the purchasing department also has an interest. 3.Receipt Receipt is the process of accepting, from all sources, all materials and parts which are used in the organization, including supplies for manufacturing or operating processes, plant maintenance, capital installations and finished products. 4. Inspection Inspection means the examination of incoming consignments for quality. Very often there is a separate inspection department which undertakes this work for most, I not all, material but otherwise goods are inspected by stores personnel. Whatever the system of inspection in force, it is the duty of the stores function to ensure that the inspection laid down is carried out before items are accepted into stock. 5. Issues and Dispatch- This is the process of receiving demands, selecting the items required and handling them over to users. It includes also, where necessary, the packaging of issues and the loading of vehicles with goods for delivery. 6. Stock Records These are the documents, which record, from day to day, full particulars of individual receipts, issues and balances of stock. Stores Accounting Stores accounting is the process of recording details of stock movement and balances in value. Stock Control Stock control is the operation of continuously arranging receipt and issues to ensure that stock balances are adequate to support the current rate of consumption, with due regard to economy. It involves the relate process of provisioning, which is the means whereby instruction are given for the placing of orders. In some industrial concerns the production control department may take a large share in provisioning, at least as far as production materials are concerned. Stocktaking Stocktaking is the process of physical verification of the quantities and condition of goods. Storage Storage comprises the management of storehouses and stockyards, the operation of handling and storage equipment, and the safe custody and protection of stock. ORGANIZATION OF THE STORES FUNCTION Policy Directive In any enterprise it is desirable that the board of directors, or other appropriate authority, should issue a written directive covering stores policy and organizations, clearly defining the limits within which the function operates, and conveying authority to act within these limits A directive is usually supplemented by departmental instructions regarding detail of systems and operations, and these in turn may be incorporated into a handbook or manual containing all the standing instructions together with specimen forms and lists duties of the personnel concerned. Internal Organization In a small firm the stores function may be operated from a single office run by one storekeeper but, In a large organization, it is necessary to apportion the various duties to operate sections, e.g.- (i) Identification or vocabulary section. (2) Standardization section. (3) Storehouse section. (4) Stockyard section (5) Stock control section (6) Records section (7) Accounts section. The importance of the stores function is being increasingly recognized in industry and public undertakings and, in most large concerns nowadays, the man in charge of it occupies a senior supervisory position of managerial statues, being described as the stores controller, stores manager, stores superintendent or stores officer. A specimen organization chart for a large department is shown opposite. POSITION WITHIN THE SUPPLY ORGANIZATION In the industrial field particularly, the specialization of production and the increasing complexity of modern products and machinery requires a very high standard of organization and performance in stores work, and the range of materials, components and spares is continually expanding. Stores and Purchasing are largely inter-dependent, and any inefficiency or lack of co-operation on either side is soon reflected in the other. TO cope satisfactory with the whole supply problem in order conditions, a complete “ dovetailing” of these two functions is essential. An arrangement of this kind has obvious advantages, the chief o which are outlined as follows- (1) One Department head only reports to the line management an its his responsibility for the price and availability of materials is clear and unavoidable. (2) A single departmental control eliminates friction and ensures the maximum co-operation of each section. (3) It is easier to give a more comprehensive training to the staff, and improves promotion prospects. (4) It avoids duplication of records and activities. RELATIONSHIP WITH OTHER DEPARTMENTS. In order to discharge its responsibilities adequately, the stores department must actively co-operate with other departments, not only to provide a service, but to give and receive information so that the service is efficient. The nature of the other functions involved varies in different organization, as does the scope and responsibility of the stores function, so that it is difficult to be precise about relationship unless each case is considered separately. By way of example the following notes indicate the position as it is normally found in production factories. Production department This department is the main stores “ customer” and it is therefore of the first importance that the services to production are satisfactory in all respects. The closet co- operation is essential not only on he provision of materials but also on the stock levels to be maintained in accordance with the policy for inventory controls. The stores department provides materials, tools and other shop supplies at the required times and in the required quantities to supplies at the required times and in the required quantities to meet the factory programme, advise anticipated difficulties or failure in supply, an notifies any substituted or surplus materials available from stock. The storehouses are ready to accept work in progress and finished goods at any time and to receive scrap, off-cut rejected items and salvaged or reclaimed materials as they arise, so that the shop floor may be promptly cleared. The production department sends in to the appropriate storehouses not only work in progress and finished goods, but any excess materials, tools, fixtures and equipment not currently required, and notifies as soon as possible any impending changes in the production schedule. Design and Engineering Departments It is most desirable to have a closer contact with these departments, particularly from the point of view of specifications, standards, and obsolescence. Arrangements are made to see that before any new design, modification or technique is put into production, due note is taken of materials to the oid design, so as to avoid obsolescence and, whenever possible, new items and modifications are introduced to coincide with the running down of existing stocks. The design or engineering departments are consulted when obsolescent or obsolete item are being listed for disposal. Inspection Department Accommodation for inspection personnel may be provided in storehouse, and they are notified of all receipts. The stores Department is responsible for holding goods received in: quarantine” and submitting samples to inspection promptly. In return the inspection department inspect and tests deliveries without delay, and indicates acceptance or rejection together with advice on whether doubtful consignments can be put into use subject to a discount in price, or whether they should be return to suppliers as totally unacceptable. Maintenance Department The stores services in this case consists in holding appropriate materials and machinery spares and been in a position to issue them as and when required. To facilitate this work, the maintenance department advise details of the forward programme on repairs and overhauls as far as possible, particularly where planned maintenance is in operation, and advises on the initial quantities of spares to be provided when any major plant r machinery is installed. Finance Department This is a continuous exchange of information covering verification of book entries and physical stock, clearance of invoices both inwards and out outwards, revision of prices, supply of material cost information, and control of working capital allocated to the financing of stock. Procedures are organized to work together effectively to control the value of inventory and cost o materials. The finance department usually provides regular periodic detailed statements of the cost of operation of the stores services Transport Department The stores department is itself sometimes responsible for transport but, where there is a separate transport department, it is essential that the two work together harmoniously. The stores function report details of loads, pick-up locations and discharge points, make facilities available for the speedy, safe loading or discharge of goods, and provides a weighbridge service. The transport department is responsible for the ready availability of vehicles and for advising any circumstances, which may delay deliveries or collections, such as breakdowns, strikes, or adverse weather. Sales Department The service provided is normally the acceptance, storage, packing, and dispatching of finished products. The sales department co-operates by advising of any appreciable fluctuation in the demand for finished goods which may affect storage accommodation, and is also responsible for given instruction on the quantities of spare parts or other materials to be held for servicing sales already made. Note: Stores Managers are very important people in any business Organisation. Come and let welcome you to the train of Stores and Materials Managers! Yours faithfully, Pius O. Kpebeiko Dip, B.Sc, ACIWM, MCISM. Programmes Director, Macliban Logistical Management Academy. 07036846518, 08026642673.
Posted on: Sat, 20 Jul 2013 13:44:54 +0000
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