STORE PROCEDURE & STOCK VERIFICATION

R.C. Wasulkar, JWM/OFAJ

Functional diagram : This can be represented as under.

Receipt Stores Stock Issue

Disposal unwanted item

Stores management is a vital part of material management. It acts like a custodian

similar to a cloak room of railways. It forms a main link between material procurement &
inventory controls.

Relation with cost of production :- The cost incurred on stores management is changed
against total variable overheads (VOH). Hence the stores management directly reflects on
the cost of production and influences the financial management of the industry.

Planning :- The following planning is made :

(i) Storage space and godowns.
(ii) Types of items which can be stored.
(iii) Types of items which needs covered accommodation.
(iv) Items needs, special storage arrangements.
(a) Explosive – Magazine based on category of explosive
(b) Inflammable item – Away from moved item
Petrol – underground tank
Diesel – underground tank
Sprit – underground tank
Acid – tank
 Rubber items - Ventilation covered accommodation coated with power
Paper - Humidity control
Textile – Insect’s prevention
Packages of steel – covered accommodation from moisture, sunlight

Layout of railway track and construction of platform

In the present days railway facilities are used in most of the cases for receipt and issue of
bulk of the items. For this purpose, the railway tracks are laid down inside the factory. For
unloading/loading of the wagons suitable no. of platforms are to be provided.

Transportations :- Transport facilities are planned for the following purposes.

(1) Shifting of material from unloading point to respective sections and transportation
of material from issuing sections to loading point.
(2) Transportation of material from godown to user sections.
(3) Collection and dispatch of materials from railway station & road transport
companies.

Weighing Arrangement

It is essential to weigh the incoming & outgoing materials. For this purpose
different weigh bridges and weighing scale’s are provided.

Material handling equipments and accessories.

The following are the objectives.

1. To reduce the cost of handling.
2. To reduce manpower deployed.
3. To maintain good house keeping.

Function :- The following are the main function of store section.

 (1) Receipt branch : - For convenience of field work and office works, it is divided
into receipt office and receipt bond and also siding.
(2) To check quantity, compare with dispatch documents/packing notes and prepared
MI slip.
(3) To put up material for inspection.
(4) To prepare receipt vouchers on clearance of MI slip and inform all concerned for
further action.
(5) To regularize quantitative discrepancies by preparing
- Expense vov. For expenditure in test
- DD vov. For discrepancies in quantity on receipt
- Preparing claims on railways & transport agencies
- DD vov. and loss statement for transits losses.
(6) To return rejected stores to concerned fys./firm.
(7) To release 2 & 5 of the I Notes.
(8) Payment of demurrage & regularization.
(9) Linking up of consignors issue voucher.

Siding :- To arrange unloading of material received in full wagon and deal with matters
connected with railways.

Issue Branch :- The following functions are carried out by issue branch.
To issue materials by full wagon load, full truck load, post parcels after RR/Dispatch
documents against “P” vov or ‘N’ vov.
- To prepare issue vov.
- Liking of issue vov. With ‘O’ vov./I Notes
- Forwarding of issue vov., RRs to consignee immediately after dispatch.
- Allotment of wagon.
- Preparation of military credit notes & convey notes.
- Return of rejected stores to consignor.
- Preparation of gate pass for items issued outside the factory.
- To obtained receipted copy of the issue vov. from the consignee.
- To have correspondence and settle discrepancies.
- To arrange wagons, trucks & other mode of dispatch.
Stock Branch
Stocks are maintained under following categories.
1. Regular stock for which item codes are existing.
2. Deposit stock
3. Stock pile stock which are treated as capital stock.
4. Nominal stock pertaining to items for which there is no Item code, like - stationery
item, item purchased under contingency funds, estate funds etc.
5. Machinery/capital stock.
6. Stock against production work order series.
It carries the following function.
(i) To collect material from receipt bond, platform to respective godown
on receipt of receipt vov. from receipt office.
(ii) To count/weight stock at the prescribed place and enter into the bin
cards.
(iii) Issue against authority of demand notes, nominal demand notes, issue
vov. & post there issue in the bin card.
(iv) Carrying out preservation and care and custody of stores to avoid
deterioration /pilferage in stores.
(v) To rotate materials and maintain principle of first in first out.
(vi) To take action for disposal of slow & non moving item.
(vii) Raising of EO for the items having limited self life for periodical
testing/inspection.
(viii) Stocking of item.
(ix) Departmental & OFBs stock verification.
(x) Investigation and regularization of discrepancies.
(xi) To take material on stock charge against return notes.
(xii) Posting/numbering of documents (D/Note, return notes etc.)

Stock verification

(a) The records of stocks maintained in bin cards are accurate. Each transaction of
receipt or issue with closing balance is posted by the ASK concerned on the Bin
 cards immediately the transaction takes place and these entries are rechecked and
initialed by the Supr. The closing balance are verified and reconciled with the
balance in the ledgers by the accounts officer every year.
(b) Stock taking of all the items is made by OFBs SV group every year starting from
April and finishing before March of next year. Costly and pilferage valuable items
are verified twice a year by the OFBs SV Group. Ten percent of the total items on
stock charge are verified departmentally every year.

Method of stock verification

(i) Counting (ii) Weighment (iii) Assessments

Agencies for stock verification

(i) SV group of OFB.

(ii) Stock branch of stores section
(iii) Surprise check by security

Reports on stock verification and discrepancies found in stock verification are also sent to
the OFB.

Disposal

Disposal is an effective function of material management which mainly serves the

following purposes.
(i) To clean the blocked up capital and obtain as much revenue as possible for
more useful purpose.
(ii) To vacate the storage space occupied by these items, so that same can be
utilized for storage of other items.
 Material disposal is a reverse procedure of material provisioning. In material
provisioning the aim is to regulate the supply to maintain continuity of production. In
disposal the aim is to get rid by unwanted material to maintain continuity of production.

Disposal is contract to sell the unwanted goods through sale release order. It brings
return of money.

Categorization of items for disposal

The items for disposal are normally categorized under the following heads.

(1) Unserviceable item/plant & machinery

(2) Scrap
(3) Waste products