Management of receipts in store
"A battle well begun is half won", amply emphasizes the management of receipts or inputs in the warehouse.
Input management in the warehouse includes the following activities.
Requirement determination
Preparing of purchase requisitions
Chasing supplies through the purchase section
Request for expediting suppliers
Receiving the materials
General visual inspection
Quantity inspection
Coordination with quality inspection
Taking stock of the accepted materials
Taking care of rejected materials
Completing documentation
Making book entries
Endorsing supplier’s bills
Unless the warehouse systematizes its working by better planning, it will not be able to complete the input formalities. This is one of the critical areas as the time of deliveries is uncontrollable. Load carrying vehicles, containers from out stations not to consider as extension of warehouses, and to clear on a priority basis to avoid demurrages.
Receipt determination
Past consumption, anticipated forecasts, lead-time, exceptional known cases, are relevant to determine the requirements in the case of regularly consumed items.
Purchase requisitions
By raising a purchase requisition, the procurement section to be informed about the materials requirement, to take necessary purchase actions.
For new items, it is essential to consult the user before releasing the requisition. This will ensure corrected, updated entries and prevents accumulation of obsolete items.
Based on the purchase requisition, purchase department will release the purchase orders. A copy of which is forward to the stores for facilitating receipts. This facilitate the store to prepare for receiving the materials and correlate with the suppliers documents sent with the material. The receiving section constantly should chase, follow-up the procurement section to get the materials in time.
The warehouse is accountable for the physical count of the receipt. The quality control department will carry out the quality assessment. The final incoming materials can be in usable stock only upon passing thru the prescribed quality checks. Technically the procurement action is not complete until the inspection is over.
The warehouse to be provided with adequate measuring instruments like weighing scales, measuring vessels, for volumes, ratio balances for counting etc.
The document used to regularize receipt of materials is the goods receipt and inspection note or GRIN.
When shortage arises, send intimation to supplier giving the necessary details. There is urgency in this regard, as claims are time bound.
Regular materials issue to consumer departments constitutes the bulk of warehouse activity. Warehouse also has to cater to temporary requirements such as equipments, tool kits, projects, sub contracts, sample issues, returnable issues, etc., separate procedure have to be developed for these issues and the method of accounting should be specified and effectively implemented.
Issues must be based on valid authorization. Authorization can be in the form of a material requisition.
Once issue voucher received by the store, it is for the store to check availability, identify the authenticity, correlates the control limits and issue the material. The necessary entries made in the stock ledger / bin card.
Complete the receipt, stocking and issuing formalities as and when the transaction happens.
Incident based documentation will avoid many problems of stock mismatch, timely indication for procurement, excess or short receipts, over stocking etc.
Define procedure for stock transfer or loan from one cost center to another.
FIFO system of issue
To enable a proper rotation of stocks, adopt a first in first out (FIFO) principle in the issue of materials. As the name implies, items received first issued first. The material in store physically organized in such a way that the first in materials are handy enough to be issued out first. This rule will take a back seat when expiry date is the criteria for issue. Material whose expiry date is first to issue first irrespective of it receipt.
Returns to stores
In normal conditions there will be no returns to store once the material is issued, but it may be necessary to have a procedure laid in place as some times because of wrong issue, or plan change, or non suitability of the item issued may give rise to return the material back to store.
A store document is to cancel by issuing another reverse document.