In an organization environmental factors influence decision making at all levels and warehouse is no exception. Tax structures and other governmental rules and regulations will influence the movement of goods from supplier to factory and factory to consumer. The basic rules and regulations will remain same but the rates, tariff and materials affect change from year to year.
Customs duties and sales tax account for a major portion of government revenues.
The warehouse in charge must be aware of these in order to function effectively have the economic advantage of stocking and not stocking.
Business logistics management aims at delivering material in production areas and finished goods to ultimate consumer by better freight management.
These activities cover the functions of incoming material, transportation, warehousing, material handling, stock control, order processing, supply scheduling and distribution of finished goods.
An efficient logistics system is one which handles the flows of inputs of raw materials into the production shops and the flow of the finished products to the customer according to plan with benefits greater than cost.
The packaging to be as acceptable for the consumer and easy to handle, transport and distribute, deliver to the customer. Product must be available for buy when customer wants at the merchant location.
Storage automatically assumes importance because of the time lags between completion of manufacturing and packaging, between the packed state and loading in to the carrier and between unloading at the destination and final delivery to the customer. Efficient management requires the time lag to reduce as minimum as possible to keep the distribution channel full and at the same time to minimize the costs. This is what exactly reduction in queuing. Time is money. Distance you cannot reduce, but time to travel can. This will reduce Inventory carrying and associated costs.
A total solution considering all the factors is the need in relation to the following areas:
Space cost economy in warehouses, labor economy in handling, transportation efficiency, reduced working capital investment, accurate forecast and control of costs, marketing efficiency and customer satisfaction.
Incident based documentation is the effective measure for a better functioning of the store.
On time, every time.
Right at fist time, every time and no rework.
No short cuts.
Jan 29, 2009
Jan 25, 2009
Success of verification process
The primary purpose of stock verification is to check that the physical stock agrees with the book balance.
If these fail to match, as often is the case the following could be the possible reasons:
Labeling of the item is not correct
Location of the material is wrong
Arrangement of the warehouse is improper
Gangways filled with boxes and other materials
Mislaid or lodged between shelves and dislocated later
Theft
Faulty documentation
Illegible handwriting
Figures copied incorrectly
Loss of documentation
Elimination of number of copies
Deteriorating accuracy of records
Transferring the paper work from one shift to another and not completing properly
Receiving by weight and issuing by numbers or vise versa
Inaccuracy of weighing scales at receiving or issuing or both places
Issuing without authorization, indents, or issue vouchers
Urgent issues made when store closed, without posting the entries.
Delay in inspection, posting the goods receipt note and other receipt documents later than the issue documentation posting.
Using rejected material in emergency and not accounting properly
Improper communication with the user, inspection, external vendors
Each bin containing more than one item leading to mix up and confusion in issue
Issuing wrong material, wrong indenting
Issuing with out a document, as user is busy
Direct delivered items, bulk items are received and removed without adequate documentation
Understaffed stores and presence of unskilled stores personnel
Improper records on the transfer from one store to another, lead to discrepancies
Material receipt when the store closed resulting in delay in postings.
In spite of all the above warehouse in charge has to receive, store in proper locations, issue, and account properly to minimize the discrepancies.
Verification agency should be impartial. Success of the verification process depends on the skill of the personnel involved.
Entire operation is on two primary documents namely receipt and issue. Hence the warehouse in charge has to keep these two records update and accurate to minimize the year-end imbalances.
Physical verification is useful only when a follow-up action is planned for future like writing off, imposing penalties, tightening security etc.
If these fail to match, as often is the case the following could be the possible reasons:
Labeling of the item is not correct
Location of the material is wrong
Arrangement of the warehouse is improper
Gangways filled with boxes and other materials
Mislaid or lodged between shelves and dislocated later
Theft
Faulty documentation
Illegible handwriting
Figures copied incorrectly
Loss of documentation
Elimination of number of copies
Deteriorating accuracy of records
Transferring the paper work from one shift to another and not completing properly
Receiving by weight and issuing by numbers or vise versa
Inaccuracy of weighing scales at receiving or issuing or both places
Issuing without authorization, indents, or issue vouchers
Urgent issues made when store closed, without posting the entries.
Delay in inspection, posting the goods receipt note and other receipt documents later than the issue documentation posting.
Using rejected material in emergency and not accounting properly
Improper communication with the user, inspection, external vendors
Each bin containing more than one item leading to mix up and confusion in issue
Issuing wrong material, wrong indenting
Issuing with out a document, as user is busy
Direct delivered items, bulk items are received and removed without adequate documentation
Understaffed stores and presence of unskilled stores personnel
Improper records on the transfer from one store to another, lead to discrepancies
Material receipt when the store closed resulting in delay in postings.
In spite of all the above warehouse in charge has to receive, store in proper locations, issue, and account properly to minimize the discrepancies.
Verification agency should be impartial. Success of the verification process depends on the skill of the personnel involved.
Entire operation is on two primary documents namely receipt and issue. Hence the warehouse in charge has to keep these two records update and accurate to minimize the year-end imbalances.
Physical verification is useful only when a follow-up action is planned for future like writing off, imposing penalties, tightening security etc.
Jan 24, 2009
Stock verification
Stock verification defined as the physical counting, weighing, or measuring the stock materials held and making a record of these figures.
Mostly it is an annual exercise coincides with the closing of accounts.
The warehouse in charge is responsible for the safe custody of the largest current asset of the balance sheet. They are raw materials, machinery spares, finished and semi finished goods.
In order to avoid discrepancy in stocks, constant review of stocks, up to date posting, reconcile the physical and book balances are of prime importance.
The main objective of the verification process is to identify the weaknesses in the operations of the warehousing system.
To ensure the input, output and stock on hand accounted for accurately.
Ensure proper placement of materials.
It also helps to identify slow, non-moving and obsolete items.
The chances of collusion amongst the various staff members may be to detect.
The purpose is to set up records as the basis for control and secondly to pass on accountability from one department to another.
Science there is always a pressure to complete stock verification exercise quickly; this may be ineffective and nullify the advantages.
To overcome this drawback, we require adopting continuous monitoring or perpetual inventory taking. In this case, materials verified throughout the year, a few items daily.
It will be advantageous to have the high value items verified more often.
Arrange verification of the high value items at the time of issue or receipt of these items in order to avoid accumulation of errors.
The primary purpose is to assure that inputs, outputs and the stock on hand have been accounted for accurately. A careful planning, well organized and executed stock verification will give tremendous advantages to the organization.
Take care to avoid double counting and omitting some items.
Mostly it is an annual exercise coincides with the closing of accounts.
The warehouse in charge is responsible for the safe custody of the largest current asset of the balance sheet. They are raw materials, machinery spares, finished and semi finished goods.
In order to avoid discrepancy in stocks, constant review of stocks, up to date posting, reconcile the physical and book balances are of prime importance.
The main objective of the verification process is to identify the weaknesses in the operations of the warehousing system.
To ensure the input, output and stock on hand accounted for accurately.
Ensure proper placement of materials.
It also helps to identify slow, non-moving and obsolete items.
The chances of collusion amongst the various staff members may be to detect.
The purpose is to set up records as the basis for control and secondly to pass on accountability from one department to another.
Science there is always a pressure to complete stock verification exercise quickly; this may be ineffective and nullify the advantages.
To overcome this drawback, we require adopting continuous monitoring or perpetual inventory taking. In this case, materials verified throughout the year, a few items daily.
It will be advantageous to have the high value items verified more often.
Arrange verification of the high value items at the time of issue or receipt of these items in order to avoid accumulation of errors.
The primary purpose is to assure that inputs, outputs and the stock on hand have been accounted for accurately. A careful planning, well organized and executed stock verification will give tremendous advantages to the organization.
Take care to avoid double counting and omitting some items.
Jan 22, 2009
Cost
Storage costs
The warehouse in charge must be aware of the fact that materials cost the organization in the form of intrinsic price paid to the supplier, freight, handling expenses, and inspection charges.
Materials stored in the warehouse cost the organization in terms of men, materials, time, space, insurance, risk and so on.
The inventory carrying cost is approximately about 30 per cent per annum on the average value of materials stocked.
Cost of funds
The cost of money invested in inventories and or opportunity cost for the funds.
Cost of storage place
For storing items, a firm needs space. This includes space for documents, work force, and office furniture etc. The cost incurred on the physical storage facilities in the form of rental value or opportunity cost basis.
Salary and wages
The salary and wages and the statutory payments of stores staff, security staff, stores audit staff, depreciation of bins, racks, handling equipment, furniture, office equipment and other devices used in store.
Obsolete items
Low shelf life items stored will deteriorate over period of time, requires to be disposed off.
Losses in spillage, evaporation of volatile substances and chemicals are also included in inventory carrying cost.
Breakages in handling and in transporting within stores premises will add to the costs. The non-moving items require liquidating at throwaway prices.
Losses due to theft and pilferage are included in the inventory carrying cost.
Insurance cost against fire, theft, burglary and other risks.
Over stocking cost - is an extension of inventory carrying cost, it signifies the investment in inventory for a longer period than necessary. Hence, the opportunity of alternative investment is lost.
Stock out or under stocking cost - in the finished goods area non-availability of an item implies that the customer will go to another vendor or substitute the brand with another. This results not only in loss of profit on sales, but also affects the image of the organization. In the case of raw material, stock out results in idle production line, the cost of lost production during the period of stock out and the extra cost per unit which might have to be paid in an emergency purchase.
The warehouse in charge is expected to manage the stores efficiently by reducing these costs without affecting the service level to the consumer.
Jan 21, 2009
"A battle well begun is half won"
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.
"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.
Jan 15, 2009
Factors in stores systems
To satisfy the customer/consumer/user, it is essential for the stores function to systematize its working.
The factors that have to be considered while designing a storage system are the type of material, volume of transaction, physical facilities, receipt, issue, documentation, flow of materials, and the warehousing manual.
Raw material stores
Proper control of raw material is one of the major factors that influence the profitability of a company.
A stock out in the raw material will reflect by an idle manufacturing line.
External factors in the supply such as availability, lead-time, seasonality, staggered deliveries, and credit conditions all combine to influence the stocking of raw material. Transactions of raw materials need tight control to affect an uninterrupted supply to production lines.
Packaging material and consumables
Generally, the consumable and packaging materials do not cause any supply problems, but occasionally some of them can become scares. The general characteristic of these items are voluminous. Depending on the demand and availability of their storage space, the stocking policy controlled. They require protecting from moisture and excess heat, their aesthetic character is most important in view of the marketability.
Machinery spares
Machinery spares pattern of consumption is rather unpredictable. The obsolete inventory in most cases comprises only the spare parts.
A proper coordination, planning, procurement, issue, monitoring, and control can give better results. Regular collection, collation and analysis of consumption data reduce the problem of a stock out.
The damage due to non-availability of a part is several times more than the cost of the part itself; leading to hoarding of machinery spares stock.
A collaborative approach between purchase, stores and engineering departments will save a lot of money in this area.
Finished goods
The input to the stock is as per the production schedule, while the output depends on market conditions in a consumer-oriented industry. A slack market leads to stockpiling and a buoyant market leads to scarcities. Shelf life is an important consideration. Storage space should be adequate to meet these extreme conditions. The system of control should be oriented towards coordination not only within an organization but also with the competition and consumer profile.
Finished goods to be as near to the consumer as possible, in order to reduce transportation time, cost, double handling, etc. Periodic meetings with the users help identify problem areas and increase the service facility of stores. The guiding factor in all cases must be the cost of capital and benefits arising there from.
Jan 14, 2009
Way to save costs
Physical aspects of warehousing
Physical aspect such as location, layout, and type of material, shelf life, handling equipment, storing methods, bins, racks, a passageway between stacks or displays of goods, use of preservatives play a crucial role in the context of cost reduction.
The performance of warehouse measured by cubic space and hence utilization of heights assumes importance. This storing height has to decide based on ease of storage, retrieval, and type of packages, load characteristics, flooring, roofing, ladder facility and handling facilities.
The upper limit of stacking heights depends upon the roof structure, lighting arrangements, exhaust arrangements, fire prevention facilities, use of sprinkler system, safety considerations, handling methods etc.,
Allow clearance at the top 2 to 4 feet and about six inches at the bottom free movement and prevention of dust accumulation.
Give adequate provisions for maintenance of buildings, yards, handling equipments, storage areas, wiring systems, roads etc.
Stacking method:
Unit loads to stack one over the other, in such a way to make it possible to issue out a part of the stack from top to bottom without disturbing the rest of the stack. Stability of the stack has to be ensured to prevent crashing loads. The advantage is space utilization is high, no special requirement of racks or bins. Suitable for bulk when variety is less and quantity is more.
Bins and racks
These wooden or metallic structures divide storage space in to compartments to enable items to keep individually. Arrange parallel, one foot away from walls, back to back allowing sufficient moving place. They can reach up to the roof leaving two feet above. Number properly and a file to be maintained indicating the bin number and its contents.
Loading and unloading areas
Exercise care to have sufficient space for proper maneuvering of vehicles and handling equipment. Provide weighing scale at the unloading bay of the receipt section.
Safety measures
Protection against fire hazards is one of the primary safety measures to undertake in a warehouse.
Fire is a major menace in warehouses, because of the inflammable nature of materials stored.
In case of an accident, an extinguisher on hand is better than brigade coming ten minutes later.
There must be early detection of fire and a fire fighting system, which can swing into action at once.
Fire extinguishers at strategic points, junction of gangways are immense help.
Provide a bucket of sand and another with water besides adequate number of fire extinguishers.
Gas extinguishers are hazardous.
Provide First aid and medical kits at all points
Install fire alarms and smoke detectors throughout the stores.
Inspect and update fire equipments on regular intervals.
Develop, train and retrain fire-fighting teams within the organization.
Protect pilferage. Prevention is better than cure.
Costly items that are small enough to carry are likely to pilfer.
Arrange caged enclosures or closed shelves with locks for available items to limit the access. Restrict the number of people who will have the key. Establish foolproof check out system.
Appealing to the moral value and ensuring that the wages of the workers are comparable to other organization may help reduce pilferage.
Preservatives in storage
If materials are to be stored without depreciation of their physical properties they have to be guarded against the effects of dampness, rain, dryness, heat, cold, humidity, temperature variations, dust, dirt, attack by insects, fungus formation, and other biological aspects.
Chemical items
All containers must be labeled and storage areas demarcated by visible signs.
The storage place containing chemicals well ventilated far from fire hazards. Incompatible chemicals must not be stored together.
Issue on a first in first out basis will reduce the incidence of losses in warehouses. Special care on expiry date is an exception for first in first out. The material getting expired soon to be issued out first.
Cleanliness, inspection, proper ventilation, and use of preservatives may reduce the wastage.
Physical aspect such as location, layout, and type of material, shelf life, handling equipment, storing methods, bins, racks, a passageway between stacks or displays of goods, use of preservatives play a crucial role in the context of cost reduction.
The performance of warehouse measured by cubic space and hence utilization of heights assumes importance. This storing height has to decide based on ease of storage, retrieval, and type of packages, load characteristics, flooring, roofing, ladder facility and handling facilities.
The upper limit of stacking heights depends upon the roof structure, lighting arrangements, exhaust arrangements, fire prevention facilities, use of sprinkler system, safety considerations, handling methods etc.,
Allow clearance at the top 2 to 4 feet and about six inches at the bottom free movement and prevention of dust accumulation.
Give adequate provisions for maintenance of buildings, yards, handling equipments, storage areas, wiring systems, roads etc.
Stacking method:
Unit loads to stack one over the other, in such a way to make it possible to issue out a part of the stack from top to bottom without disturbing the rest of the stack. Stability of the stack has to be ensured to prevent crashing loads. The advantage is space utilization is high, no special requirement of racks or bins. Suitable for bulk when variety is less and quantity is more.
Bins and racks
These wooden or metallic structures divide storage space in to compartments to enable items to keep individually. Arrange parallel, one foot away from walls, back to back allowing sufficient moving place. They can reach up to the roof leaving two feet above. Number properly and a file to be maintained indicating the bin number and its contents.
Loading and unloading areas
Exercise care to have sufficient space for proper maneuvering of vehicles and handling equipment. Provide weighing scale at the unloading bay of the receipt section.
Safety measures
Protection against fire hazards is one of the primary safety measures to undertake in a warehouse.
Fire is a major menace in warehouses, because of the inflammable nature of materials stored.
In case of an accident, an extinguisher on hand is better than brigade coming ten minutes later.
There must be early detection of fire and a fire fighting system, which can swing into action at once.
Fire extinguishers at strategic points, junction of gangways are immense help.
Provide a bucket of sand and another with water besides adequate number of fire extinguishers.
Gas extinguishers are hazardous.
Provide First aid and medical kits at all points
Install fire alarms and smoke detectors throughout the stores.
Inspect and update fire equipments on regular intervals.
Develop, train and retrain fire-fighting teams within the organization.
Protect pilferage. Prevention is better than cure.
Costly items that are small enough to carry are likely to pilfer.
Arrange caged enclosures or closed shelves with locks for available items to limit the access. Restrict the number of people who will have the key. Establish foolproof check out system.
Appealing to the moral value and ensuring that the wages of the workers are comparable to other organization may help reduce pilferage.
Preservatives in storage
If materials are to be stored without depreciation of their physical properties they have to be guarded against the effects of dampness, rain, dryness, heat, cold, humidity, temperature variations, dust, dirt, attack by insects, fungus formation, and other biological aspects.
Chemical items
All containers must be labeled and storage areas demarcated by visible signs.
The storage place containing chemicals well ventilated far from fire hazards. Incompatible chemicals must not be stored together.
Issue on a first in first out basis will reduce the incidence of losses in warehouses. Special care on expiry date is an exception for first in first out. The material getting expired soon to be issued out first.
Cleanliness, inspection, proper ventilation, and use of preservatives may reduce the wastage.
Jan 13, 2009
Layout.Security.Safety.
Layout
The general principle is to minimize the total kg-km of transportation of materials, within the constraints imposed by the other environmental conditions.
It is advantageous to have the warehouse to the nearest point of usage.
Ensure adequate precautions for security against fire, leak, damage, pilferage and safety.
Handling losses at be bare minimal.
The warehouse lay out must ensure the right material in the right place, and serving the user in the most effective manner through the shortest possible distance, in the least amount of time.
Security and safety
Since stores is money (in the form of stocks), the in-charge is the custodian of the stores, he is responsible for its security. Security in all senses - fire, leak, damage, pilferage, deteriorating in storage, shelf life, handling losses, Short and excess receipt or issue, theft, etc.
The security force or the watch and ward staff keep vigil throughout the day and night, not only in stores but the entire premises of the organization.
All warehouses are to have proper locking arrangements and periodic checks to be carry.
Unauthorized entry and exit must avoid.
Safety devices like burglar alarms, smoke detectors, and fire fighting equipment to be installed. Safe working loads to be displayed. Use of protective clothing, hand gloves, helmets and gumboots and safety rules to observe by all.
Excessive fatigue should be avoided.
Provide adequate lighting, ventilation and moving space.
Prevent Electrical short circuit by way of periodical checks on wiring and fittings.
Provide proper emergency exit wherever necessary.
Train in first aid.
Use equipments like forklifts, overhead cranes etc with caution and by trained personnel only.
Handling procedures, in case of accident what to do signals are displayed on most of the original labels of the manufacturers. Manufacturing and expiry dates, batch details are mentioned by almost all manufactures wherever necessary.
Where to use and not to use hooks display and how many to stock vertically are displayed by the manufacturer.
Keep the original labels and signals intact. Follow these instruction of label for your own safety. Avoid costly damages to men, material.
No smoking is a strict norm to be followed.
The general principle is to minimize the total kg-km of transportation of materials, within the constraints imposed by the other environmental conditions.
It is advantageous to have the warehouse to the nearest point of usage.
Ensure adequate precautions for security against fire, leak, damage, pilferage and safety.
Handling losses at be bare minimal.
The warehouse lay out must ensure the right material in the right place, and serving the user in the most effective manner through the shortest possible distance, in the least amount of time.
Security and safety
Since stores is money (in the form of stocks), the in-charge is the custodian of the stores, he is responsible for its security. Security in all senses - fire, leak, damage, pilferage, deteriorating in storage, shelf life, handling losses, Short and excess receipt or issue, theft, etc.
The security force or the watch and ward staff keep vigil throughout the day and night, not only in stores but the entire premises of the organization.
All warehouses are to have proper locking arrangements and periodic checks to be carry.
Unauthorized entry and exit must avoid.
Safety devices like burglar alarms, smoke detectors, and fire fighting equipment to be installed. Safe working loads to be displayed. Use of protective clothing, hand gloves, helmets and gumboots and safety rules to observe by all.
Excessive fatigue should be avoided.
Provide adequate lighting, ventilation and moving space.
Prevent Electrical short circuit by way of periodical checks on wiring and fittings.
Provide proper emergency exit wherever necessary.
Train in first aid.
Use equipments like forklifts, overhead cranes etc with caution and by trained personnel only.
Handling procedures, in case of accident what to do signals are displayed on most of the original labels of the manufacturers. Manufacturing and expiry dates, batch details are mentioned by almost all manufactures wherever necessary.
Where to use and not to use hooks display and how many to stock vertically are displayed by the manufacturer.
Keep the original labels and signals intact. Follow these instruction of label for your own safety. Avoid costly damages to men, material.
No smoking is a strict norm to be followed.
Jan 12, 2009
The Store.
The store is to facilitate receipt, storage, retrieval and issue.
Return on investment (ROI): The major corporate objective in any organization is to improve ROI.
The return on investment is return divided by investment.
Investment consists of fixed capital and working capital.
Improving ROI is possible by increasing the return or by decreasing the investment (fixed capital and working capital).
Fixed capital is not possible to reduce but return increase is possible by increasing the capacity utilization.
Approximately seventy to ninety per cent of the working capital gets block in inventories.
One important method of increasing the return is to reduce all kinds of inventories stocked in warehouses.
Material enters in to organization as raw material, components, spares or consumables. These materials converted in to finished goods and sold.
Input materials contribute to over sixty per cent of the value of finished goods.
These percentages are approximate and vary depending on the industry.
Any reduction in the inventory and its associated costs will increase the profitability substantially.
This shows the importance of economy in warehousing and the interrelated areas of purchasing, planning, logistics and inventory control.
Proper identification of how the materials have been consumed and an accurate updating of warehouse records on receipt, issue, price, balance, wastage, rejection losses, etc., are the initial steps involved in effecting economy in stores.
Reducations in obsolescence, waste minimization, reduction in queuing etc are some of the areas where stores personnel will play a major role in increasing the profitability.
Return on investment (ROI): The major corporate objective in any organization is to improve ROI.
The return on investment is return divided by investment.
Investment consists of fixed capital and working capital.
Improving ROI is possible by increasing the return or by decreasing the investment (fixed capital and working capital).
Fixed capital is not possible to reduce but return increase is possible by increasing the capacity utilization.
Approximately seventy to ninety per cent of the working capital gets block in inventories.
One important method of increasing the return is to reduce all kinds of inventories stocked in warehouses.
Material enters in to organization as raw material, components, spares or consumables. These materials converted in to finished goods and sold.
Input materials contribute to over sixty per cent of the value of finished goods.
These percentages are approximate and vary depending on the industry.
Any reduction in the inventory and its associated costs will increase the profitability substantially.
This shows the importance of economy in warehousing and the interrelated areas of purchasing, planning, logistics and inventory control.
Proper identification of how the materials have been consumed and an accurate updating of warehouse records on receipt, issue, price, balance, wastage, rejection losses, etc., are the initial steps involved in effecting economy in stores.
Reducations in obsolescence, waste minimization, reduction in queuing etc are some of the areas where stores personnel will play a major role in increasing the profitability.
Jan 11, 2009
PRINCIPLES OF WAREHOUSE ORGANIZATION
Define and spell out resposibilities according to company objectives, per position working in warehouse..
Responsibility to commensurate with authority.
No change in scope and responsibility without prior discussion.
No employee should be subject to orders for more than a single source.
Orders should never be given to subordinates superseding a responsible executive.
Critisism should be done privately and not in open meetings.
All major and minor disputes between departments should be sorted out in coordination meetings.
The immediate superior should approve promotion, increments, disciplinary action, etc.,
No employee should be assistant as well as critic at the same time.
The quality of the assistant's work should be periodically checked and mistakes to point out so that corrective action can be taken at once.
For carrying out the above tasks effectively, the span of control or number of employees reporting to an executive should not be too large.
It is advantageous to develop an organisation’s warehousing manual describing all aspects of stores function.
Responsibility to commensurate with authority.
No change in scope and responsibility without prior discussion.
No employee should be subject to orders for more than a single source.
Orders should never be given to subordinates superseding a responsible executive.
Critisism should be done privately and not in open meetings.
All major and minor disputes between departments should be sorted out in coordination meetings.
The immediate superior should approve promotion, increments, disciplinary action, etc.,
No employee should be assistant as well as critic at the same time.
The quality of the assistant's work should be periodically checked and mistakes to point out so that corrective action can be taken at once.
For carrying out the above tasks effectively, the span of control or number of employees reporting to an executive should not be too large.
It is advantageous to develop an organisation’s warehousing manual describing all aspects of stores function.
Jan 10, 2009
Why to stock?
Identification of the need is the prime requisite. Then materials required are being procured or produced. It takes considerable time. The time between identification of the need and converted into available materials ready for use is called lead time.
Materials are required to be held in stock to meet consumption requirements of this period.
In addition to the lead time there can be delays in procurement or unexpected increases in the rate of consumption.
The materials stocked in store is to provide for this contingency.
Also materials stocked for speculative purposes, expecting price rise due to increased demand or shortages in supply.
The storage of raw material and finished goods is regarded as a key element of marketing strategy.
Functionally goods held in stock enable a smooth adjustment of demand and supply.
Warehousing is not the simple act of storing goods, but rather a package of services that enables the smooth running of wheels of industry - Supplying raw materials to the operation executives and finished goods to the customers.
The warehouse should supply goods of the right quality at the right time in the right quantities to meet the pace of consumption.
It has to forecast the demand to enable procurement, receive, handle, store and transport material with out breakages or losses. Reduced wastage and obsolescence result in increased returns.
Thus the prime purpose of warehousing is strategic deployment of marketable goods in such a way as to minimise the total distribution costs and maximise customer service.
Jan 6, 2009
INTRO - Supply Chain Management (SCM) & my Blog
Dear Friends,
Very Happy New Year to you all.
With my qualification and experience, i taken a resolution this year that Let me try and help the people who want some help, guidance and support in the subject area of Supply Chain Management and this is the result.
An Idea of blog. The title of the blog is you (u), me that is I, and Supply Chain Management (SCM).
This effort is aimed at students, aspiring entrants in to the area of Supply Chain, Professionals already in the area and looking for some guidance, to the experts who want to share their knowledge and experience.
It is aimed to be an outlet to air your ideas, questions, answers and suggestions.
Supply is business.
Supply chain management is Business Management.
Business we manage for profits.
Profit maximization or risk minimization is the essence of business management.
It is you who is involved or likely to be involved in day to day business of problem solving of your organization.
It is me, who spent about 25 years in the field of Materials management.
My philosophy is you have one rupee, i have one and if we swap we have one each.
You have one idea and i have one and if we swap we have two each.
So our interaction thru this blog will be for mutual benefit.
The participation is only mantra for the growth.
With this few words, I V.R.Sharma request you all come and join my blog and make it a success.
Knowledge is power, let us share it.
Very Happy New Year to you all.
With my qualification and experience, i taken a resolution this year that Let me try and help the people who want some help, guidance and support in the subject area of Supply Chain Management and this is the result.
An Idea of blog. The title of the blog is you (u), me that is I, and Supply Chain Management (SCM).
This effort is aimed at students, aspiring entrants in to the area of Supply Chain, Professionals already in the area and looking for some guidance, to the experts who want to share their knowledge and experience.
It is aimed to be an outlet to air your ideas, questions, answers and suggestions.
Supply is business.
Supply chain management is Business Management.
Business we manage for profits.
Profit maximization or risk minimization is the essence of business management.
It is you who is involved or likely to be involved in day to day business of problem solving of your organization.
It is me, who spent about 25 years in the field of Materials management.
My philosophy is you have one rupee, i have one and if we swap we have one each.
You have one idea and i have one and if we swap we have two each.
So our interaction thru this blog will be for mutual benefit.
The participation is only mantra for the growth.
With this few words, I V.R.Sharma request you all come and join my blog and make it a success.
Knowledge is power, let us share it.
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