TABLE OF
CONTENTS
PAGES
Title
page i
Certification
ii
Dedication
iii
Acknowledgement
iv
Table
of content v
CHAPTER ONE
1.0 Introduction 1
1.1 Purpose of the Study 3
1.2 Stores Functions in an Organisation 4
1.3 Types of Stores 5
1.4 Stores Organisation 8
1.5 Relationship
between Stores and other major departments. 12
CHAPTER TWO
2.0 Materials Storage Processes 19
2.1 Stock Control 23
2.2 Identification of Materials in Store 29
2.3 Stores Layout 35
CHAPTER THREE
3.0 Stores related problem in the public sector 38
3.1 Summary 40
3.2 Conclusion 42
REFERENCES 43
CHAPTER ONE
1.0 INTRODUCTION
Stores
have been considered as the livelihood of industries in both private and public
sectors of the economy. Without stores,
there could be neither production nor operation of any kind. Manufacturers are constantly conscious of the
significant role of stores with regards to availability of raw materials and
need for effective warehousing of their finished products. Occasional
stock-outs can lead to production stoppage and hence a substantial loss of
anticipated profits.
Cater
R. J. in his book “Store Management and related operation” defined stores as a
small/large building or an area (stockyard) in which all kinds of materials
tools, spares and so on needed for production, distribution, maintenance,
packing, servicing are stored until when required by the users or consumers.
Isola,
O. T. define the term stores as the building, or room or place where materials
are kept.
Apart
from the fact that store is used to refer to buildings holding goods, it may be
used to prescribe goods held in such a store house or stockyard. The goods may include finished goods awaiting
dispatch as well as partly finished goods (W.I.P) awaiting completion
(inventory management).
In
“management of stores Activities” store management is defined as the act of
keeping goods and materials, which have
been produced by an individual or group, making it available as it when needed
so that the objective can be met.
Aremu
S. S. in his book “Modern store Administration” defined store keeping as an act
or process of receiving, inspecting, recording, arranging and storing all kinds
of materials, tolls, stores, equipment etc, needed for production,
distribution, maintenance, packing servicing until when required by the users
or consumers. The above definition shows
that store – keeping should contribute directly to profitability and be
concerned with lead time, storage cost, acquision cost, material handling, work
study in store, preservation, packaging, pre-selection and issue packing and
dispatch.
This
chapter essentially discusses the conceptual frame works, purpose of study, store
functions in an organisation, types of stores, stores organisation and
relationship between stores and other major organisation departments.
1.1 PURPOSE
OF THE STUDY
The
reason behind this study is to enlight both the public and private sectors”
store personnel on how to achieve adequate and proper store management. One of
the major problem of this great country is material procurement which lack
adequate store management and organisation.
1.2 STORES FUNCTIONS IN AN ORGANISATION
Store
provides its function to all other departments within same industry especially
the operative department.
(a) Store
Controls in most industries upward 50% of a working capital.
(b) Because
it controls large amount of working capital, its inefficiency will cause an
organisation to liquidate (i.e run out of cash).
(c) Proper
store-keeping is a safeguard against deterioration obsolescence, obsolete
materials and theft, and fraud.
(d) Efficiency
system of stores accounting helps in the preparation of dependable budgetary
control for the organisation.
(e) Immediate
provision of required materials, on presenting proper authorized documents.
(f) Determination
of movement of materials is achieved i.e issues and records.
(h) Security
of stores is ensured.
1.3 TYPES OF STORES
ORDINARY STORE:- This
is a store also known as goods Warehouse may belong to the manufacturer or
wholesaler or rented by him. It is where
the manufacturer stores his goods until they are needed and sold to the
retailers or their agents.
BONDED STORE:- It is a place where
government keeps goods whose owner have not paid there required duties. As the name suggests, it is hired from
individuals who sign bond with the government not to release the goods until
government gives them an indication that the duties on them have been paid.
STATE WAREHOUSE/STORE:- Also known as
the Queen Warehouse, especially in Britain and other countries that are under
them, is a place where goods that are not allowed to enter a country also known
as contraband, seized by board of customs and Excise are kept until they are
sold on auction to members of the public.
This store building is owned by the government and this is why it is
known as state warehouse in Republic such as Nigeria and others.
According
to Bosler W. Robert (1970, P.88) presented five (5) classification of store
rooms according to the types of materials stored. These in cases:
1. DIRECT MATERIAL STORES:- This houses
direct materials purchase in bulk that may be used intermittently and generally
stored in protected areas to ensure adequate inventories are available at all
time. Materials in protected stores are
issued only on the authority of an approved.
(a) Requisition
form
(b) Product
order, or
(c) Bill
of Material
Specialized
materials used on high-production operating and on standardizes product are
frequently ordered for delivery according to the production schedule and are
delivered directly to operation area.
2. INDIRECT MATERIALS STORE:- This type
are usually used for indirect materials such as oils, solvents and other
flammables, which often-times are stored in fire-protected areas away from the
production operation area.
3. TOOLS, DIE, JIG AND FIXTURE CRIBS: - Lastly
tools, gages and inspection instruments are kept in protected crib areas. NOTE: (A
crib is a metal box, metal container, or small building for storing).
4. MAINTENANCE AND JANITORIAL SUPPLY CRIBS:- This
is a separate storage that do not occupy potentially valuable manufacturing
space storing maintenance and janitor supplies, which differ considerably from
direct and indirect material store.
5. OFFICE AND CLERICAL SUPPLIES:- These
supplies are usually kept in one central storehouse from which departmental
requirements can be not drawn as required.
1.4 STORES
ORGANISATION
Organisation,
as an element of management is concerned with arrangement of activities or
responsibilities in such a manner that enterprises predetermined aims and
objectives are achieved to organizational structure. It is good to note that, in order to accomplish
any goal, activities must be grouped logically or reasonably and authority
should as well be provided so that conflict of actions can be avoided.
Stores
organisation involves designing stores to best facilities goal accomplishment
and establish relationships among the various parts of the stores.
The
position of store keeping activities in the organisation structure varies
considerably from company to company depending upon the following factors;
(i) The size of the product plant
(ii) The type and size of product produced, and
(iii) The
cost of raw material and finished materials parts, tools, Jigs, dies and
fixtures.
The
store function may operated from a single office run by the store keeper in a
small firm, but, in a large organisation, it is necessary to apportion (share,
or divide) the various duties to separate section.
Hence,
there are two main types of stores organisation;
(a) Internal Organisation
(b) External Organisation
INTERNAL
ORGANISATION
Internal organisation is must, where;
(1) The organisation is large or fairly large
(2) The organisation is not production oriented
(3) That has no branch elsewhere.
A
very good example of the type of internal store organisation is that of
servicing organisation i.e. institution.
Such organisation may include:-
Identification or Vocabulary Section
Storehouse function
Stockyard Section
Record Section
Account Section
Standardization/Inspection section
Stock Control Section
EXTERNAL
SECTION
The
store external organisatioin is characterized with:
i. Large organisation
ii. Production oriented concern
iii. With many location / Branches
The
external organisation could then be subdivided into three;
(a) Central Store
(b) Sub-stores and
(c) Departmental Stores
1.5 RELATIONSHIP BETWEEN STORES AND
OTHER MAJOR DEPARTMENT
The
concept of service in relation to store operations: the stores, by the virtue
of its function must be seen as providing service to the rest of the
organisation in which it operates. The standard of the service will affect the
overall efficiency of the organisation. The relationship between stores and
other major departments within the organisation are therefore very important.
Although stores are providing the service, it needs a certain amount of
participation and information from the other major departments to ensure that
service provided is efficient and meets the needs of the organisation in every
dimension.
In
any organisation the four (4) major other departments are:
Marketing (sales) department
Finance/Account department
Personnel department
Production department
The
needs and duties of the other departments in relation to stores are as follows:
PRODUCTION:
As this is obviously one of the most important users of the stores services,
store management has to ensure that all materials needed for continuation of
production are available as and when required. Production management’s plan in
this relationship is to ensure that adequate warning is given to store about
need for materials together with information about the type and quality required
for future demands and also the performance of the materials issued.
SALES DEPARTMENT
The
relationship between stores and sales is a very important one. Stores is
responsible for ensuring that all stocks held for sales are stored issued, and
controlled as efficiently as possible. The sales staff will often rely on
stores to ensure that finished stock is available and when required, they will also require(s)
store to ensure that marshaling of stock is carried out and that the process of
stocking-up in relationship to sales promotion and other marketing activities
is carried out effectively. Store may also be responsible for the control of
spare part and accessories used in connection with the finished goods, which
have to be supplied as at when required by the sales department. Stores
management must also be aware of the forecasts of future sales so as to be able
to make plans in terms of stock levels, storage space outside warehousing and
staff levels.
PURCHASING DEPARTMENT
The
links between stores and purchasing in terms of their activities have always
been very close. In many cases these two departments are united under the
heading “supply management” where two separate operations do exist, the
relationship responsible between them is vital. Purchasing is responsible for
buying all the goods and services needed by the company. Purchasing depends on
stores for many information to carryout their activities. Purchasing needs
stores to keep it informed about the levels of stock at any given time and it
is left to stores to keep purchasing up-to-date as to the total stock
situation. This will enable purchasing to ensure that all stocks are provided
and economic flow of goods and services is provided.
FINANCE /ACCOUNT
DEPARTMENT
The
relationship which exists between store and account/finance impinges on several
important areas. Finance relies on stores for information covering the value of
stock hold, and about items damaged and therefore to be written off and the
asset left. The accounts department will often ask stores to confirm the
receipt of goods as invoiced, especially in cases of doubt or query. Stores
also provided a continuous supply of data regarding the use of stock in the
operations and therefore aids the accounts department in its functions of cost
allocation of particular batch or job as carried out by the operation function.
ENGINEERING DEPARTMENT
The
engineers are responsible for ensuring the plant and machinery operate by the
organisation is kept in working condition or order and is performing at its
designed efficiency. Stores management has to ensure that necessary spare
parts, tools and equipments are in stock or especially available from supplier
stock.
On
their part, the engineering department often work to an engineering schedule (a
timetable of engineering activities covering two or three months) copy of this
schedule must be given to the store manager so that stocks can be checked and
items bought in that will be needed during the time period covered by the
schedule. This will ensure that items required thus by the engineers, thus
avoiding the situation of stripped down machines being left for weeks awaiting
spare parts.
QUALITY CONTROL AND
INSPECTION DEPARTMENT
Quality
control is the department, which is responsible for administering the (quality)
standards set by the organization in relation to materials both used and
produced by the organisation. Inspection is very important part of the process
stores management has to ensure that all delivered goods are held aside until checked
out and passed by quality control that items have been delivered.
In
return, the inspection department have inspected deliveries must indicate
acceptance or rejection. The supplies function must work closely with the
quality department if quality is approached from an assurance viewpoint.
MAINTENANCE DEPARTMENT
The
supplies services in this case consists in acquiring appropriate materials and
machinery spares and being in a position to issue them as and when required. To
facilitates this work, the maintenance department advise details of the forward
programme on repairs and overhauls as far a possible, particularly where
planned maintenance is in operation, and advises on the initials of spares to
be provided when any major new plant or machinery is installed.
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