What is stores department

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No notes for slide. Stores department 1. Procurement of Non-stock items. Sale of scrap and disposal. Supply of Uniforms to eligible Railway Employees. Various activities being undertaken in different sections under DMM. A Local Purchase Section. This section is responsible for processing the Non-stock Indents received from various departments for procurement of Non-Stock material.

The task of storekeeping relates to safe custody and preservation of the materials stocked, to their receipts, issue and accounting. The objective is to efficiently and economically provide the right materials at the time when it is required and in the condition in which it is required. The basic job of the store is to receive the materials and act as a caretaker of the materials and issue them as and when they are needed for the activity of the organization.

Once the material has been received and cleared through inspection and accepted for use, it needs safe custody of the stores. The role of custody is to receive and preserve the material. A stage comes when the material is needed for use. It might also happen that after partial use , some materials having useable value in future are returned to the store and thus they also become part of the custody again. Storekeeping activity does not add any value to the materials.

In fact it adds only to the cost. The organization is to spend money on space expenditure on land, building passage and roads , machinery store equipment , facilities e. All of these get added to the organizational overheads and finally get reflected in the costing of the finished product.

However, it is an essential function in any organization. Store can be of temporary nature which means that it has a limited life. Store can also be of permanent nature. Stores are classified basically in the following broad categories. Centralized storage of materials in a central store has advantages as well as certain disadvantages. The following are the advantages.

Distance from the store and the user department gets increased which requires higher transportation needs from the store to the user department. In the long drawn process of preserving the materials till its use ,some materials might get obsolete and unserviceable and may require removal from stores for clearing space for other incoming goods. This activity is known as disposal of materials for which auction etc is done. The materials , lying unused but have future economic value are said to form inventory, which needs professional handling.

Inventory management thus is an important aspect of the stores function. One of the basic functions of store is to account for every material received in the store by maintaining proper records of all the incoming, stored and outgoing materials so that proper accounting and audit trail is maintained. Still other industrial enterprises are involved in using the raw or processed materials in the manufacture — in factories or in workshops — of the wide range of products available on the market today, or in producing components which will form part of the final products of other manufacturers.

In addition, there are industrial enterprises involved in construction and allied fields. In this group the range of enterprises in this group is very wide, but the common activity is the buying and selling of the raw materials, components and products produced by the industrial enterprises.

Enterprises involved in trading range from small one-man shops and kiosks to huge supermarkets, departmental stores, hypermarkets and shopping centres.

Some trading enterprises are involved in wholesaling; they purchase products from their producers in large quantities, and then sell them in smaller quantities to retailers, who in turn sell them, generally in even smaller quantities, to their customers, who might or might not be the final consumers.

Frequently the services provided involve the performance of some work, only the results of which might be seen; examples include banking, finance, transport, maintenance of machinery, etc. Besides those already mentioned, services are provided by such diverse businesses as hotels, restaurants, estate agents, computer bureaux, travel agents, tailors, electricians, hair dressers and barbers, and many more.

There are also enterprises which provide specialized services which are called utilities. These include enterprises — often fully or partly state-owned and run — which provide supplies of electricity, water and gas, as well as sewerage, post and telecommunications, and similar services, often on a national or on a regional scale. There are, of course, some enterprises which fall into more than one of the three major groups. For example, a business might operate a factory, and then sell the products of its factory from its own shop s — and is thus involved in both industrial and trading activities.

Another enterprise might sell, say, office machines and also provide a maintenance service for those machines, and so is involved in both trading and service-providing activities. You will have noted that earlier we stated that the Stores Department has a nonproductive function. We can now explain what we meant. For example, if an enterprise has a Production Department, its function is to make or manufacture goods or other items which will be sold to bring in money. In contrast, the Stores Department of an enterprise does NOT make or — in general — sell goods or services to customers.

As we explained earlier, the standard of the service provided by the Stores Department will affect the efficiency and profitability of the entire enterprise of which it is a part. Obviously, the Stores Department cannot be expected to provide the best service unless it receives adequate information from other departments.

Furthermore, it must work closely in co-operation and co-ordination with those other departments. The departments with which the Stores will have contact will, of course, depend on the activities in which an enterprise is engaged. However, we now look briefly at some of the major departments with which close contact by Stores Departments might be necessary. Protocols should list the daily security activities expected of staff, including building opening and closing arrangements.

Arrangements should include the securing of all windows and doors and the enabling of all security systems, such as alarms and CCTV. The risk assessment should indicate whether the use of security guards is required, and the level of provision. Security guards for storage facilities may be directly employed or provided by means of a contract with a specialist security company.

In some cases, regular patrols may be sufficient. In high-value storage installations, a hour presence may be required. Only security companies that comply with BS and BS should be used. Relevant police checks must also be carried out. Stores management covers the actual handling of items or materials received into, held in and issued from a store.

In a smaller office storage facility, the responsibility for managing stores will usually fall to a local administrator or manager.

A larger facility or warehouse will commonly be the responsibility of a dedicated stores manager. The management of smaller stores will focus on issuing items to authorised persons and monitoring stock levels. Items that are low on stock will need to be reordered and any defective items returned. The person managing the stores may or may not be the person responsible for the procurement and supply of new items. In a warehouse setting, the stores manager is an important figure in the supply system and may be responsible for reordering regularly used items that are low in stock.

In other organisations, the manager will work closely with a procurement team who will deal with reorders and with developing new supply chains. Raw materials and components. Work in progress. Finished goods and goods for sale. Consumables and infrastructure stores. Raw materials or components are those that are used in production, manufacturing or assembly processes. Key questions for deciding on stock levels of raw materials and components include the following.

Keeping stocks of unfinished or part finished goods can be a useful way to protect production if there are problems down the line with other supplies.

Having large amounts of stock for sale when business is uncertain can lead to a loss if the goods are not bought. Consumables and infrastructure stores are the items that an organisation needs to maintain its own processes. For instance, a grounds maintenance company would need fuel and spare parts for its machinery and tools as well as personal protective equipment for its operatives.

An office would require stationery supplies. How much stock is kept will depend on factors such as:. Stock control involves making an inventory or list of stock, and noting its location and value. It is sometimes referred to as stocktaking. Stock control is a vital function. Stock control allows an organisation to know what it has and where things are. This allows people to find things quickly and to organise stores so that frequently needed items are at hand. Efficient stock control ensures that capital is not tied up unnecessarily, and protects production if problems arise with the supply chain.

It enhances productivity and saves time. Poor stock control, on the other hand, creates waste, inefficiency and confusion. In some organisations stocktaking is an exercise carried out once or twice a year to work out the value of stock held and to ensure that stock lists are accurate. Other organisations require a process that keeps a continuing record of stock levels and the whereabouts of items so that they can be ordered or supplied. Accuracy in stock control is vital. An organisation, especially a retail supplier or a supplier or distributor of spare parts, for instance, must be able to rapidly locate and despatch items kept in stores.

Checking stock more frequently through a rolling stock take avoids the need for a large annual exercise, but demands constant attention throughout the year. It is important to note that the stores department of an organisation does not make or in general sell goods or services to customers. Its function is to provide a service to the rest of the organisation.

For an organisation to successfully run its business it must have the products, materials or services that its customers want. Running out of stock happens when products, materials or services are not available or cannot meet demand. This may lead to loss of business. Running out of stock may be the result of understocking. That is, holding insufficient quantities of stock that are not replenished when they get low. This may be due to a failure to estimate how much stock is needed or to poor stock control methods or systems.

Overstocking means having more than the required levels of stock in place. This may mean that an organisation does not run out of stock. However, in most cases it will lead to a large amount of capital being tied up in materials that are not being used and may cost to be stored. In addition, unforeseen changes may mean that the materials are not required.

This can lead to waste. Stock control systems are designed to ensure that stock controls are appropriate for an organisations needs and that situations of overstocking and understocking do not occur. Manual stock control systems have been used for many years and may still be used by some small businesses with relatively few stock items.

However, they are prone to error and have none of the flexibility and functionalities of modern electronic computerised systems. The simplest manual system is a stock book.

This is usually just a straightforward log of stock received and stock issued. The stock book can be used alongside a simple reorder system. For example, the two-bin system works by having two containers of stock items. When one is empty, it will be necessary to start using the second bin and order more stock to fill up the empty one. Stock cards are often used in manual systems.

Each type of stock has an associated card, with information, eg:. More sophisticated manual systems incorporate coding to classify items. Codes might indicate the value of the stock, its location and which batch it is from, which is useful for quality control. In most organisations, and in all specialist stock areas such as warehouses, manual systems have for the most part been replaced by electronic computerised records.

Simple stock systems may be able to use spreadsheets. More complex or specialist systems will use dedicated software and mobile device apps. Computerised stock control systems and software run on similar principles to manual ones, but are more flexible and information is easier to retrieve.

For example, it will be possible to quickly access a stock valuation or find out how well a particular item of stock is moving. A computerised system is a good option for businesses dealing with many different types of stock. Other useful features include:. The system will only be as good as the data put into it. Where a new system is being installed, a thorough manual stocktake should be undertaken before it goes live to ensure accurate figures.

It may also be useful to run the previous system alongside the new one for a while, to identify and remedy any problems.

A wide range of electronic software systems and applications are available. Organisations should take care in any procurement to ensure that systems have the required functionalities for the full breadth of their business needs, both current and future.

A detailed specification of requirements should be completed involving all departments that will have need to access or use the system. Compatibility with other applications will usually be a key factor, such as with finance systems. For specialist applications a number of systems should be short-listed and compared before making the final choice.

Material Requirements Planning MRP systems generally focus on the manufacturing and production side of a business. They are usually designed to enable the effective management of manufacturing functions such as:.

MRP systems should integrate seamlessly with other processes and systems, such as those supporting supply chain management, ensuring that materials are ordered in the right volumes to arrive on the appropriate date. These systems may be more appropriate where complete management of the supply chain is required and stock needs to be tracked across the whole organisation, rather than just in a production context. RFID allows organisations to identify individual products and components, and to track them throughout the supply chain from production to point of sale.

Using RFID tagging for stock control offers several advantages over other methods such as barcodes:. The costs associated with RFID tagging have fallen over recent years, and continue to do so, to bring the process within the reach of more and more businesses.

The benefits of more efficient stock control and improved security make it particularly attractive to retailers, wholesalers or distributors who stock a wide range of items, and to manufacturers who produce volume runs of products for different customers. Systems are integrated so that quoting, invoicing and ordering can all be completed within the same tool. Links to finance and accounting software enable support for tax and profits reports.

There are a variety of stock control measures that can be used. All are designed to provide an efficient system for deciding what, when and how much to order. Examples of stock control methods include the following. A minimum stock level for each item is determined and reordering occurs when stock reaches that level. This is known as the reorder level. The stock review method requires regular reviews of stock.

At every review, an order is placed to replenish stocks to a predetermined level. The time period from order to delivery can be reduced to minutes or hours, and stock arrives on-site moments before it is needed.