FUNCTIONS OF THE STORES PURCHASE ORGANISATION Stores purchase organization is a vital part of industrial concerns.

Public and private utility undertakings, agricultural enterprises, municipal authorities, armed services and government departments. It has, therefore, to be tailored to suit the particular needs of the organization, it is designed to serve. The functions of the stores purchase organization are : 1. Procurement of materials and equipment. 2. Inspection. 3. Inventory control. 4. Market research. 5. Vender development. 6. Product research and development. 7. Standardization. 8. Material planning and programming. 9. Disposal off surplus and obsolete materials. 1. PROCUREMENT OF MATERIALS AND EQUIPMENT All materials and equipment except those required against specific generation and transmission projects shall be purchased by this organization. The materials and equipment in required quantities shall be purchased at the lowest cost in consistence with the desired specifications at the proper time to meet the needs of the departmental works. 2. INSPECTION Inspection will involve the following functions :i) To inspect the materials and equipment ordered at the manufactures premises or the elsewhere as agreed to, so that the products offered comply with the specifications of the Board.

ii) To arrange for inspection of manufacturers' works godowns for registration purposes and also for assessment off their capacity, capability to manufacture some particular type of stores. 3. INVENTORY It is most important to maintain the value of the stores in stock at the lowest practical level at all times in order to economise in the use of working capital and to minimise the cost of storage. There is, however, some conflict between the need to maintain liberal supply of materials and the need to economise in stock holding. On the hand, the other stock held, the easier it is, have required items readily available on demand; on the other hand the more stock held, the greater the cost incurred. It is thus necessary to seek, find, operate a satisfactory compromise between these two opening forces. The inventory control will thus involve the following processes :- iii) Assessing the items to be held in stock. iv) Deciding the extent of stock holding off items individually and collectively. v) Regulating the input of stock into the central stores. vi) Regulating the issue of stock from store houses. In order to carry out the above functions, the Chief Purchase Officer, will have some sort of a control over the departmental stores and his orders to process the above mentioned ideas will be accepted by the units handling the stores. 4. MARKET RESEARCH : This organisation will conduct market research with an eye on the following objectives :i) Time taken for a particular item to be delivered. ii) The trend of prices for different items of stock. iii) The type of business houses and their locations from where the right type of stores can be procured,

iv) Time ordering, when the prices may be the lowest for particular items. v) That stores and equipment are to be ordered from what country or a firm. 5. VENDER DEVELOPMENT In the present day market of scarcity, may materials have become items of monopoly and the firms concerned are charging exhorbitant prices. This organisation will make efforts to develop contracts with potential manufacturers and suppliers in this respect, so that the stores are purchased at competitive prices. 6. PRODUCT RESEARCH/DEVELOPMENT Research will be conducted to find out alternative stores and equipment for the ones which are not readily available or can be procured only on exhorbitant cost. 7. STANDARDISATION Standardisation is one of the outstanding achievement of modern times. In all undertakings like ours, where construction, maintenance, repairs and operating items form bulk of the purchases, there is a great scope for standardising them so as to avoid overlapping, duplication etc. The process off standardisation has to be carried-out with the following motive in mind :i) To reduce the number of items stocked and thereby to decrease the inventories. ii) To increase the inter-changeability of fittings and spare parts. iii) To reduce the cost and labour involved in the preparation of specifications etc. iv) To substitute the common use items for specially designed parts. 8. MATERIAL PLANNING AND PROGRAMMING Public sector utilities like the State Electricity Boards have to perform very diversified functions of generation, transmission and distribution of power, which involve very large quantities off stores and equipment running in thousands of items. Most of these stores have long lead times of procurement. Hence, the planning and programming of materials has to be

done very much in advance. The planning will be based on the following ideas :i) Purchase plan for a year will be prepared at least 12 months in advance of the year. ii) This plan will be based on the half/yearly indents to be received from the field units in the form specified at annexure-I. iii) The indents of the field units will be based on the working programme for the year and the budgets allocated. iv) The indents will also have relation to the reserve stock limits. v) The case for the purchases involving foreign exchange will be moved much in advance of the date on which these materials are actually required. 9. DISPOSAL OF SURPLUS AND OBSOLETE STORES Stock represents cash and any dead stock is un-productive capital and has thus to be turned productive. This is done by disposing off the surplus and obsolete items. In this respect, this organisation will have the following responsibilities :i) All items declared surplus/obsolete will be reviewed once in a year. ii) The items ultimately found surplus/obsolete will be collected at one place and will be disposed-off in a manner, as directed by the Board.