B.S.

ABDURRAHMAN UNIVERSITY

CRESCENT BUSINESS SCHOOL

STORES MANAGEMENT

DONE BY DEEPAK JAMMAL MOHIDEEN R.LOGESHWARAN K.MUTHUKUMAR MOHAMMED JESHAN SASHI RAJ VIJAYREEDY

What is Stores Management?

In Growing Business world ,Stores play a vital role in

industrial sectors. In the store , finished goods and semi-finished goods can be stored. Stores can contribute to effective operations.

NATURE OF WORK IN STORES

Stores is the main building block for goods storage. Stores is defined as the supplies of goods. Stores is the function of receiving,storing and issuing material. They raw materials can be maintained in good condition,safely and readiness for use.

Why stores are needed

Retail shops such as the footwear shop (or store), need Stores to house reserves of goods for sale to customers and from which to replace those sold. Wholesale businesses (often called simply wholesalers) purchase goods in large quantities from the producers or manufacturers of them, so they need Stores in which to hold the goods until they are required for supply in smaller quantities to retailers.

 A manufacturing concern, for example a footwear factory,

must hold stocks of all the items (materials and components): leather, plastic, heels, buckles, nails, glue, etc, which are used in making the different types of shoes, etc. An office is likely to need stocks of printed and plain paper, envelopes, pins, clips and other items. Even an enterprise which provides a service, like a garage for example, must hold stocks: of spare parts for vehicles, consumables like oil, and, of course, tools for use by its mechanics.

OBJECTIVE
To provide services to operating functions by

balanced flow of raw materials, components, tools and tackles and other consumable materials. - To provide these services in the most economical manner, keeping the stocks at the optimum level and bringing down inventory holding and ordering costs to the minimum

 To account for all the materials received and issued,

proper storage to avoid deterioration and loss of materials, economical material handling, stock verification and reconciliation of discrepancies. - To receive scrap and other discarded materials and arrange prompt and most economical disposal. - Maintain proper coordination and cordial relationship with departments. 2.2

Functions of Stores
Receving and Despatch Inspection of Materials Issue of materials & maintenance of records

Warehousing and preservation

Stock control records Identification and disposal of scrap, obsolete

and surplus materials Physical stock taking/ stock verification Identification and codification Inventory control

Receiving and Dispatch

All the incoming materials from the suppliers and other units of the organization shall be received at stores. Arrangement need to be made for transportation, unloading and receivingof materials, and handling over the same to custody group checking up of packages, checking up materials with details of invoices and purchase order, identifying discrepancies, if any, record keeping, preparation of Stores Receiving cum Inspection Report, and for arranging despatches of materials- returned to suppliers, sent for repair or transferred to other units of the organization. Claims for short delivery, nondelivery or damages en- route are required to be lodged in time with the underwriters, carriers and suppliers as per the provision of contracts. Replacement supplies need to be arranged for above losses and also for technical rejections (supply of wrong or substandard materials by the suppliers)

Receiving and Despatch: All the incoming materials from the suppliers and other units of the organization shall be received at stores. Arrangement need to be made for transportation, unloading and receiving of materials, and handing over the same to custody group checking up of packages, checking up materials with details of invoices and purchase order, identifying discrepancies, if any, record keeping.

Inspection of Materials
Inspection of Materials It has to be ensured that every item received in stores is checked from quality angle. Any failure of poor quality materials may put the organization to heavy losses, especially, those of components of vital equipment. Quality plans need to be developed for critical and high consumption value items. Inspection can be carried out by independent Quality Assurance Group or by user department or by third party, depending upon the set up. Stores, however, is required to maintain continued and sustained liaison with inspection people for prompt inspection.

Issue of materials & maintenance of records: Stores department, on receipt of requisition/indent from user departments shall identify requirements and issue materials without any delay. Proper records need to be made of issue and receipt documents.

Warehousing and preservation: All materials received from Receipt Section shall be stacked properly and bin location recorded to facilitate issues. Necessary steps need to be taken for preservation of materials especially those, which are to be stored for longer period. Preservation methods need to be developed in consultation with suppliers/user departments. Steps also need to be taken for security and safety of materials and also safety of personnel from various hazards by taking precautions in handling the materials.

Stock control records: Day to day receipts and issues shall be posted in stock ledgers or computer master so that the current balances of each item are known without physical counting or checking.

Identification and disposal of scrap, obsolete and surplus materials: All scrap arising, worn-out and unusable spares etc. shall; be received in scrap yard and after identification and formation of lots shall be disposed off promptly. Similarly, obsolete and surplus items shall be identified and most economical disposal action is taken.

Physical stock taking/ stock verification: It has to be ensured that physical stocktaking of each item of stores is done at least once in a year, book balances tallied with ground balances. Discrepancies, if any noticed are properly investigated, reconciled and adjusted.

Identification and codification: It is also the function of Stores to properly and rationally codify each item of stock, prepare the code catalogues and distribute to all the concerned. This shall involve identification, systematic defining and describing all items, adoption of material specification, unit of measurement, introduction of a degree of standardization and variety reduction. In order to fulfill these functions, stores shall coordinate closely with other departments such as users, Planning, MIS etc.

Inventory control: This shall involve fixation of inventory levels, safety stock and monitoring availability, watching outstanding quantities, preparing purchase requisitions for items reaching reorder levels, analyzing consumption pattern, identification of surplus and obsolete materials and initiate disposal action. In view of critical requirement of scientific inventory control management

ORGANIZATION OF STORES
Stores operation shall be divided into three distinct Groups: (i) Receipt and Despatch Functions (a) Clearance & Despatch (b) Transit Insurance (c) Transport Agencies Contracts (ii) Custody & Warehousing including inspections (iii) Materials Planning & Inventory Control

TYPES OF STORES LAYOUT

COMB TYPE LAYOUT Stock may kept on one side of the aisle

TREE TYPE LAYOUT Stock may kept on either side of the aisle
OTHER LAYOUTS Free-flow layout Grid layout Loop layout Spine layout

Free Flow layout Advantages

1. Allowance for browsing and wandering freely 2. Increased impulse purchases 3. Visual appeal 4. Flexibility

Free flow Layout Disadvantages

1. Loitering encouraged 2. Possible confusion 3. Waste of floor space 4. Cost 5. Difficulty of cleaning

Advantages of Grid layout

1. Low cost 2. Customer familiarity 3. Merchandise exposure 4. Ease of cleaning 5. Simplified security 6. Possibility of self-service

Disadvantages of Grid Layouts

1. Plain and uninteresting 2. Limited browsing 3. Stimulation of rushed shopping behavior 4. Limited creativity in decor

Store Layout Considerations High margin items should be placed in high traffic areas. High demand items should be placed in low traffic areas Complementary items should be placed near each other. Seasonal needs should be considered. Items needing frequent restocking should be placed near storerooms or cash registers. Larger departments should be placed in lower traffic areas. Shopping behavior and operational considerations should be recognized.

Elements That Compose the Store Environment

Stores Manual
Manual is a written statement of polices and

procedures .A manual has several advantages such as spelling out responsibilities and authority of store keeping, standardizing store keeping activities and simulating new ideas and suggestions for improving and streamlining storage operations.

some of the major departments with which close contact by StoresDepartments

The Production Department As the Stores Department must ensure that all items,

materials and tools, as well as spare parts for machinery, are always available for continuous, uninterrupted production, it requires adequate warning about expected future needs, in terms of types, quantities, qualities (and possibly even colours). Stores might also have responsibility for quality control and for inspection (although these might be the responsibility of a separate department which, again, must work closely with the Stores).

 The Sales Department Close liaison is necessary between the Sales and

Stores Departments. There is no value in the Stores holding stocks of items which the Sales Department cannot sell, or in the Sales Department securing customers for items which Stores does not have in stock, or will not have in stock at the times required by customers.

The Purchasing Department In smaller enterprises responsibility for purchasing might rest with the Stores Department, and in many large enterprises the Purchasing and Stores Departments might be linked in a Supply Division. Obviously in cases where there are two separate departments, there must be a very close, coordinated relationship between them. Stores must keep Purchasing up to date with information about stock levels, whilst Stores relies on Purchasing to buy all the items and materials needed by the enterprise for its operations.

 The Maintenance or Engineering

Department This department relies on Stores to have available all the spare parts, tools, equipment and materials required for maintenance. In return it must supply full information to Stores of all long-term and shortterm maintenance plans and the items which will be needed.

 The Accounts Department This department requires information from Stores

about the value of stock held, about any damages or losses, about the receipt of items for which payment has to be made, and about stock issued for various operations, processes or contracts, etc.

Measurement of stores efficiency

Stores Department dealing with materials. Stores needs evaluation of its performance. Stores is the repository of inventory worth cores of

rupees. The store-keepers performance can be measured objectively through quantitative techniques. Stores measurement is done through various factors as stock-out situation,reducing non-moving items, checking of record maintained, house keeping, handling and etc.

CALCULATION OF STORES EFFICIENCY

Stores efficiency index = No of requisitions delivered on time Total number of requirements Storage loss index = value of inventory lost due to deterioration ,obsolescences and pilferage Average value of inventory

continued
Obsolescence index=Value of Non-moving items

Total inventory value

Space utilisation index = Area used for storage

Total storage area available

CONCLUSION
The position of a particular Stores Manager in the

hierarchy of management can vary considerably, depending on the size of an enterprise and of the importance to it of its Stores. In some enterprises the Stores Manager might be no more than a supervisor or a junior manager; in others he might be a senior executive, possibly even an executive director - a member of the board of directors.

 Nevertheless, no matter what his status might be, the

Stores Manager will have important managerial duties to perform. This necessity concentrates on the technical aspect of his work, but he must first know important matters which are likely to fall within the human aspect of the work of most Stores Managers.

Thank you for your time....