Chapter No. 01:: Stores Management of Universities in Maharashtra

Stores Management Of Universities In Maharashtra.
"The University stands for humanism and

tolerance, for reason, for adventure of ideas and for
the search of truth. It stands for the forward march of
the human race towards even higher objectives. If the
universities discharge their duties adequately then it is
well with the nation and the people."-
Pandit Jawaharlal Nehru
Chapter No. 01:
Introduction.
• Introduction.
• Storekeeping.
• Stores Management.
• Stores and Purchase.
• Functions Of Stores.
• Scientific Store Management.
• Stores Management Centralized & Decentralized
Stores.
• Stores Location And Layout.
• Stores Systems & Procedures.
• Stock Verification.
Chapter No. 01: Introduction. Page 1

Introduction:
Store management is one of the key determinants of

the performance of an organization. The efficiency of many a
department depends on the efficiency of stores. Store
management includes the policies, procedures, and
techniques employed in maintaining the optimum number
or amount of each inventory item. The objective of stores
management is to provide uninterrupted service levels at
minimum cost. Stores management covers the activities of
handling material deliveries, their physical control,
preservation, efficient handling, minimization of damage
and obsolescence, and safe disposal. Stores processes
include records maintenance, location and inventory
verification. The right approach to storage helps reduce
pollution, unnecessary wastage and other inventory costs.
Store management involves a lot of administration. Keeping
inventories, maintaining environment depending on type of
goods, financial aspects of related to stores such as
payments of goods, employees etc and customer services are
part of store management profession.1

Store management personnel have the responsibility to

look after the daily operations and works of a store. A store
manager needs to be equipped with all the information in
relation to:
• Finance,
• Customer care,
• Housekeeping,
• Special requirements of storing goods,
• HR and legal aspects of store management,
• Keeping inventory,
• Handling grievances of customers as well as
employees,
• Advertising and marketing
A store management can help a person acquire all traits
needed to manage a store. These skills include good
communication skills, professionalism, mathematical skills
and social skills.
As per the Alford and Beatty - ‘Storekeeping is that

aspect of material control which is concerned with physical
storage of goods’ According to Maynard responsibilities of
store management are ‘to receive materials, to protect them
while in storage from damage or unauthorized removal, to
issue the materials in the right quantities, at the right time,
to the right place and to provide these services at the least
cost.’ Store keeping is a service function which deals with
the physical storage of goods under the custodianship of a
person called storekeeper or store in-charge. Goods stored
may be either, stores or stocks.
Storekeeping:
The task of store keeping relates to safe custody and
preservation of the materials, stock to their receipts, issue
and accounting. The objective is to efficiently and
economically provide the right material at the time when it
is requires and in the condition in which it is required.2 It
will be appreciated that store keeping adds nothing to the
value of a product. However, it is an essential function in
any organization. The financial view is that storage is just
an overhead - a cost with no return, and hence the
importance of economic operation, keeping efficiency at a
desired level. The capital cost components consists of the
expenditure on land, building and roads, yards, equipment,

machinery and other facilities provided. The revenue
expenditure consists of salaries and wages, insurance,
maintenance costs, stationary, communication expense and
the cost to maintain the inventory.
The term storekeeping covers the actual handling of
the items or materials received into, held in and issued from
the Store. The work involves:
• Receiving items and materials, including the inspection
of them;
• Storing the various stock items in the most appropriate
fashion, binning and/or racking them by the best
methods, and placing them in such a way that any
item or material in the Store can be located quickly
and easily when it is required;
• Ensuring the safety of all items and materials whilst in
the Store - that is, protecting them from pilfering,
theft, damage and deterioration;
Ensuring, when necessary, that items issued from the Store
are so packed that they will not be damaged or caused to
deteriorate whilst in transit to their destinations.

Stores Management:
A professionally managed Store has a process and a

space within, to receive the incoming materials, keep them
for as long as they are not required for use and then to
move them out of stores for use. In a manufacturing firm V
this process forms a cycle to maintain and run the activities

of Stores.3 The basic responsibilities of stores are to act as
custodian and controlling agent for parts, supplies, and
materials, and to provide service to users of those goods.
Typically and at times essentially, a store has the following
activities that are managed through use of various
resources and are thus called Stores Management:
• Receiving of incoming goods.
• Safe keeping of goods in Custody.

• Disposal of undesirable goods.
• .Inventory Management.
• Housekeeping and record maintenance.
It all starts with a suitable lay-out design of stores.

Depending upon the nature of items used for processing by
the organization the lay out and type of stores are selected.

For example, a process that requires use of raw materials,

not costly enough, an open and nearby stores with truck /
rail inside movement possibility can be adequate. Similarly,
for storing costly material, a closed and restricted type of
stores shall be needed. However, irrespective of the type and
lay out, any Stores would have, as its starting activity,
receiving and accounting of the incoming goods. This part of
Stores is known as Receiving Bay.
Once the material has been received and cleared

through inspection and accepted for use, it needs safe
custody till it's actually used. It calls for a separate physical
storage space, open or closed, as per need. It maintains all
documents that are able to trace an item, show all its
details and preserve it up to its shelf life in the manner
prescribed or till it is issued for use. This part of Stores is
called Custody. Thus the role of Custody is to receive and
preserve the material and then to issue it to the user, as
and when needed. A stage comes when the material is
needed for use. A store thus releases the material from its
custody to the user department and the process is called

'issue of goods. It might also happen that after partial use,

some materials having useable value in future are returned
to the stores and thus they also become part of the custody
again. 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, in order
to clear space for other incoming goods. This activity is
known as Disposal of goods for which auction etc. is done.
Since the material has a cost,. the organization would

definitely like to incur optimum cost on this account and
thus there is a need to manage the materials within stores
such that the total cost of maintaining materials remains
optimum. The materials, lying unused but have future
economic value are said to form inventory which needs
professional handling. Inventory control / management thus
are a vitally important aspect of any stores function. One of
the basic functions of stores is to account for every material
received in Stores by maintaining proper records of all the
incoming, stored and outgoing materials so that proper
accounting and audit trail is maintained. Hence, record

keeping is a vital function of stores. Of course, it also goes

along the various activities and with development in the
information technology domain, the record keeping in stores
too is through electronic medium making the whole process
smooth and efficient.
Any Stores as such is a physical entity which deals

with material receipt, preservation and issue. Material
handling therefore is another vital function. Just as Lay out
of a Stores is designed considering the nature of material
Stores has to handle, material movement equipment and
implements also are important. Within a typical
organization, its Stores is seen having Forklifts, Over head
Cranes, Trolleys etc inside the Stores and trucks, Dumpers
and Railway wagons as outside Stores equipment to handle
materials.4
Stores and Purchase:

The Stores and Purchase module constitutes the vital
role in utilization of company resources as Management
view is always to decrease the lock period of its raw
material. In this regard, every aspect of business
transaction is taken care of by defining the master such as
store master, Item master, UOM, Bin master, finished goods
master etc. Also the various input transactions such as
Gate Entry, Material Requirement Note (MRN), Material
Requisition Entry (Internal), Material Issue, Store return,
Gate pass etc.5 The following are the important objectives of
stores and purchase module.
• Facilitate the movement of incoming and outgoing
physical goods involving multiple manufacturers and
customers.
• Decrease overall operating costs by converting
manual processes into automated and streamlined
processes.
• Sustain cost savings for all spend categories with a
standard, sustainable approach to strategic and
operational procurement.
• Decrease IT costs through usability and fewer
interfaces, freeing IT resources to focus on strategic
projects.

Functions Of Stores:
Traditionally stores function has been visualized as a

part of production department and was never given the
attention and importance it rightfully deserved.6 The
conventional practice is to locate the stores near user
departments so as to minimize material handling cost and
ensure timely supplies so as to allow smooth production.
The materials department is seldom consulted in aspects
such as stores location and layout. The following are the
principal functions of a store;
1. To receive raw materials, components, tools, spares,

supplies, equipments and other items and account for
them.
2. To provide adequate, proper and efficient storage and
preservation for all the items.
3. Physical checking of all incoming materials as per the
delivery challan / invoice and proper maintenance of
daily goods receipt register or records.
4. Arrange for inspection of incoming materials.

5. Ensure that goods inward notes are raised and
distributed without delay
6. Issue materials to the consuming departments against
authorized requisitions and account for the same.
7. Maintain accurate and up - to - date records of
material received, issued, rejected, disposed, and
quantity on hand of all the items.
8. Ensure that all documents relating to receipts and
issue are sent to stock control, accounts and other
concerned departments.
9. Undertake stock verification as per approved
procedure.
10. To highlight stock accumulation, discrepancies and
abnormal consumption and initiate appropriate control
action, wherever necessary.
11. To minimize obsolescence, surplus and scrap through
proper codification, standardization, preservation and
handling.
12. To ensure good housekeeping so as to minimize the
need for material handling.

13. To make available a balanced flow of materials so as to
economize on capital tied up in inventory.
14. To accept and store scrap and other discarded
materials.
Organization:
• Organization is a vehicle to achieve the predetermined
objectives.
• It is a framework of tasks, responsibilities, authorities,
and associated personnel.
• The type of organization must be geared to achieve the
desired objectives efficiently and economically.
• Organization is based on commonality of certain tasks
and specialization of work.
• It is an indispensible means to good management.
• A faulty organization structure can seriously hamper
its performance.

Steps In Organization:
• Identify the entire gamut of tasks to be performed.
• Group and re - group the tasks according to certain
well - defined common characteristics.
• Define and delegate responsibility and commensurate
authority.
• Establish reporting and structural relationships
between all positions.
Stores Organization Must Comprise Of The Following:
• Outline and communicate to all concerned, the
primary and other objectives of the store functions.
• Define clear - cut responsibilities.
• Bestow appropriate authority and practice delegation
of power to enable fulfilling the given responsibilities.
• Establish proper communication channels
• Allocate tasks to qualified personnel.
• In short, stores organization can be defined as the
systematic coordination and combination of efforts in a
fashion that results in an optimum efficiency and
minimum expenditure.

Scientific Store Management:
Storekeeping it is now realized, is as much as

science as production or marketing, it is a key result area
for management. Efficiency in production, maintenance and
distribution largely depends on the efficiency of the store
department and its personnel at the operational level.
Inventory management with its impact on the profitability of
a company, relies on the efficiency with which store
personnel maintain records, implement procedures and
report on performance.7 Scientific store management
benefits the organization in the following different ways.
Through-
1. Scientific stock control, it reduces losses due to

accumulation of inventories.
2. Efficient stores issues, it reduces down time in
production and increases profit.
3. Periodic reviews, it detects obsolete and non-moving
items and helps the firm to get rid of unproductive
inventory.
4. Follow up with purchase, it helps to avoid stock outs
and hence the production losses.
5. Proper records keeping, it provides exact picture of
inventory in stores to higher management.
6. Correct location, it reduces the time to retrieve and
issue materials.
7. Good housekeeping, it reduces disorder I chaos which
helps to minimize accidents.
8. Administrative control, it cuts down the risk of
pilferage, malpractices and theft.
9. Good storekeeping, therefore, is very important and
basic to any organization.
Stores Management Centralized & Decentralized Stores:
There are both advantages and disadvantages
associated with a centralized or decentralized stores. A veiy
big organization having a portfolio of numerous products
may have a huge main store along with number of smaller
decentralized store sections. This arrangement does away

with duplication of efforts in common activities.8 All items of
common usage may be stocked in a central store to keep the
inventory at optimum levels. Also receiving can be done
centrally so as to have effective communication links with

the purchase department and various suppliers. The

problem of centralization or decentralization is a vexed issue
and one cannot look for thumb rules to deal with the same.
It is more a matter of convenience and suitability to the
operating environment than a question of choice of one
structure over another. However the guiding principle has to
be that the overall stores control has to be unified in the
hands of a chief stores officer for effective coordination with
other interfacing departments and proper internal control of
stores.
Advantages Of Centralized Store:
The following are the advantages of centralized stores.
• Optimum level of service to users department.

• Better internal control,
• Economy in storage space and material handling.
• Single point delivery and single point inspection.

• Speedy communication with purchase department and
various suppliers.
• Provides opportunities for standardization,

• Probability of obsolescence is reduced due to higher
inventory turnover,
• Seers departments are provided with a wide variety of
materials.
• Avoids duplication of efforts.

/
Disadvantages Of Centralized Store:
The following are the disadvantages of centralized store.
• May create bottle necks in materials receipt, incoming
inspection and issues - the basic function of any
stores,
• It may not be sensitive to the needs of individual user
departments,
• May not be located at the optimum location and thus
result in increased materials handling and
transportation costs.
• Improper miss-control procedures may result
inaccurate shortages and un-anticipable performance.
• Requires more internal documentation,
• Risk is accentuated in case of natural or manmade
calamities such as fires.

Stores Location And Layout:
Store layout means physical arrangement of space for

storage, Materials movement, material handling equipment,
office and its records and thereby provide for the most
efficient receipt, Storage and issue of materials. Main
criteria for store layout are
• Easy receipt storage and issue of materials.
. • Sufficient space for easy movement of men and mater

il handling equipment.
• Optimum utilization of storage space.
• Clear identification of materials.
• Quick location of items.
• Ease in physical stocking.
• Protection against fire risk to the store and rest of the

establishment.
• Easier and efficient supervision of store.
• Adequate capacity and provision for future expansion.

Stores Management Of Universities In Maharashtra^
Materials within the stores must be arranged

keeping “efficient service” as the main criteria i.e. minimum
time consumed in receipt and issue of materials. Heavier
and bigger items should he stored near the issue window
while lighter and smaller items may be located in the bins
and racks farther from issue counter. Similarly, heavy items
should be kept in lower racks nearer to the ground level
while lighter items can he kept in the upper racks,
Frequency of issue of material should he considered while
deciding its location within the store. For efficient and
economic receipts and issues, fast moving items should he
store near the issue window. Systematic arrangement of
items in the store is necessaiy for their quick and easy
location at the time of issue. Different practices are found in
the industry. Some companies try to arrange the items
sequentially according to part numbers, some try to arrange
the items product wise or project wise or even department
wise while others arrange according to Code numbers.
General principles of locating materials within store are
given below.9
Chapter No. 01: Introduction.

The following decisions are a part of the location decision -
• One store or many stores?
• Should it report to the production department or to the

materials department?
• What transport facilities are to be used?
• Is there a chance or need for future expansion?
• What is the number and variety of materials used in

the institution?
Guiding Principles Of Store Location:
• Basic objective of stores is to maximize service to user

departments at optimum overall cost.
• Priority must be given to minimum material handling

and transportation expenditure.
• Incorporate in - built flexibility to deal with futuristic

requirements,
• Adequate communication links must be arranged for.
• Adequate safety measures must be available at hand,
• Preplan about the nature, quantity of materials to be
dealt with.

• Factor in the number of end users and suppliers.
• The determining factors of a proper stores layout are

economy and efficiency.
• An underutilized warehouse is indicative of wastage of

capital and one that holds too much represent wastage
of time and labour.
• The objective must be to ensure a continuous

unhindered workflow through the stores so that it can
operate continuously and provide optimum service.
Thumb Rules For Proper Stores Layout.
• Maximum store space utilization subject to minimum

material handling and maximum speed of movement,
• A straight flow is the simplest and must be used in

various combinations to form ‘u’, ‘e’, V etc flow.
• Arrange for separate, de-marketed areas for incoming,

outgoing material, materials received but yet to be
inspected, material received - inspected - and rejected,
toxic or hazardous material, scrap and obsolete
materials etc.

• An item must be locatable with minimum effort and

expense of time,
• A.dequate lighting, ventilation, and proper colour

schemes must be devised,
• Provide for heating, cold storage, air-conditioning, and

other environmental requirements as and when
necessaiy.
• Keep safely appliances such as goggles, aprons, hand

gloves, etc, at accessible places,
• Screen the stores department from unauthorized

access to other parties.
Stores Systems & Procedures:
The stores functions deals with three major activities:
• Receipt.
• Stocking.
• Issues.

Receipt Section:
• The receipt function is the last step in the purchasing

activity and the first link in the stores function.
• This deals with the function of receiving and physically
handling delivered materials, and verifying that the
deliveries correspond exactly as to the nature and
quantity as per specified in purchase order.
• Inspection of incoming materials ranges from simple
counting to elaborate laboratory testing and statistical
tests.
• All incoming supplies are received, checked and duly
inspected before further processing of storage or use.
• This section is also called as goods inward section.
Generally the incoming goods may be from one or more

of the following sources:
• Suppliers through receiving section on goods inward
note.
• User departments that return surplus stock, obsolete
stock and scrap on material return note.

• Transfer from other stores on store transfer note.
• Equipment received after maintenance and repairs on
store credit note or completion slip.
• Goods rejected by customers
• Outside parties, of sub - contracted goods
Functions Of Receiving Section:
The broad functions of a receiving section can be
outlined as follows:
• Receive incoming materials,
• Physically check received materials
• Arrange for speedy and proper inspection,
• Raise goods inward note,
• Notify user departments about availability or non
availability of materials requisitioned by them,
• Inform purchase section regarding excess supply,
shortage, or defective supply,
• Deliver material to appropriate stores for storage,
• Prepare record keeping.

Stores Systems & Procedures The Receipt Section:
• The tasks of goods inwards section starts even before
the materials enter the stores.
• When a purchase order is placed, one copy of the same
is sent to stores.
• The copy informs the stores in charge about the item
description, the quantity, quality / grade / type, and
delivery date, suppliers name etc.
• It is the task of the receiving section in charge to
classify such purchase orders as per a suitable base /
batch such as type of item, supplier, delivery date etc.
• This copy of the purchase order helps to preplan for
labour to receive and unload the material, make
adequate arrangements for separate space and inform
inspection department about probable schedule of
inspection.
• Once the suppliers dispatch the goods through their
carrier they arrange to send an advice note to the
receiving stores.
• Such an advice note provides information about date of
dispatch, carrier details, description of consignment,

packaging, labeling, handling instructions, value of the

consignment, reference of the corresponding
purchasing order etc.

• The advice note is sent in sufficient advance to help
make suitable arrangements and expedite clearance of
goods and related documents.
• On receipt of goods, those are physically verified and
tallied with the consignment note sent by the carrier.
• Thus, the three documents, viz. purchase order copy,

advice note, sent by the supplier, consignment note
sent by the carrier, must tally with each other and
with the received consignment
Systems & Procedures The Receipt Section:
Receiving section can be of various types. The

prominent types are discussed below:
• Centralized receipts: this is a part of a centralized

store set up where all materials are received, physically
checked, inspected and either stored for distribution to

users dr are directly dispatched to various sub - stores

along with the goods inward note.
• Semi - Centralized Receipts: In this arrangement the

record keeping part is centralized and special, high
value materials are received centrally. Most of the
other incoming material is directed to respective stores
and is checked and verified and got inspected by the
respective stores receiving section staff. This
arrangement precludes the possibility of bottlenecks
due to a heavy work load on the receiving section. It
also saves on transportation costs from central stores
to sub - stores and then to the user departments. The
central stores carry out task of preparing and
recording gin.
• Decentralized Receipts: This arrangement attaches a

receiving section to every store. This is usually used
when the volumes of incoming materials are usually
high and users departments are spread over a wide

geographical area. Gins are prepared separately at

each receiving section
Stores Systems & Procedures -The Receipt Procedure:
• All incoming materials must necessarily pass through

the receipt section and in no circumstance go directly
to the users department.
• The receiving in charge must complete all
documentation and paper work at the receipt stores
before the dispatch or storage of goods.
• On receiving the challan and other documents from
the carrier, the consignment is unloaded and is
checked against the packing list.
• Appropriate entries are made on the delivery note and
a copy of the same is returned to the carrier.
• If the delivery note is returned signed, without any

qualifying statements then the consignment is deemed
to be in proper condition.
• When materials are received from suppliers an entry is
made in the ‘daily goods receipt register’.

The Contents Of The Daily Goods Receipt Register:
• Date and time of receipt.
• Name of the supplier.
• Name of the carrier.
• Challan number and date.
• Item details and description.
• Quantity and value of items.
® Purchase order reference.
• Carrier details (RR number, lorry number etc.)
• Goods inward note reference.
• Rejected memo reference.
• Received by.
• Inspected by.
On filling up these details the next step is physical
verification by counting, weighing or measuring and tallying
the outcome with the challan or delivery note. The same is
also tallied with the purchase order. Normally random
sample checking of packages is done. The receiving section
staff does checking but it may be followed up by second
check conducted by the inspection department. The task of

the inspection department is to conduct a detailed

inspection in respect of quality and nature / type of goods.
The time element is important in the sense that any
uncalled delay at this stage locks in materials that may be
otherwise required for use by user departments. The
shortages must be claimed immediately as they are time
barred as per standard purchase contract. Any
discrepancies present have to be notified within a time
frame so as to inform the suppliers about follow up action.
Goods Inspection Note:
Once the goods are certified as acceptable by the

inspection staff an inspection report (gin) is prepared. This
report forms the basis of goods receipt note. The gin is a
certificate to the accounts department for clearing payment
of goods whenever due and for debiting the stores with the
value of goods received. It is also information to purchase
section regarding the receipt of goods, and an advice to the
stores to take the materials into its custody and record
them in their book.10

Gin typically gives the following information:
• Date of preparation of gin,
• Date of receipt of materials,

• Consignor
• Supplier’s name and challan number or invoice

number
• Purchase order reference
• Mode of transport
• Stores to which materials are to be sent
• Class and code number, description of materials
• Quantity received undamaged and number of packages

• Quantity advised, received, accepted, rejected etc.
• Transport and related charges paid / to pay

• Damage / short / excess remarks
• Inspection report or rejection note or discrepancy

report note number
• Signature of inspector
• Signature of receipt clerk

The gin must accompany all the materials sent for

storage, records or dispatch to users departments. Pre -
printed multicolored gins may be used for speedy
identification and records
Stores Systems & Procedures Inspection - Inspection:
Physical verification is followed by detail inspection.
• While physical, quantitative checking is a semi -

skilled task, inspection is a skilled operation and calls
for the arrangement of specialized training of
personnel, proper testing facilities and methods.
• Goods must be inspected for quality to ensure that

they adhere to specifications as described in the
purchase order.
• The first task is to ensure that the material delivered
are the same as those ordered, of the right quality -
dimensions, chemical characteristics, etc, and are in
proper condition.

• The inspection is particularly necessary in the case of

raw materials and components that go into the final
product.
• One or more inspectors of the inspection department
that may be a part of the materials department
generally cany it out.
• However it is desirable to have incoming inspection
done by independent inspectors so as to give an
unbiased view on the quality of material purchased.
• At times the user department may cany out

inspection.
Inspection may be performed in the receiving section

or in a place specifically demarcated for inspection.
Inspection is also carried out at suppliers’ premises if
specified in the purchase clause, or if payment is to be
made before delivery, if during manufacture of out sourced
components quality has to be ascertained, and to avoid last
minute rejections. Quality of raw materials such as iron,
alloy steel may be verified in a metallurgical laboratory.
Components, sub - assemblies, spares are checked with
relevant drawings and inspection equipments.
The Usual Inspection Methods Are As Follows:
• Visual - a very rudimentary method for checking
stationary items, groceries, etc.
• By touch - applied in case of textiles fabrics,

agriculture produce etc.
• By smell®- chemicals, powders, oils, are tested by this
method.
• By comparison with samples given by suppliers during
negotiations for awarding contracts
• By actual testing by metrological equipment.
• ISI test.
• Statistical quality control and related concepts such as
acceptable quality level (aql) may be used for
inspection.
Stores Systems & Procedures - Discrepancies:
• Various discrepancies such as - loss of package,

• Damaged packages, shortages, damages to goods,
• Wrong items supplied, excess supplies etc. may occur.

• These are notified to the suppliers in a discrepancy
report along with a covering letter.
• Copies of the report are sent to purchase section and
accounts department for appropriate action.
• Loss of packages: a short landing certificate must be
obtained from the dock authorities in case of
consignment shipped by sea and at the same time a
claim bill must be submitted to the steamer agent with
advice to the insurance company.
• Li case the package was sent by rail, endorsement
should be obtained on the railway receipt and the
claim should be preferred on the railways.
• If a package has landed but is not traceable, a not
found application is to be submitted to the port
commissioner who will initiate necessary
investigations.
In case of damaged packages a survey should be
arranged with the agent within three days of landing of
goods. If such a survey cannot be arranged, an insurance
survey should be conducted before collecting the material
from the dock and a claim for any loss or damage to articles

should be lodged with the insurance company. All original

packing lists must be preserved. In case of items dispatched
by rail, the package must be opened in the presence of
railway inspector and the station master and the list of lost
/ damaged articles must be prepared to claim the same
from railways or the insurance company.
• Minor shortages and damages: Such incidents can

only be noticed on opening the packages. Incoming
goods are usually insured and insurance company or
the supplier meets these claims. At times, if the claims
are not met one has to write off the value. The gin in
such cases will be accompanied by a write off
requisition to adjust the records accordingly.
• Major shortages and damages: As these involve

higher values these must be dealt carefully. All original
packages, packing slips, delivery challans, must be
preserved and insurance survey must be immediately
arranged. A claim will be preferred on the insurance
company and the consignor will be notified of the
same. At times it may happen that the package is
intact but there is a shortfall in the quantity of goods,
clearly implying that the goods were short shipped by
the consignor in the first place. Such claims may or
may not be accepted by the consignor, it has to be
routed through insurance company to settle the claim.
Any claims for damaged materials except those due to
defective packing, are usually met by the insurance
company.
• Shipping ivrong items: This is a result of shear
carelessness or oversight on the part of the supplier.
This occurrence must be immediately-notified to the
supplier and to the purchase department. The shipped
item must be held in a separate physical space until
further communication from the suppliers.
• Excess supply: at times suppliers send excess
quantity as an allowance for wastage in transit that is
usually not treated as excess supply. In case of
genuine excess supply the supplier and the purchase
department must be informed and the excess quantity

may be accepted or returned as per the advice of the
purchase department. In case of excess items are
retained the original purchase order may be amended
or the new one may be initiated.
Stores Systems & Procedures - Rejection:
If goods are rejected fully or partially a rejection note
form is raised and a copy is circulated to the purchase
section and to the supplier. Such material must be marked
appropriately and stored in a separate area to avoid mixing
with accepted lot or entering the normal flow of materials.

«
Stores Systems & Procedures - The Issue Section:
The term issue implies the normal supply of materials from
stores to various user departments. Efficient issue of
materials from the stores is the benchmark to judge the
performance of store function. Most user departments judge
the effectiveness of stores by the service levels of the stores.
For the purpose of issues the items can be classified into
two categories:

• Items issued on requisitions for direct use,
• Items issued on loan and scraped in due course.
The factors to be taken care off;
• Authorization of issues.
• Requisitions.
• Material indents forms.
Stores Systems & Procedures Accounting / Pricing

Rules Governing Issue Of Materials:
Pricing Rules Governing Issues Of Materials:
• First - In - First Out Method (FIFO Method)

• Last - In - First - Out - Method (LIFO Method)
• Average Cost Method
• Replacement Price Method

• Actual Price Method
• Inflated Price Method.
The materials stored in the stock - room are issued to

various jobs or production departments against the
authorized materials requisitions. The issues are recorded
in the store ledger and the respective jobs or production

departments are debited with the price of the material
issued. As the time of purchases and the time of issues are
mostly different and the market price of the materials tends
to vary, the problem of pricing the materials issued
necessitates certain policy formulations.11 It is an
important consideration not only under store management
but also for costing and pricing policies. The fundamental
consideration is whether to price the issues at historical
price i.e., the original purchase price, at the replacement
price i.e. the prevailing market price at the time of issue or
at some other price. The various methods are used for
pricing the material issues which are based on different
principles.
Stock Verification:
The store’s manager holds the physical custody of the

materials and is responsible for safe upkeep as well as for
any major discrepancy. He must constantly review the
stocks and reconcile the physical and book stocks, which
differ in almost all organizations. The magnitude of this

problem will increase as the number of transactions
increase, because mistakes may be committed in
transactions and this can accumulate to major
discrepancies.12
• Issues without indents, improper check of receipts,
• Pilferage, obsolescence, deterioration and damage due
to different causes of improper storage,
• Shrinkage, evaporation, spillage, etc. are other factors
that have to be considered in this context.
• In order to exercise strict control on the above, the
store manager must verify the stocks periodically.
Experience indicates that many discrepancies in practice
are due to improper documentation, like -
o Complying with urgent issues without vouchers,
o Delays in posting the receipts and issues and
o Issue by numbers, receipt by weight and
accounting by numbers, etc.

Process Of Verification:
Stock verification can be defined as the process of

physical counting, weighing or measuring the stock of
materials that is held and making a record of these figures.
Normally personnel from the accounts department are given
this responsibility. Sometimes the auditors ( or bankers to
whom the stock is hypothecated) - also undertake the
verification of stocks on a sample basis ; in order to check
the reality of the performance statements. A well defined
verification process, can also pinpoint any drawbacks or
shortcomings in the methods of storage, movement of
materials, handling of materials, obsolescence, etc.13 A
regular verification process ensures that the system and
procedures laid in the manual are adhered to.
Physical verification of stocks started off as a periodic

exercise, usually coinciding with the annual account
closing, under the direction of accounts department. This
procedure acting as a postmortem exercise can stop the
normal function of the plant towards the year end, if the
number of items is large. Since there is urgency for quick

completion, this may lead to an ineffective verification
process. To overcome this difficulty, materials are checked
throughout the year and verifications are so staggered, that
all materials are covered in a year. It will be advantageous to
cover the high consumption value an items more than the
other items in this perpetual continuous system. The
verification process, whether periodic or perpetual should be
thorough, or well organized weighing and the unit of
measurements must be consistent and the measuring
instruments must be properly calibrated, so that measuring
errors are minimal. Care should be taken to avoid double
counting, overlooking items kept at old places, with
ancillaries and in transit, etc.
The process of physical verification can be complete
only if necessary follow - up action is planned. After
tabulation of physical stock, attempts should be made to
reconcile with book balance, indicating operating stock plus
receipt minus issues. It is very common that the two sets of
figures for each item may not tally and hence the problem
arises in stores management. A detailed investigation is

called for, if there are major differences particularly in high
value items, to avoid recurrence of the same in future.
Usually, organizations fix - up limits for discrepancies and
discrepancy vouchers are signed by the appropriate
authorities. However, stock verification should not be
perceived as a witch hunting process and store personnel

«
must be involved in the exercise. The organizations will
gain, if the stores personnel are motivated by a proper
development of the atmosphere, culture and value systems.
References:
1. http: / /www.hunt4career.com/basics-of-store-
management
2. Agrawal C.B. - Store Keeping and Purchasing - King
Books, Delhi.
3. Agrawal C.B. - Store Keeping and Purchasing - King
Books, Delhi.
4. http: / /www.materialsmanagement.info
5. G.Vidya Sagar 8s M. Sri Laxmi - Principles and
Practice of Drug Store Administration and Business
Management - Kalyani Publishers, New Delhi.

6. K.S. Menon (1996) - Stores Management -

Macmillan Publishers India, New Delhi.
7. H Kaushal (2003) - Case Study Solutions Materials
Management - Macmillan Indian Limited New Delhi.
8. Carter, Ray; Price, Philip M.; Emmett, Stuart (2004)
- Stores and Distribution Management - Liverpool
Academic Press
9. Chitale A. K., Gupta R. C., Gupta H. N.
(2009)Materials Management: Text And Cases - Phi
Learning.
10. Gopalakrishnan (2009) - Handbook Of Materials
Management - Phi Learning.
11. DattaA. K. (2009) Materials Management:
Procedures, Text And Cases - Phi Learning.
12. G.Vidya Sagar & M. Sri Laxmi - Principles and
Practice of Drug Store Administration and Business
Management - Kalyani Publishers, New Delhi.
13. Jhamb L.C. - Stores Management - Everest
Publishing House, Pune.

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Chapter No. 01:: Stores Management of Universities in Maharashtra

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Stores Management Of Universities In Maharashtra.

"The University stands for humanism and

Pandit Jawaharlal Nehru

Chapter No. 01:

Chapter No. 01: Introduction. Page 1

Store management is one of the key determinants of

Chapter No. 01: Introduction. Page 2

Store management personnel have the responsibility to

As per the Alford and Beatty - ‘Storekeeping is that

while in storage from damage or unauthorized removal, to

issue the materials in the right quantities, at the right time,

to the right place and to provide these services at the least

cost.’ Store keeping is a service function which deals with

the physical storage of goods under the custodianship of a

person called storekeeper or store in-charge. Goods stored

may be either, stores or stocks.

preservation of the materials, stock to their receipts, issue

and accounting. The objective is to efficiently and

economically provide the right material at the time when it

is requires and in the condition in which it is required.2 It

will be appreciated that store keeping adds nothing to the

value of a product. However, it is an essential function in

any organization. The financial view is that storage is just

an overhead - a cost with no return, and hence the

importance of economic operation, keeping efficiency at a

desired level. The capital cost components consists of the

expenditure on land, building and roads, yards, equipment,

Chapter No. 01: Introduction. Page 4

machinery and other facilities provided. The revenue

expenditure consists of salaries and wages, insurance,

maintenance costs, stationary, communication expense and

the cost to maintain the inventory.

The term storekeeping covers the actual handling of

the items or materials received into, held in and issued from

the Store. The work involves:

• Receiving items and materials, including the inspection

• Storing the various stock items in the most appropriate

fashion, binning and/or racking them by the best

methods, and placing them in such a way that any

item or material in the Store can be located quickly

and easily when it is required;

• Ensuring the safety of all items and materials whilst in

the Store - that is, protecting them from pilfering,

theft, damage and deterioration;

Ensuring, when necessary, that items issued from the Store

are so packed that they will not be damaged or caused to

deteriorate whilst in transit to their destinations.

Chapter No. 01: Introduction. Page 5

A professionally managed Store has a process and a

this process forms a cycle to maintain and run the activities

• Receiving of incoming goods.

• Safe keeping of goods in Custody.

It all starts with a suitable lay-out design of stores.

Chapter No. 01: Introduction. Page 6

For example, a process that requires use of raw materials,

Once the material has been received and cleared

Chapter No. 01: Introduction. Page 7

'issue of goods. It might also happen that after partial use,

Since the material has a cost,. the organization would

Chapter No. 01: Introduction. Page 8

keeping is a vital function of stores. Of course, it also goes

Any Stores as such is a physical entity which deals

Stores and Purchase: