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INTRODUCTION
Inventory management occupies the most significant position in the structure of working
capital, Management of inventory may be defined as the sum of total of those activities necessary for
the acquisition, storage, disposal or use of materials. Inventory is one of the important component of
current assets. Inventory management is an important area of working capital management, which
plays crucial role in economic operation of the firm.
Every enterprise needs inventory for smooth running of its activities. It serves as a link between
production and distribution process. There is, generally, a time lag between the recognition of a need
and its fulfillment. The greater the time lag, the higher requirements for inventory. It also provides a
cushion for future price fluctuations.
In a complex industry like IVRCL Limited it studied clearly of how the thing are being
performed and what is the real impact of these on industry and how effectively the inventory is
utilized is interested to be known by researcher because of its great significance in the research.
Inventory can be referred to as sum of the value of raw materials fuels and lubricants, spare parts,
maintenance consumables, semi processed materials and finished goods, stock at any given point of
time.
In large companies inventory place a most significant part of the current assets. The business has
about 15 to 30% of inventories in total assets.
Inventory is composed of assets that will be sold in feature in the normal course of business
operations. The assets which firms stores as inventory is anticipation of need are raw materials,
work in progress and finished goods.
What is inventory?
- Inventory means stock of materials control means regulate or check
- Inventory (dictionary) meaning is list of stock goods.
- Scientific definition of inventory is idle recourse of any kind having
economic value.
- Inventory is detailed list of moveable goods which gives the quantity and
value of each items or moveable goods with quantity and value.
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- From material management angle inventory is stock to meet future
demands of production, repairs, maintenance and construction.
- Inventory is defined as the sum of the value of (stock at any point of time)
a) Spare parts
b) Fuels & Lubricants
c) Consumables & Tools
f) Raw materials
g) Work in progress Inventory
- Inventory control basically deals with –
a) When would an order be placed (order level)
b) How much should be ordered (order quantity)
c) When to order
d) How much to keep in stock without effecting consumption
What is need of Inventory?
To improve inventory management techniques it is necessary to maintain inventory with minimum
investment (Blockage) but consistent with adequate service level.
Why control Inventory?
Materials account for 50% of the cash outflow of most organizations.
Inventories are the single largest asset in balance sheet in many companies.
The finance manager considers inventory as locked-up but the users always claims for more
capital, complaining of stock out.
Inventory has to be controlled in order to optimize the cost of acquiring the items.
An important factor to be considered in controlling the inventories is to reduce the lead-time
concept.
Application of scientific techniques in inventory control increases the morale of young
executives.
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TYPES OF INVENTORY
1. AUTO INDENTING/STORES/ROL/ROQ ITEMS
This activity decides when inventory replacement is required and calculates inventory replacement
quantities. This category of
a) Regular consumption items
b) Fast moving items
c) Huge consumption annual movement items
d) Multi-user department items
e) Generally low value and low lead time items
2. SURPLUS INVENTORY
Items which do not have immediate use, but they have a usage in future. These items are in excess
of the unit’s storage norms and are not likely to be used within a reasonable period.
3 ZERO VALUE/CHARGED OUT ITEMS
Zero value items are items which have been returned by the user department or charged with new
equipment to stores. These items are reusable. The value was booked against first consumption.
Hence returned goods to stores do not carry any value. However, only the quantity should be
included in the stores ledger.
These items should be separately stored. The charge of the same should be considered only for
PARTA/Budgeting/MIS purpose.
- What is mean by Inventory Control?
Systematic procurement, location, storage and recording in such a way that desired degree of
services to operating shops at minimum ultimate cost.
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- What is mean by large inventory?
a) Tie-up large amount
b) Deterioration
c) Damaged
d) Obsolesce
e) Increased overhead
When to control the inventory?
-
Positive approach is to control the inventory from beginning stage (procurement stage or PR stage).
- Inventory is harder to move with longer it sits
- Increase in 20% sale = Reduction in 5% inventory so our aim should be to
reduce the
- inventory.
- Inventory accounts are a) price (required negotiation) b) Service Level (% of
demand
fulfilling) c) Lead time (time required from feeling need to availability).
WHY ORGANIZATION CARRIES INVENTORY
Business constraints : Government regulations, monopoly of supplier minimum quantity to accept,
material availability in seasonal only. Transportation cost, once good will.
Buying in large quantities : Most of firms offer quantity discount of buying in large
Quantities.
Accuracy : Accuracy timeliness is critical factors, material control
activities, include determining needs.
Hedge against long : Organization carry inventory to protect against possible loss of
or uncertain lead time production against long and uncertain
lead time.
Safe guard against : If material is scarce-move stock is kept.
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OBJECTIVES OF THE PROJECT
TO GET A PRACTICAL INDUSTRIAL EXPOSURE
THE TASK IS TO ANALYZE THE STORES MANAGEMENT OF IVRCL LTD. &
TRACE OUT THE DRAWBACK OF THE CURRENT SYSTEM & GENERATING AN
IDEA TO TOUCH HIGHER LEVEL OF COMPETENCY IN CONTROLLING THE
INVENTORY.
TO ANALYZE THE CURRENT ERP SYSTEM IN MANAGING THE INVENTORY
TO ANALYZE THE MAJOR TO MINIMIZE THE INVENTORIES AND KEEP
SURPLUS & OBSOLETE ITEMS TO MINIMUM KSLIS.
TO ANALYZE THE INDUSTRIAL SUFFICIENCY IN MANAGING THE INVENTORY.
TO ANALYZE THE MATERIAL REQUIREMENT PLANNING PROCEDURE.
TO ANALYZE THE CURRENT PROCEDURE OF VENDOR DEVELOPMENT &
RATING
TO ANALYZE THE LATEST MATERIAL HANDLING SYSTEM AND METHODS
TO ANALYZE THE QUALITY & QUINTITY OF MATERIALS IMPLEMENTATION
TO IMPLEMENTATION OF INVENTORY PACKAGE
TO WELL TRAIN ELECTRONIC SYSTEM HADLING
TO KNOWN THE COMMUNICATION AND MIS (MANAGEMENT INFORMATION
SYSTEM).
METHODOLOGY OF THE STUDY:
The study is based on both primary and secondary data.
The primary data has been collected through study of reflecting inventory management
practices of IVRCL LTD. The collected data is tabulated and suitable interpretation had been made
by considering the data collection through secondary data like annual reports purchase registers,
storage records of the organization.
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LIMITATIONS OF THE STUDY:
The study has the following limitations:
1. The limitations of ratio analysis can be applicable of the study.
2. There may be approximation in calculating ratios and taking the figures from the annual
reports.
Company Profile:
Name of the Company : IVRCL LIMITED
Established Year : 1987
Address of Head Office : “MIHIR”, 8-2-350/5/A/24/1B,
Road No.2, Banjara Hills,
Hyderabad -500034
Andhra Pradesh.
Address of Regd. Office : M-22/3RT, Vijayanagar Colony,
Hyderabad – 500057
Andhra Pradesh
Address of KSLIS site Office : IVRCL LTD.,
Koilsagar Project,
Nr.Rice Mill, Raichur Road,
Dhanvada Mandal,
Marikal – 509351
Mahabubnagar (Dist.).
Contact No.’s :
Site Office: 08506-288667
Web Sites : www.ivrcl.com
Site Mail Id’s : [email protected]
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Major Divisions in IVRCL LTD. : Power Division, Water Division,
Irrigation Division, Buildings,
Electrical, Roads & Industrial plant
Projects.
KSLIS Project Value : 360.18 Crores
In charge Of the Project site : Mr. M .Mohan reddy (Sr.AGM)
HOD of Stores : Mr. MLN Babu (Stores/Accounts
In-Charge
Types of Materials under main stores : 1) BHEL Pumps Materials, Cement,
Steel, Aggregate & Sand etc
2) Spares of Mechanical Items
3) Consumable items.
IVRCL LIMITED COMPANY:
In Words of Mr. E.Sudhir Reddy, Chairman & Managing Director:
Way back in 1987 when we formed IVRCL, the infrastructure industry in India was
in its infancy. We were clear in our minds then, that we did not intend to build just another
infrastructure company. We wanted to be different. The ‘also ran’ tag was certainly not for us.
Looking back, I can say, at the risk of sounding immodest, that we not only dreamed big, our
dream has always been different.
Confident of our competitive advantage, strong project management skills, excellent pre-
qualification credentials, integrated execution capabilities and high-quality human resources,
we will continue to lead the way. But more than business success and growth, what we truly
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welcome is the opportunity to improve the human condition. We continue to measure success
not by the figures we reach, but by the lives we touch.
As India boldly moves forward to chart out its economic destiny, IVRCL is committed to be
being a partner in progress. As always arousing hope and confidence by blazing new trails and
living up to our promise that WE MAKE IT HAPPEN!
Project details of Koilsagar Lift Irrigation Scheme under Construction by
IVRCL ltd., Company
The KSLIS Project in its entirety envisages lifting of water from the fore shore of Jurala
Project to a total Height of 120M(viz) 58M in first stage and 62M in second stage and installation
of 4 Nos. of 7.5 MW heavy duty pumps and motors. In the Process of completing the scheme works
the magnitude of work involved is as detailed below.
Name of Canal Stage-1 Stage-2 Total area involved
Main Canal length
Tunnel Length
Delivery Pipe line
Distributory Net Work
Pumps & Motors
Ayacut benefited
21.280Kms
7.949 Kms
220 RMT
----
2 Nos of 7.5MW
(Francis Turbine)
----
19.105 Kms
4.152 Kms
225 RMT
---
2 Nos of 7.5MW
(Francis Turbine)
----
40.385Kms
12.101 Kms
445 RMT
182.450 Kms
4 Nos of 7.5MW
(Francis Turbine)
50,250 Acres
In Koilsagar lift irrigation Project constructed to irrigate an ayacut of 12000Acres, in
Mahaboonagar (dist.) Andhra Pradesh, ayacut has not fully developed. It is now proposed to lift
water from fore shore of Jurala project in two stages to a total lift of 120m with 4 Nos. of Pumps of
10,000HP reach and to fill up the Koilsagar Project to stabilize the ayacut of 1200 Acres including
a gap ayacut of 7500 Acres and to irrigate an additional 38250 Acres bringing the total to 50,520
Acres under the project at a quoted valve of Rs 360.20 Crores.
In this process operation such as detailed investigation two tunnels of total length of 10.16
Kms, two pump houses, two surge pools, excavation of approach and gravity canal, CM & CD
works, fixing of pressure mains and excavation of net work of distributory system is required to
be done under the contracts.
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This Project work is in progress under the Company IVRCL Ltd.
Flow Diagram of KSLIS Project Phase – I & II
Fig No. 6
Details of KSLIS-1(Phase-1) Project:
1) Approach Canal Length – 6.100Kms.
2) Pump House-1 Static Head – 59m.
3) Pump House Motors Cap 7.5 MW
4) Gravity Canal Length – 15.180Kms.
5) Tunnel length - 6.907 Kms. With 4.0m Dia.
6) Shape of Tunnel “D-Shape”
7) Delivery Pipe line – 0.220Kms.
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Details of KSLIS-2(Phase-2) Project:
1) Approach Canal length – 4.925Kms.
2) Pump House 2 Static Head – 60m.
3) Pump House Motors Cap 7.5MW
4) Gravity Canal Length – 14.100Kms.
5) Tunnel Length – 3.400Kms with 4.0m Dia.
6) Shape Of Tunnel “O-Shape”.
7) Delivery Pipe line – 0.320Kms. with two Rows
8) Left Canal Length – 28.3Kms.
9) Link Canal Length – 13.35Kms.
10) Right Canal Length – 30.300Kms.
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REVIEW OF LITERATURE
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MATERIAL MANAGEMENT
Definition: We can define materials management as the function responsible for the coordination
of planning, sourcing, purchasing, moving, storing and controlling materials in an optimum manner
so as to maintain possible economy in the project.
OBJECTIVE OF MATERIAL MANAGEMENT :
Primary Objective of materials management
2. Low Prices- to be lowest – includes transportation: enhances profit
3. Low cost acquisition and possession- reduced handling and storage costs.
4. Continuity of supply – alternative, captive suppliers, flexible suppliers
5. Low payroll costs- Low operation costs of stores personnel
6. Favorable supplier relations- supplier development.
Secondary Objective of materials management
1 .Economic make-buy-Coordinating and assisting other departments in Make-Buy
Decisions.
2 Interdepartmental Harmony- Success of materials management department depends on
the success of other departments. Hence relations are to be harmonious.
Materials Management Functions
1) Material Planning and programming : The Planning and controlling function are inventory
management, production planning and scheduling.
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2) Purchasing And Outsourcing : This includes selection of source of supply, finalization of
terms of purchase, placement of purchase orders, follow-up, Maintenance of smooth relation
with suppliers, timely arrangement of payment to suppliers, evaluating and rating suppliers.
3) Stores & Warehousing : This Involves physical control of materials, preservation of stores,
minimization of obsolescence and damage through timely disposal and efficient handling,
maintenance of store records, proper location and stocking.
4) Codification: It is a process of representing each item by a number, the digit of which
indicates the group, the type and the dimension of the item.
5) Inspection & Quality Control: Inspection involves critical appraisal involving examination,
measurement, testing, gauging and comparison of materials with relevant standards and make
to suit our requirement.
6) Cost reduction through value analysis : Organized cost reduction analysis by which
accountants analyze costs in products or procedure, the ranking of their elements in a
descending order of magnitude and in informed challenge to each, starting with the most
important.
7) Disposal of surplus/ obsolete material: It means final placement or riddance of wastes,
excess, scrap etc., under proper process and authority with no intention to retrieve. Disposal
may be accomplished by abandonment, destruction, internment, incineration, donation, sale,
etc.
8) Distribution: Distribution means movement of goods and services from the source through
the distribution channel, right up to the final user.
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INVENTORY CONTROL
A) To minimize idle time caused by shortage of inventory and non-availability of
inventories as per requirement.
B) To keep down capital investment in inventories, inventory carrying cost and
obsolescence losses.
C) Physical verification of inventory items.
CAUSES OF HIGH INVENTORIES AT KSLISP
A) Variety of equipments
B) Project surplus
C) High lead time/sources of supply are to for flung
D) Modification/improvement in design system
E) Obsolescence of machinery
F) Rate inflections (increased)
ABC Analysis is best tool to control the inventory which means –
- Avoid, Bluff, Confusion
- Always, Better, Control
If inventory is not controlled properly:-
- It is an idle resource
- It can wipe out due profit
- If effects quality (stock makes work careless handing)
- It is not buffer (thing to exchange)
- It is not an asset (properly to pay claim)
- It never optimized (wish or desired)
- It not only occupies space but also the mind
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- It will not start earring
- It gathers dust
- Move inventory carrying cost is spend on it
SELECTIVE CONTROL
WHY SELECTIVE CONTROL?
Literally thousands of items are kept in inventory by various organization. Periodic
reviews of inventories of these items have to be under taken for effective inventory
control. The under-lying idea of such reviews is to keep stocks at a low but at the
same time keep the service percentage high. The problem is how to review such a
large number of items. Is it necessary to have the same type of control for each and
every item? An equally critical analysis of all items is very expensive and time
consuming. Selective control of items with references to particular function under
examination is the solution. Items should, therefore, be classified so that the more
important amongst them receive greater attention.
CLASSIFICATION METHODS
Various methods of classification are adopted as shown below:-
Sl.No. Title Function
1.
2.
3.
4.
5.
ABC
XYZ
HML (High, Medium, Low)
VED (Vital, Essential, Desirable)
FSN (Fast moving, Slow moving,
Non-moving)
Annual usage value of items
Inventory holdings of items
Unit prices of items
Criticality of items- Particularly
Components and spares
Consumption pattern of the items
Problems in procurement
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6.
7.
8.
9.
SDE ( Scare, Difficult, Easy to
produce)
SOS (seasonal, off seasonal)
GOLF (Government, Ordinary,
local, Foreign
Age Analysis
Availability – whether in
particular season or in all seasons.
Sources of availability
Shelf life of items
SELECTIVE INVENTORY CONTROL SYSTEM
Selective inventory control system means that we have various different methods of
inventory control from item to item and this differentiation should be on selective
basis. The importance of materials can be due to its cost, its criticality, its availability
and its consumption. There are a number of methods available for selective control of
a inventory. Selective control can be into eight types:
ABC Classification:
ABC Stands for always better control or avoid bluff confuse. This method is
based on annual consumption value, which is obtained by the multiplication of the
unit price by the annual consumption quantity. For example, on an adhoc basis, the
items accounting for an annual consumption value of more than Rs. (one) Lacs may
be classified as ‘A’ category and below Rs. 10000 may be the ‘c’ category and in
between these items will be the ‘B’ category.
‘A’ Items: are the top 10% of the items and accounts for 60% of the consumption
value.
‘B’ Items: are the next 30% of the items and accounts for 30% of the consumption
value.
‘C’ items: are the next 60% the items and accounts for only 10% of the consumption
value.
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H.M.L CLASSIFICATION
H.M.L stands for:
H- High cost items (all unit cost)
M- Medium cost items (all unit cost)
L- Low cist items (all unit cost)
Unit value is the criteria in HML classification.
V.E.D CLASSIFICATION:
VED stand for
V- Vital
E- Essential
D- Desirable
S.D.E CLASSFICATION:
‘S’ scare items –which are not easily available in the market
‘D’ Difficult items-which are non available in the market
‘E’ Easy items- which are easily available in local market.
G.O.L.F CLASSIFICATION
G.O.L.F stands for
Government – open market – local market- foreign sources.
Materials are classified according to nature of suppliers.
F.S.N CLASSIFICATION
F-S-N stands for
‘F’ Fast moving items having consumption at least once in a year.
‘S’ slow moving consumption in alternative year.
‘N’ Non-moving consumption in least 5-6 years.
X.Y.Z CLASSIFICATION:
X Item is those items whose value is high while Z items are those items whose values
are low. Understandably Y items fall in between two categories.
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S.O.S CLASSIFICATION
Some of items required are seasonal in nature and require special purchasing
and stocking strategies. Many commodities especially of agricultural origin and
seasonal in character have to be purchased at the best time. Operation research
techniques would have to be used to obtain optimum results. The inventory system
will have to balance between holding costs and lower prices at which it will be
available.
IMROVEMENT IN INVENTORY TURN OVER RATIO PROJECT
AN INTRODUCTION TO INVENTORY TURNS OVER RATIO:
Inventory turn over ratio is defined as the ratio of annual consumption value divided by average
inventory holdings. This ratio is also called efficiency indicator. Hence, higher the inventory turn
over ratio the better is financial out look and system is considered more efficient. There is
considerable scope for improvement in the sphere.
Inventory turn over ratio= Annul issues in Rupees. /Average inventory in Rs.
Express as percentage the ratio is to multiplied by hundred.
This ratio is called efficiency indicator
Case 1
Suppose an organization requires material worth Rs. 12 crores annually.
If purchased in 1 Lot and consumption is 1 crores per month.
Average inventory holding will be = 6.5 crores
Inventory turn over ratio will be 2 approximate.
Case 2
Suppose an organization requires material worth Rs. 10 crores annually.
If purchased in 2 Lots and consumption is 1 crores per month.
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Average inventory holding will be = 2.5crores
Inventory turn over will be 4 approximate
In second case capital locked up has reduced from 5 to 2.5crores and inventory turn over ratio
increased to 4 from 2.
It shows in second case released capital becomes available and organization has
a) Borrow less capital.
b) Less interest charges
c) Fewer inventories carrying cost
Hence, higher the ITOR the better is financial out look and system is more
efficient.
How to improve inventory turn over ratio.
A. Efficient reduction of inventories.
B. Discourage flabby inventory due to poor maintenance.
C. Discourage Profit-making inventory held with speculative.
D. Reduction in critical & non-critical items lying in stock since long
period.
E. Identification of obsolete/ surplus items and their disposal/utilization.
ITOR in most of industries in India is around = 2
Most efficient one in India is around =3
ITOR in abroad-developed countries is between 6 to 8.
Our target for FY, 2006-07 is => 4
\
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PURCHASE MANAGEMENT
The Purchase is a main activity in the area of Materials Management. It is the most important
function in any organization this is the place where money is spent out of the Organization .it
decides the profitability of the company. It is studied that one percent saved in the purchase
function improves the profit of the company as mach as 2 to 3 percent.
PRINCIPLES OF PURCHASE
Principles of Purchasing can be called by “7Rs”. They are as follows:
1) Buying the materials at right price.
2) Buying materials of right quality.
3) In the right quantity.
4) At the right time.
5) From the right source.
6) At the right place.
7) With right mode of transport.
PURCHASE SYSTEMS:
We can classify the systems in the following manner:
1. Pre-Purchase system;
2. Ordering system;
3. Post-Purchase system.
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RIGHT PLACE OF
DELIVERY Price communication
RIGHT MATERIALValue analysisStandardization
RIGHT QUALITYRejections and specifications
RIGHT SOURCEVendors rating
Purchase research
RIGHT CONTRACTSLegal aspects
RIGHT TRANSPORTATION
Cost analysis of transportation and
logistics
RIGHT ATTITUDETraining SWOT analysis Material
Intelligence
RIGHT QUANTITYEOQ and Inventory
models
RIGHT PRICENegotiation learning
curve
RIGHT TIMERe-order point Lead
time analysis
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A diagram indicating these in below
EXHIBIT 1.1
PURCHASE PARAMETERS
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ENTERPRISE RESOURCE PLANNING
ERP stands for enterprise resource planning. It is a software solution that helps
companies to gain competitive edge by in integrating all business process and optimizing the
resource available.
The traditional application system treats each transaction separately. It is built around
strong boundaries of specific function that they are meant to cater to. ERP stops treating
these transaction separately as stand alone activities and consider them to be part of inter
linked processes that make the business. An ERP system stores data generated as a result of
diverse transaction that are confined to any departmental or functional boundaries, but are
rather integrated to be used by multiple user, for multiple purpose and at multiple places.
ERP should not be mistaken as a magic tool that can transform anything overnight. Its
successful implementation is a long journey towards enterprise excellence. To support such a
diverse system, companies need sophisticates information technology infrastructure and other
important enabling tools like workflow, workgroup, Groupware, internet, intranet, Data ware
housing etc, these entire components together from ERP backbone.
ERP SYSTEM IN IVRCL LIMITED
Today business is become an ever-changing phenomenon due to Large-scale
production facilities, new product development, technology up gradation, sales strategy,
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capacity utilization, capacity expansion changing business scenarios, mergers & acquisitions
and opening of economics. These increasing business complexities warrant fast response,
which in turn requires data. The organization needs to proactive and plan ahead of time. To
do business optimization, IVRCL on hand requires tools such as extended ERP including and
Visual Fox Pro application, and on the other hand, needs to change itself to a learning
organization focusing on its people, skills core competency culture and practices.
INVENTORY & ACCOUNTS PAKAGES IN IVRCL LTD:
In IVRCL LTD., Company follows the Inventory and Accounts Packages like SAP
model. It is totally design on Visual Fox Pro software.
In this package inventory have so many options which are related to materials transaction.
1. Masters
2. Transactions
3. Reports
4. Accounts Approval
5. Physical Verification
6. Utility
7. System Controls
8. Change F.Y (Finance Year)
9. Log off
10. Exit
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In this each have different fields.
Masters: In Masters Options we have Unit of Materials like Nos., Kgs, MT, Pkt,
Roll, Lots, Bags, Ltrs, Cum, Cufts & Mtrs. Here one can select the materials unit as
per the type of description of material. In Masters Option Materials are classified into
two types one is Consumable & other is Assets. In IVRCL Company materials are
taken in digits system like consumables taken by 1 series and assets are 2 series. For
consumables they divide the materials as :
1. Material Main Group (1001) 4 digits
2. Material Sub group (001) 3 digits
3. Material Sub-Sub Group (00001) 5 digits.
Total 12 digits for each material. Similarly Assets also same as start with ‘2’ digit.
Transaction: In transaction first prepare the purchase order and then we have inward
option thereafter we raise the MRN (Material Receipt Note) against the PO then
give MRN approval.
Once MRN is approved in package these materials directly enters into stock statement and
then only we raise issue note of that material. In this package materials are issued in FIFO
(First In First Out) method.
Debit notes also issued through issue note by mentioning debt rate as per the Sub contractor
Work in the cases where the sub-contractor rates are inclusive of cost of material.
Aggregate materials are also similarly to common materials but here we have to enter Trip
sheet vehicle wise. Apart from aggregate, Sand, Metal & Boulders are also to be booked
in this option only.
Reports:
In this option we can see view of all transaction like:
1. Purchase Details,
2. MRN Details,
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3. Supplier wise Material receipt,
4. Issue note details,
5. Debt note details and
6. Closing stock statement.
Accounts Approval:
After completing all entries, accounts approval is given to the entries. After this approval, the
Store inventory’s details will be posted into Accounts package.
Physical Verification:
Here we will observe details of closing stock details. The physical verification has to be done
periodically to arrive at the correctness of inventory
Utility: This option is for Package control.
System Control: This option is for user permission settings.
Change F.Y: Here we use this option for viewing cumulative/previous financial year’s
details.
Log Off: This is to Log off of present running year.
Exit: Come out from package (Close)
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FINANCIAL ANALYSIS (INVENTORY )
Introduction:
Inventories are viewed by most of the business world as a large potential role and
not as a measure of wealth as was prevalent in old days. The inventory stocked in excess of
demand may lead to blockage of funds for a longer duration until the excess stock is consumed.
There is a constant fear in the minds of business because of uncertainty in the market situations,
whether to stock or not to stock, rather monitor the market, optimization of resource through
proper inventory control becomes one of the major challenges for the material manager in every
organization. Widening gap between theory and the practice has become remarkable phenomena
in the age of science and technology. When the frontiers of knowledge are widening and the
theory is developing at fast rate, the practice is lagging far behind. This is probably true about all
branches of knowledge and especially true for inventory management area. The material function
in Construction field has a direct importance as every area related to field. Inventories play
essential and pervasive role in the construction field.
INVENTORY ANALYSIS
Problems studied
In the study, efforts have been made to conduct a details analysis of inventory management
functions in the IVRCL LTD. KSLIS Project-II.
For this purpose detailed research has been conducted as under:
1. The Package system in which was in design in Visual FoxPro was studied in detailed.
2. Existing purchase system of the Board was observed. In which organization structure
of procurement department, purchase policies, records relating to purchases were
analyzed.
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3. Detail organization structure of stores of Controller of stores department, were
studied. Inventories held in the stores, their receiving, issuing procedures, techniques
of stores control adopted by the board were analyzed.
4. Treatment given to wastages, spoilage and dead inventory by the stores were taken.
5. Existing system of inventory control adopted by the board was studied.
6. New inventory control technique applied to improve the efficiency of material
management department and to reduce cost of inventory.
Research Methodology
The relevant data and information have been collected from primary as well as from
secondary sources. For collection of information software, pertaining to raw-material
management general and purchase control as well as stores control. Level employees of the
materials management services, IT, Central stores (Receipt & Issue), Human Resource
Development, Finance & Accounts department of KSLIS-II. Direct interviews were also from
the concerned department, of the board. This helped together actual prevailing conditions of
purchasing, maintaining and controlling of materials/components. Moreover the site was also
visited many times to study the inventory management systems in KSLIS –II (Koilsagar lift
Irrigation scheme stage-II).
PARTA SYSTEM
INTRODUCTION
INSURANCE PARTA SYSTEM was introduced by IVRCL LIMITED Company. It is
setting targets for revenues and expenditures and comparison of actual against set standards. It is
generally prepared for one financial year, but when there is any substantial hike in prices of raw
materials and other expenses, It can be revised accordingly. Monthly variances in the expenses
and the revenues are disclosed in the monthly MIS (Management Information System) report
and measures are taken accordingly.
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PREPRATION OF PARTA
CAPACITY (Concrete/Metals from batching plant & from Crusher)
For preparing a PARTA, first of all target is to be set of for batching plant as to the quantity
of concrete is produced by the plant. Presently KSLIS Project is having 2 concrete Batching
plants and one stone crusher and their capacities are taken more than their rated capacity in
PARTA.
Major Consumables Items:
CEMENT:
Cement is basic raw material for producing concrete. In this project mainly 43 grade
Ordinary Portland cement is exclusively used. This grade of cement is being used as per the
relevant provisions of contract agreement due to its fast setting time of concrete.
OILS:
Here Major Consumption of oil is HSD (High speed Diesel) and is being procured in bulk
quantities for various types of machinery, heavy/light vehicles, DG Sets, Compressors etc. This
item is classified as “A” Class item along with other major materials viz; Cement, reinforcement
Steel, structural steel, aggregates, sand, dust and boulders.
STEEL:
This is one of the major materials for this field which is used in concreting works of various
locations such as; Pump house, Building, Bridges, tunnels lining & main structures in Project.
The definition of RCC i.e. reinforced cement concrete means containing of reinforcement steel
in all concreting works.
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AGGREGATES:
The another major component of concrete works is crushed aggregates which is also termed as
“Metal”. Normally two sizes i.e. 20 mm & 12 mm metal is being used in RCC works as per
specifications laid down in the relevant standards.
MOTORS & PUMPS:
A number of electrical and diesel driven water pumps are purchased for this project to
effectively drain out the accumulated water in various locations of canals due to seepage or rains
etc and the capacity of such pumps are ranging from 1.00 HP to 50 HP of different makes. To
maintain the pumps in running condition all the time, several spare parts are being procured from
time to time. This is one of the important item for execution of canal works.
STORES & SPARES
PARTA for stores spares consumption and operation are fixed for normal as well as shut down.
Store consumption is calculated by concerned engineers comparing the previous year
consumption & looking into the life span of spares. Continuous efforts are made to reduce the
consumption of store & spares through residual life studies & by improving life period of stores
& spares.
SALARY / WAGES & FRINGE BENEFITS
For controlling manpower expenditure time to time manpower studies are conducted through
engineers and concerned officials. Salary & Wages PARTA is based on MANPOWER &
AVERAGE SALARY. In the wages entire benefits such as PF (PROVIDENT FUND , BONUS
& MEDICAL ALLOWENCES etc., which forms about 42-45% of total wages in evaluated
in PARTA.
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MERITS OF PARTA SYSTEM
It is the main tool for planning and budgeting.
It helps the management in monitoring the day-today affairs of the company
It is a tool for motivation to employees for achieving the targets.
It helps in assessing the overall performance of the unit.
It helps in financial working i.e. alluring any expenditure or curtailing any expenditure
or taking any new project etc.
It helps in monitoring the cost, as targets are well defined therefore the project as well
as staff try to improve their efficiencies.
It helps in reducing the variances.
It helps in taking decision regarding payment of advance taxes etc.
Since KSLISP is under Captive of IVRCL LTD., this PARTA system helps in planning
the PARTA for its parent unit i.e. IVRCL LIMITED Company.
DEMERITS OF PARTA
None
LIMITATION OF PARTA
It is very difficult to anticipate the execution activities in advance.
It has a bearing of certain government and legal regulation so it is very difficult to
precisely project any price etc.
SUGGESTION
Use of Zero base budgeting method.
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SUPPLY CHAIN MANAGEMENT AT KSLIS PROJECT
PRELIMINARY PURCHASE REQUISITION
Experience has proved that no inventory control mechanism can be effective and
fruitful unless material procurement is controlled and regulated at the very
procurement plan stage itself.
At KSLIS project, planning & maintenance department prepares the preliminary purchase
requisition in the proposal from (rough/hand written) and send it for review to the inventory
control cell. This purchase requisition motions the type of spares or consumables and its
criticality in terms of purposed to be procured.
The inventory control cell first determines the PR value on the basis of last procurement rate
or quotation and assigns system material code. It also supplements information in respect of:
Stock in stores
Pending PR quantity with expected delivery
Consumption pattern for past 2-3 months, and
Delivery schedule, suitability, considering consumption plan
The planning engineer associated with the inventory control cell ascertains availability of
material or its equivalent with other departments and gets same spares for use. He also
explores possibility of using alternative material which may available in stock or purchase
value of which would be comparatively lower.
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MANAGEMENT INFORMATION SYSTEM
Inventory control cell prepares following monthly MIS report:
o Comparative stock statement under-critical, non-critical items and
identifies increase/reduction vis-à-vis previous month’s consumption.
o Statement on specific items with details, which contributed to increase in
the inventory in the particular month along with further consumption
plan.
o The above report is discussed amongst the HOD’s during MRP (monthly
performance review meeting). These are discussed with the Project-in-
Charge during review meetings.
Inventory control cell also prepare following quarterly report
Stock summary statement
Physical verification of Major & consumable items (ABC Analysis)
Vehicle Performance Report
Age analysis of spares & other material.
PERIODIC (ANNUAL) REVIEW FOR REGULAR ITEMS
In case of high & regularly used items, data is collected about their consumption in previous
months, and compared to the quantities projected by the user department. The entire
requirement for is consolidated and after deliberation, the composite quantity with phased
deliveries is communicated to the purchase department for placement of monthly, quarterly,
annual/bi-annual orders. Items covered under the above exercise include:
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Cement of required grades
Reinforcement Steel of various dias (8mm, 10mm, 12mm, 16mm, 20mm & 25mm)
Various sizes of Aggregates, Sand, Bricks, Dust and Boulders etc
HS diesel, oils requirement for maintenance for vehicles, machinery etc
Structural steel such as ; Ms plates, Ms sheets, Ms Pipes & Scaffolding materials
which are required for staging/scaffolding for construction of buildings & brides etc
All spares & consumable items.
Based on the ABC analysis, consumable regular items are reviewed and their ROL/ROQ
is revised annually. In certain cases if there is a departure from the norms/practices,
ROL/ROQ are reviewed and revised midterm ROL/ROQ formulated for auto-identified
by the stores department, cover the following major consumable groups:
Cement capsules
Valves, curing pipes
Wooden Runners
Bolts & Nuts
Electrical Materials
Welding electrodes
Oils & Gases & ect.
FUNCTION FEATURES OF MATERIALS MANAGEMENT AT KSLIS PROJECT:
PURCHASE DEPARTMENT
The method of purchase can be subdivided into four methods:
Comparative bids
Annual rate contract
Proprietary items
Repeat orders
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The Purchase department work involves:
Making purchases
Vendor development & Rating
Product development
Marketing development
PROCEDURE OF VENDOR DEVELOMENT:
Discussion with original manufactures
Enquiry floatation
Negotiation & Order placement
Sample analysis & approval
Review & registration.
By information / Application from Manufactures & Vendor for enlistment
Security of information
Identifying or areas of vendors development
Scrutinizing the reference
Selected vendors send vendor assessment form
Vendor evolution
Enquiry floatation
Review & registration
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STORES MANAGEMENT
Stores play a vital role in the operation of the company. It is direct touch with the user
department in its day-to-day activities. The most important purpose served by the stores is to
provide uninterrupted service to the executing agencies. Further, stores are often equated directly
with money, as money is locked up on the stores. The functions of stores can be classified as
follows:
1. To receive raw materials, components, tools, equipments and other items and accounts
for them.
2. To provide adequate and proper storage and preservation to the various items
3. To meet the demands of the consuming departments by proper issues and accounting
for the consumption.
4. To minimize obsolescence, surplus and scrap through proper codification, preservation
and handling.
5. To highlight stock accumulation, discrepancies and abnormal
Consumption and effect control measures.
6. To ensure good housekeeping so that material handling materials
Preservation, stocking, receipt and issue can be done adequately.
7. To assist in verification and provide supporting information for
Effective purchase action.
In India, owing to stiff supply positions, 4 to 6 months inventories are not uncommon and, in
fact, for certain imported items, it could be as high as 24 months’ stock. In this context, stores
management assumes greater importance.
COST ASPECTS AND PRODUCTIVITY
Costs involved in stores can be analyzed under two heads, Viz; fixed and variable. Fixed costs
are to be incurred irrespective of the utilization of the space of the stores. They include money
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spent on land and buildings, interest on rent, repairs, maintenance; insurance, etc. Variable costs
vary with the volume of throughput. They consist of handling costs, damages, deterioration
obsolescence, etc. Obviously, when the throughput or the volume of goods handled is high, the
total cost per unit comes low. This should be the aim of the stores manager in order to optimize
the costs in stores.
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DATA ANALYSIS AND
INTERPRETATION
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IMS OPERATIONAL MANUAL
STORES DEPARTMENT
Stores Department in IVRCL LIMITED
OVERVIEW
IVRCL Infrastructures & Projects Ltd., a Hyderabad based company, is one of the fastest
growing constructions company in the country. It is a Engineering , procurement, constructions
and maintenance company, executing infrastructures projects and operating in five domains, that
is, water & environment, irrigations, power, buildings & industrial structures and transportation
and executing the projects in all most all states of India and even abroad in other countries i.e.
Srilanka, Dubai, Kenya & Nepal etc.
The materials form about 60% of the cost of any project. Hence materials functions are an
important one in executing projects timely and more economically. The important activities and
functions of the STORES DEPT are covered in the subsequent chapters.
The stores department, which is based at project site, is part of the administration function to
serve the project department for timely execution of the project.
The stores department initiates purchase requisitions for locally available materials, to maintain
the user specified minimum stock levels / reorder levels. The stores department also indents
materials, as per approval note of project manager.
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The stores department also performs storage and issue of all types of materials which are
required for the execution of the project. The storage areas for maintaining stocks of various
materials are separately earmarked, depending on the type of materials stored. Manual as well as
mechanical means are employed for smooth movement of materials.
An inventory package system has been implemented for overall process for the stores
department.
ACTIVITIES OF STORES DEPARTMENT
Planning of materials
Receipt of materials
Inspection of materials
Handling and storage of approved materials
Return / Replacement of rejected materials
Issue of materials
Transfer of surplus stores to other sites where there is a requirement
Disposal of obsolete items and non-moving scrap.
Reconciliation of major materials
MIS Reports (Management information System)
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Quality objectivities of materials:
To achieve optimum inventory by proper planning and control, initiating actions to make
materials available i.e. RIGHT QUANTITY IN THE RIGHT PRICE AT RIGHT PLACE AT
RIGHT TIME IN RIGHT QUALITY AND FROM RIGHT VENDOR. Also initiates action for
proper storage and issue of materials to meet the requirement of project site for uninterrupted
construction activities.
The main objectives and their measurements of Stores are given below:
S.N
o.
Key Result
Area (KRA)Objectives Defined Target
Measurement
Frequency
Record /
Reference
01Optimum
Inventory
Control inventory
turnover ratio (Annual
Consumption/Average
Inventory)
>10 Every quarter Data Sheet
02
Preparation of
Material
Receipt Notes
Control time taken for
preparation of MRNs
Max. within 3
days from the
date of receipt
of material
Every month Data Sheet
03Inventory
Reconciliation
Control difference in
Book stocks vis-à-vis
Actual stock
Fixed Assets –
Nil
A Category
<1%
B Category
<3%
C Category
<5%
Every quarter
Every month
Every quarter
Annually
Data Sheet
04 Loss of
Material
Storage loss not to
exceed
5% of average
value of
Six months Data Sheet
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inventory
05 TrainingNo. of training sessions
in a yearNot less than 2 Annually Data Sheet
06 Safety
Maintain good store
keeping and material
handling methods in
order to control accidents
Zero Every month
Incident /
Accident
Report
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Responsibilities & Authorities of personnel
I. HEAD & SUB-HEAD – STORES: Corporate & Division Office
RESPONSIBILITIES:
1) To look after overall control of all site stores for better planning, storage, issue of
materials, monitoring and maintaining records and reporting to HOD, (Accounts), Head
office.
2) To maintain optimum level of Inventories i.e. to minimize Inventory carrying costs.
3) Reconciliation of major materials i.e. Quantity of materials issued, quantity used
(theoretical) and balance quantity lying at the contractor area.
4) To initiate action for minimization of wastes and to reduce obsolescence, dispose off non-
moving scraps and obsolete items.
5) To facilitate better utilization of surplus stores of one site by effecting stock transfer to
other site where there is a requirement.
6) To ensure timely arrangement of need based skilled manpower requirement for various
sites and to take proper action, either to transfer from one site where there is excess staff
to other site or recruit to fill the vacancies as per requirement.
7) To appraise the performance of the staff working in the department and to provide
training on a continuous basis to afford managerial skills as per need and necessity.
.
8) To co-ordinate with Regional offices, Divisional offices and Project sites for better
utilization of materials in order to reduce inventories.
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9) To coordinate with accounts, planning, regional inventory controller, mechanical
department etc, for timely arrangement of information to the Management
10) To provide timely arrangement of information for finalization of accounts and
compliance of Audit reports.
11) To ensure implementation of inventory package in all the sites and to obtain and maintain
stores data through package.
12) To ensure good house keeping and safety in all sites stores
AUTHORITIES:
Head (stores) is suitably authorized to discharge the above responsibilities
IV. SITE STORES IN-CHARGE:
RESPONSIBILITIES
1) To look after over all site stores functions and rendering reports to Regional / Divisional
Inventory Controller, functionally and reports to project manager, administratively.
2) To receive materials, accept, storage, proper handling and issue of materials to project site
and their proper recording and documenting on daily basis.
3) To take physical stock of fixed assets (F) and (A) category items, at the end of every
month.
4) To ensure reconciliation of all major materials and Fuel along with planning
engineer/mechanical department and timely submission of reports to H.O.
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5) To arrange material receipt notes (MRN) to accounts department on daily basis.
6) To ensure timely arrangement of the required information for finalization of accounts and
attending to audit observations.
7) To return rejected materials to suppliers as per advise of purchase department.
8) To identify surplus material and inform Regional / Divisional Inventory controllers from
time to time, for taking appropriate action.
9) To claim insurance for transit damage.
10) To maintain good house keeping and safety in the department.
.
11) To ensure adequate and appropriate fire fighting equipment and positioned in all storage
places.
AUTHORITIES:
Site store In-charge is suitably authorized to discharge the above responsibilities.
PROCEDURE FOR PROCESSING PURCHASE REQUISITION (PR)
Purpose : The purpose of this procedure is to define the method for PR
Processing, so as to ensure that purchased material confirms to
specifications.
Scope : This procedure covers for all items which are directly required for
Execution of the project.
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Reference : QSM: 7.4: 7.4.2 of ISO 9001: 2008
Method :
Part - I - Indents initiated by Site Project Department:
1.1 For materials planned through the B O Q (BILL OF QUNTITIES) process, the B O Q
document itself shall initiate the PR Processing activity. The project Manager at site shall
initiate the purchase requirement.
1.2 The PR shall be raised in manually prepared document which contains full information
clearly describing the material required including material specification, quality, and
metallurgy and envisage of performance whenever necessary. The PR shall also confirm
material code, UOM, delivery schedule and priority in terms of quantity, budget provision,
providing local market rate and stock available at stores on that date etc.,
1.3 For PRs for bulk purchases shall be sent to purchase department at H.O. or R.O. duly
signed by project manager and stores in charge at least 15 days in advance of
material requirement date. No indent for bulk purchase should be processed at site without
prior approval of H.O.
1.4 The project Manager should also give firm commitment to H.O. indicating the date by
which the required funds will be remitted for the purpose. The confirmation is to be sent to
H.O. along with purchase requisitions. No action for purchase will be taken by H.O. without
the receipt of PR duly signed by the project manager.
Part – II – Indents initiated by site stores department:
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2.1 For regularly required materials, the re-order level shall trigger the PR raising quantity. The
minimum levels and re-order levels of materials shall be given by planning in-charge
duly approved by project in-charge.
2.2 Based on minimum level and re-order levels. Site stores department shall raise material
requisition for procurement of materials and PR shall be forwarded to R.O/ H.O.
2.3 The Indenter should specify clearly the delivery schedule of materials in the purchase
requisitions. In case the materials required are not independent for execution of particular
job, the Indenter has to specify that all materials are required and received at one point of
time
2.4 For all small purchases, the PR should be sent to local purchase after duly approved by
project manager at site for procurement
2.5 In case of locally available materials, stores should maintain low stocks in order to reduce
inventories’
Part – III - For Plant & Machinery / Scaffolding materials.
3.1 Project Manager shall forward requisition to H O addressed to Head (Mechanical) with a
copy to Purchase Department and Planning Section.
3.2 No Machinery/shuttering materials should be shifted to other sites without written
release order from Head Office.
3.3 Purchase department shall initiate action for procurement after getting clearance from
Head Office.
3.4 Before hiring any machinery for site, consent should be taken from Head (Mechanical) so
as to ensure that our own machinery does not remain idle.
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RECORDS:
Record Name/Format
No.Approving Authority
Retention
PeriodFiling Sequence
Purchase Requisition
IVRCL/DOC/ST/01
Project Manager/
Head (Site)3 Years
Manually
Generated
PROCEDURE FOR RECEIVING THE MATERIALS AT STORES AND ITS
INSPECTION:
PURPOSE : The purpose of this procedure is to define the method of
receiving materials into stores and initiating inspection activities.
SCOPE : These procedures covered for all items which are
Directly required for execution of the project.
REFERENCE : QSM: 7.4: CL 7.4.3 of ISO 9001: 2008
RESPONSIBILITY : Stores in charge at site.
METHOD:
1.0 Receipt of materials in stores: Materials are received from Suppliers, Head office and
other sites, Clients supply, Returns from the works at site, and returns from the Sub –
Contractors at site.
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1.0 RECEIPT OF MATERIALS FROM SUPPLIERS:
1.1 All types of materials received at site should under go SECURITY REGISTRATION’ in
accordance with the applicable procedure.
1.2 After receipt of materials and delivery documents at the stores, the stores in-charge
should verify the delivery documents of the following:
- Security inward stamp
- Correctness of material w.r.t purchase order
- Correctness of quantities w.r.t purchase order/ delivery documents.
- Physical condition of the material
1.3 After verification, all the materials should be entered in a Register which is known as
“MATERIAL INWARD REGISTER” (Format: IVRCL/DOC/ST/ 02). The material
received in the stores should be recorded date wise serially in this register in detail. A
separate INWARD REGISTER has to be maintained for recording various Raw Materials
such as Aggregate, Dust, Sand, Boulders etc materials received in serial order as per Trip
Sheet numbers.
1.4 On receipt of materials at site from the suppliers, intimation has to be given to the indenting
section for carrying out inspection of material. If the inspecting officer is satisfied that the
supply is in accordance with P.O, recommends acceptance of the material.
1.5 There after, the stores in-charge should get system generated “MATERIAL RECEIPT
NOTE” (MRN), (FORMAT: IVRCL/DOC/ST/03), noting down the reference to purchase
order, suppliers invoice / challan no. & date, Description of material, quantity received,
accepted, rejected value etc., The MRN has to be signed by the stores in-charge, Inspecting
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officers and the Project Manager in token of acceptance of material. The serial number of
MRN is system generated and the MRN should be prepared strictly in the serial order of
inward entry in the material inward register. The copies of MRN’s are to be given on need
based to Purchase Department of HO/Site, Accounts Department and Stores Department.
1.6 The Stores in-charge should ensure that MRN’s are prepared for all material received at the
site and no material delivered at site left unaccounted at the end of the month, except in the
case of rejections. The above procedure for preparations of MRN would apply to all
materials received from the supplier other than aggregates like sand, bricks, metal,
boulder for which separate procedure is laid down as mentioned below.
2.0 Aggregates (BRICK, METAL, SAND, BOULDER etc).
2.1 On arrival of truck load of aggregates at site, responsible store / engineers should take the
measurements of each load of materials and unloaded at stores stock yard.
2.2 TRIP SHEET: A trip sheet in triplicate has to be prepared recording the details of carrier no.
Supplier name. Description, Quantity The trip sheets should be signed by the Engineers and
stores in-charge and obtain the acceptance of the supplier or his representative in all the
copies of the Trip Sheets. The duplicate trip sheet will be handed over to the suppliers in
token of receipt of materials.
2.3 All the trip sheet books will be machine numbered and trip sheets will be continuous
machine serial numbers. Trip sheet book should be used in serial order.
2.4 BILLS FOR AGGREGATES: The sites would prepare statement for bills every fortnight for
aggregate materials received between 16th to end of the month within 5th of the following
month and 1st to 15th before 20th of the month, enclosing all original trip sheets of the
respective materials.
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2.4.1 The supplier should submit bills duly signed along with above statement and original trip
sheets and the project manager should certify that the materials have been received and
the claim is recorded in the stores.
2.4.2 Most Importantly, the stores-in-charge should ensure that the supplier of Aggregates,
Sand, Dust and Boulders invariably submit us the statuatory payment receipts such as;
Royalty and Seignorage etc as per Govt. Rules, or else the stores-in-charge should not
entertain the trip sheets until receipt of above payment receipts.
3.0 MATERIALS received from H.O. / other sites.
3.1 For effecting transfer of any material / Asset between site / H.O., a stock transfer note
(STN), (Format: IVRCL/DOC/ST/04) has to be prepared by the sending site furnishing full
details. The STN should be exported though Inventory package system and a mail is to be
given to the receiving site.
3.2 The receiver has to import the STN and acknowledge the receipt of material and also noting
discrepancy / shortage / damage will be sent to the materials sending site for their record.
3.3.1 The materials received should be entered in the material inward register and in the stock
ledger as per STN. No separate MRN need to be prepared. The STN will serve as MRN.
3.3.2 Most importantly, for shifting the material from one place to other, the prescribed Way
Bills as per requirement of commercial tax authorities are invariably be attached with the
STNs, to meet transit requirements. To know about the various types of Way Bills, the
stores in charge is to inter act with Taxation Department at Head Office very
frequently.
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4.0 MATERIAL RETURN NOTE FROM WORK SITE/SUB- CONTRACTORS :
4.1 Sometimes surplus materials are returned from work site or by sub-contractor. SRNs are to
be prepared for all stock returns and entered in the inventory package system for valuation
and giving credit to the party or work concerned for the materials which can be re-used,
otherwise, they are to be treated as scrap and entered in scrap stock ledger.
5.0 CASH PURCHASES:
5.1 All cash purchases will be done only after approval of project in-charge.
5.2 No cash purchase amount should exceed Rs.2500/- per each indent/Bill.
5.3 All purchases should be made from registered vendors only having TIN number, that is
tax invoice etc.,
5.4 For cash purchases at site, a consolidated MRN may be prepared on daily basis. This
need not be prepared supplier wise unlike credit purchases.
6.0 STATIONERY PURCHASES:
6.1 MRN is to be prepared for the stationary purchase, like stapler, ink, pens, punching
machine, files, erasers etc,. These items may be entered in a separate stationery register.
And issues be made on stationary indent slips authorized by Head of the department.
6.2 Site should order printing of forms at sites as per the requirement.
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7.0 DEPARTMENTAL SUPPLIES (CLIENTS):
7.1 The stores materials such as cement, steel, pipes, bitumen’s and other material being
supplied by the client and accountable to them shall be maintained in separate stock ledger in the
formats as may be approved by the clients. MRN’s should be prepared for the material
received from client as per the contract. These materials come either on cost basis or zero cost
basis. A separate set of form may be used for receipts and issue and also for balance
quantity as per the requirement of clients.
8.0 FIXED ASSETS / CURRENT ASSETS:
8.1 It is a statutory obligations to maintain records for the fixed assets / current assets of the
company in the prescribed format which will facilitate to know the book balance of various
assets and their cost, procurement of additional items /new items, proper deployment of assets by
effecting inter site transfer of surplus assets, as per requirement of other sites, to work out hire
charges / depreciation and cost and to safe guard the properties and maintenance.
8.2 MRN is to be prepared for all assets purchased by H.O. and at sites.
8.3 All the Assets procured by the H.O. sites and received from other sites by transfers
should be noted in a stock ledger styled as “FIXED ASSETS
LEDGER”(Format:IVRCL/DOC/ST/05)
8.4 Inter site transfers of assets should be affected only with prior approval of H.O. On such
transfers to other locations, acknowledgement has to be obtained. On effecting the transfer,
the Stores-in-Charge should obtain an acknowledgement from the receiving site which in
turn should be sent to Head Office for proper accounting in both sites.
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9.0 INSURANCE OF ASSETS / TRANSIT CLAIM:
9.1 The site should inform H.O. with full details of such assets which are to be covered by
insurance. The insurance of such assets will be done at H.O.
9.2 While fixing policies for vehicles/machineries etc, items sold or discarded should not be
included in the policy.
9.3 In case of H.O taken delivery of the materials on behalf of sites and again transferred to the
site by separate transfers, and shortages are noticed, the site office should inform H.O.
simultaneously and cost of such shortages is to be recovered from the party bills if settled at
site, otherwise necessary action would be taken by H.O.
9.4 If the dispatches are covered by transit insurance, claims are to be lodged with the insurance
company for transit losses, if any.
10.0 REJECTED MATERIALS:
10.1 In case of any rejection of materials, due to damage or non-confirming to the specifications,
the purchase department / site / H.O. should be informed within 2 days, so that they will
take up the matter with the supplier to take back the material & replace with good materials
or refund the payment if any already made.
10.2.1 All rejected materials are to be entered in a separate stock ledger till they are returned or
otherwise disposed off.
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RECORDS:
Procedure for storage of materials:
PURPOSE: The purpose of this procedure is to define the method for storage of
materials in bins stores area / storage yard, after receiving inspection
activities.
SCOPE: This procedure covers for all items which are directly required for execution
of the project.
REFERENCE: QSM: 7.5; CL 7.5.5 of ISO 9001: 2008
RESPONSIBILITY: Site stores in-charge.
Sl.N
o
Record Name
Format No.Ref No
Approving
Authority
Retention
Period
Filing
Sequence
1
Material Inward
Register IVRCL/DOC/ST/02Site Stores
In-charge3 Years Manual
2
Material Receipt
Note(MRN)IVRCL/DOC
/ST/03Project Manager 3 Years
System
Generated
3
Stock Transfer Note
(STN) IVRCL/DOC/ST/04 Project Manager 3 YearsSystem
Generated
4Fixed assets Ledger
IVRCL/DOC/ST/05Site Store In-
charge3 Years Manual
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METHOD:
1.0 Purchased materials should be stored and issued for execution of the project after the
acceptance of the material by the concerned departments on the material receipt note
(MRN)
1.1 After receipt and approval of materials at the site, the stores department should take
proper care for their storage in Bins or Racks at convenient places and protect
them from damage, losses, obsolescence etc., and to issue them wherever required for
use in the works.
1.2 The materials are to be stored for easy identification of bins to avoid unnecessary delay in
locating, and making physical verification of store items easily
.
1.3 Non-Bulk materials and shelf life items received from different consignments should be
stored separately to facilitate FIFO issue.
1.4 The rejected materials are to be moved to a designated area and they should not be
mixed with approved or accepted materials.
1.5 The site stores in-charge should periodically review the rejected designated area to ensure
prompt return of the material back to the suppliers.
1.6 All hazardous materials should be stored separately, as per prevalent statutory
regulations. The storage go down should be provided with proper ventilation. Material
safety data sheets (MSDS) should be obtained from material suppliers and kept in stores
for reference.
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PROCEDURE FOR ISSUE OF MATERIALS
PURPOSE : The purpose of this procedure is to define the method for issue of
materials from storage bin areas/stores yard to project department / sub-
contractor.
SCOPE : This procedure covers for all items which are directly required for
execution of the project.
REFERENCE : QSM: 7.5; CL 7.5.1 of ISO 9001 – 2008
RESPONSIBILITY: Site stores in-charge.
METHOD:
1.0 Materials are to be issued only on a written requisition duly signed by Project in-charge
or authorized person by him. This format is known as ‘Material Issue Voucher’(Format:
IVRCL/DOC/ST/06)
1.1 The issue voucher should contain description, material code, quantity to be issued, and
name of the work for which it is required, location / Area, contractor, etc.,
1.2 All shelf life items should be issued on ‘FIRST IN FIRST OUT’ (FIFO) basis.
1.3 Issue of materials should be done only from accepted materials lying in stores. No
rejected material should be issued.
1.4 The site stores in-charge is authorized to issue materials against materials issue voucher.
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1.5 After delivery of materials to the user, acknowledgement has to be taken on both the
copies of issue indent. The original copy will be retained in stores and duplicate given to
the indenter with materials.
1.6 The site stores in-charge should ensure that no material is issued without properly
authorized material issue voucher.
1.7 All the material issue vouchers should be updated into the package system by stores
department on day-to-day basis.
2.0 ISSUE OF AGGREGATE MATERIAL:
2.1 As per the requirement of the site Engineer, the stores department shall issue all
aggregate materials such as Sand, Bricks, Metals, boulders etc., from the stock yard
against material issue voucher.
2.2 In order to avoid multiple handling, the aggregate materials shall be directly unloaded at
site as per requirement In consultation with Project-in-Charge.
2.3 The stores department has to obtain information from site Engineers about actual issue
and theoretical consumption on a monthly basis.
3.0 STOCK TRANSFER NOTE:
3.1 When materials are dispatched from one site to another site, the materials should go with
proper STN and also a gate pass in duplicate. One copy of gate pass will be handed over
to the party. The security personnel at the gate will check the material being taken out
with gate pass. After satisfying, he will affix a stamp “CHECKED WITH GATE PASS”
on the STN and allow the materials to be taken out. The gate pass prevents any
pilferage, theft from the stores.
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3.2 Further “STOCK TRANSFER NOTE” (STN)(Format: IVRCL/DOC/ST/04) is to be
exported from Inventory Package, through E-mail. In order to import the document by
the receiving site.
3.3 The material receiving site should acknowledge the receipt of material and send
duplicate copy of challan or e-mail message to sending site.
4.0 MATERIALS ISSUED ON COST RECOVERY BASIS TO SUB-CONTRACTORS
AND OTHERS:
4.1.1 The materials are issued to sub-contractor or others on cost basis, as per the work order.
4.1.1 A clear indication may be given on issue indent to recover cost. The parties are to be
debited at the issue rate along with approved overhead charges.
4.1.2 The site stores in-charge should also make monthly summary of debit notes party wise
and recheck with accounts.
5.0 MATERIAL ISSUED FREE BUT ON ACCOUNTABLE BASIS.
5.1.1 The sub-contractor shall draw the materials from stores against issue voucher, at free of
cost as per work order conditions.
5.1.2 The sub-contractor shall be responsible for drawing the materials from stores, loading,
transportations to the actual work site and unloading, proper storage and security/ safety
of materials till the job is completed.
5.1.3 In case of surplus materials or scrap is available, the sub-contractor shall return the
surplus material / scrap to stores at their cost.
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5.1.4 The sub-contractors are required to submit the reconciliation of materials at every
running bill stage showing the theoretical consumption and actual consumption failing
which there may be delay in releasing the payment. Any discrepancies found in the
reconciliation resulting in losses / wastage beyond actual consumption, the cost of the
same should be recovered from the sub-contractor’s bill.
6.0 MATERIALS ISSUED ON LOAN / RETURNABLE BASIS:
6.1 All materials issued to outside parties on loan/returnable basis or for fabrication or for
repairs are to be recorded in a separate register.” RETURNABLE MATERIALS
REGISTER” (Format:IVRCL/DOC/ST/07)
6.1.2 A returnable gate pass (Format:IVRCL/DOC/ST/08) has to be prepared and issued to
the party who will surrender the same to the security Personnel at Gate, while taking
the materials out of premises
.
6.3.1 Security Persons will check materials and documents for all outgoing materials./
equipments and allow to leave only on conformity.
6.3.2 The site stores in-charge should keep track of the returnable material and necessary
follow up is to be done.
6.3.3 When the materials are received back in stores, the same should be checked and if in
order, take delivery, otherwise, justification to be given by the returning party or else cost
of such material should be deducted.
6.3.4 A note of such returns should be made in the original returnable gate pass as well as loan
register against the original entry.
6.3.5 In case of materials not returned by the party, the cost of the material with overhead
charges is to be debited to the party.
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6.8 Tools & Tackles, personnel protective equipment and measuring instruments shall be
issued to all on returnable basis by entering in returnable material register. In case of non-
return of these materials, the cost of the same shall be recovered from the concerned
personnel / contractor.
7.0 ISSUE OF CLIENT”S MATERIAL:
7.1.1 When client materials are to be issued to site, proper record is to be maintained w.r.t.
Receipt of materials, issued and balance quantities in client’s account.
7.1.2 It is the responsibility of the stores-in-Charge to verify the quantities of all material
issued by clients on monthly basis to avoid any deviation/variation.
8.0 ISSUE OF FUEL & LUBRICATS:
8.1.1 Fuel and lubricants shall be issued to vehicles, machinery, plants & Equipments either
directly from nearest fuel filling station or from stores against issue voucher
8.1.2 Fuel issue quantity is to be entered in vehicle Logbook (Format: IVRCL/DOC/ST/09)
which will be available the Operator/Driver.
8.1.3 Stores shall maintain a separate register (Format:IVRCL/DOC/ST/10) for fuel issue to
each vehicle / equipment.
8.1.4 Stores in-charge has to verify the mileage of each vehicle and any excess consumption of
POL is observed, the issue should be brought to the notice of the concerned Engineer
immediately.
9.0 HIRED EQUIPMENT / VEHICLES .
9.1 The company may hire equipments / vehicles for execution of the project.
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9.2 Stores shall maintain separate register for hired materials / equipment deployed at site.
9.3 In case of any issue of spares or fuel to these hired equipment / vehicle, the same may
recorded in the HIRED EQUIPMENT REGISTER and the cost of the same shall be
recovered from the contractor’s bills as per Work Order conditions.
10.0 SCAFFOLDING MATERIALS:
10.1 Stores in-charge shall monitor strictly the issue of scaffolding materials and reviewed by
project manager from time to time.
10.2 After the use, the scaffolding material should be cleaned and returned to the stores for
proper storage.
10.3.1 To preserve the materials whenever required preservatives are to be applied in the threads
of outer surface and in the surface of shuttering plates.
10.3.2 The use of shuttering materials as covers to drain / man holes should not be used.
10.3.3 Damaged materials/scrap should be disposed off with approval of H.O and after
necessary accounting in the stores ledger.
10.3.4 For disposal of scrap, a minimum of 3 competitive quotations duly covering the
statuatory taxes should be obtained and the material will be sold to highest bidder on
collecting the amount in advance.
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RECORDS:
S.N
o
Record Name
Format NoRef No
Approving
Authority
Retention
Period
Filing
Sequence
1
Material Issue
IndentIVRCL/DOC/
ST/06
Site Stores In-
Charge3 Years Manually
2
Stock Transfer
NoteIVRCL/DOC/
ST/04
Site Stores In-
Charge3 Years
System
Generated
3
Returnable
Material RegisterIVRCL/DOC/
ST/07
Site Stores In-
Charge3 Years Manually
4
Returnable Gate
PassIVRCL/DOC/
ST/08
Site Stores In-
Charge3 Years Manually
5Vehicle Log Book IVRCL/DOC/
ST/09
Site Stores In-
Charge3 Years Manually
6
Fuel/Lubricants/
Spares issue
Register
IVRCL/DOC/
ST/10
Site Stores In-
Charge3 Years Manually
Procedure for periodic verification of quality deterioration of stores
material
PURPOSE: The purpose of this procedure is to defined in the method for periodic
verification of quality deterioration of stored materials.
SCOPE: This procedure covers for all the items which are directly required for
execution of the project.
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REFERENCE: QSM: 7.5; CL 7.5.5 of ISO 9001: 2008
RESPONSIBILITY: Site stores in-charge.
METHOD:
1.0 Periodic verification of the quality of stored material should be carried out together with
verification of the quantities by stores.
1.1 Periodic quality verification should include, at a minimum the following:
- Mix up consignments
- Storage period.
- Visual characteristics such as rusting of steel, cracking of rubber components,
solidification of cement bags etc.,
- Damage / deterioration of the containers / packing or any leakage etc.
1.2 Based on observations on verifications as mentioned above (1.1), the materials are to be
retested or inspection to be carried out in case of any deterioration of material to
determine as to whether the material is usable.
1.3 After verification or inspection, the materials are not confirming to specifications, those
materials are to be moved to a quarantine area and disposed off suitably
.
1.4.1 Observations of periodic quality verification should be recorded in “periodic quality
verification report” including the test report if any.
1.4.2 Site stores in-charge should initiate appropriate counter measures and
corrective/preventive actions on the findings of periodic quality verification report.
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PROCEDURE FOR MATERIAL HANDLING
PURPOSE : The purpose of this procedure is to define the method of
handling materials.
SCOPE : This procedure covers for all items which are directly
required for execution of the project
REFERENCE : QSM; 7.5; CL 7.5.5 of ISO 9001: 2008
RESPONSIBILITY: Site stores in-charge.
METHOD :
1.0 Various mechanical means such as forklift, trucks, trolleys, loaders, bulldozers wooden
pallets wooden sleepers, etc are used, as appropriate, for handling materials.
1.1 Equipments need for handling materials should be kept clean to prevent contamination
effect.
1.2 Damage of packaged materials, prevention should be ensured by training of personnel
engaged in handling the materials.
1.3 Slings for crane are to be checked before using.
1.4 No person should sit or travel on the mobile crane.
1.5 PPE like safety helmets, Hand gloves and shoes are to be used.
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LIST OF EQUIPMENTS AND MEASUREMENT DEVICES IN STORES
AREA
PURPOSE : The purpose of this procedure is to list out the equipment & measurement
Devices used in stores area.
SCOPE : All areas of stores department.
REFERENCE: QST: 7.5; CL 7.5.1 of ISO 9001: 2008
RESPONSIBILITY: Site stores in-charge.
METHOD:
1.0 List of equipments and measurement devices and areas of usage are to be listed.
1.1 Periodical calibrations of the measuring devices are to be carried out.
PROCEDURE FOR MAINTENANCE OF SAFETY
PURPOSE : The purpose of this procedure is to define the method of maintaining safety
in the department.
SCOPE : This procedure covers the maintenance of safety of personnel, material and
equipment in the department.
REFERENCE : QSM: 6.4 of ISO 9001: 2008
RESPONSIBILITY: Site stores in-charge.
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METHOD:
1.0 Suitable Fire extinguishers / Fire hydrants in all storage areas should be maintained.
2.0 Suitable personnel protective wear like nose mask, hand gloves and gum boots should
be provided whenever required.
3.0 Safety precautions pertaining to material handling shall be displayed at all required
places.
4.0 Safety related matters should be revised periodically and pursued through the department
meetings.
5.0 Name of the personnel trained in First Aid should be displayed in different areas of the
department for easy accessibility in case of any emergency.
PROCEDURE FOR MAINTAINING QUALITY RECORDS
PURPOSE : The purpose of this procedure is to define the method for controlling the
quality records in the department to enable safe maintenance and easy
retrieval.
SCOPE : All the quality records are to be maintained.
REFERENCE : QSM: 4.2; CL 4.2.4 of ISO 9001: 2008
RESPONSIBILITY: Site stores in-charge.
METHOD :
1.0 Quality records required for providing evidence of any activity should be identified in the
quality system procedure covering that activity.
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2.0 Designated storage area / provisions should be made to protect the records from damage
and deterioration.
3.0 Storage provision should be prominently identified.
4.0 The files / storage provision should be legibly labeled so as to permit easy retrieval of the
files / records.
5.0 Suitable provision should be made for keeping the old records required for reference.
6.0 Records which are maintained in the computer system should be protected suitably by
backups and for data integrity and security.
PROCEDURE FOR COLLECTION AND DISPOSAL OF WASTE MATERIAL:
PURPOSE : The purpose of this procedure is to define the method for collecting
material wastage and their disposal.
SCOPE : This procedure covers for all wastage items which are generated during the
execution of the project.
REFERENCE: ---
RESPONSIBILITY: Site stores in-charge.
METHOD:
1.0 COLLECTION AND RECORDING OF SCRAP / WASTE MATERIAL:
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1.1 Stores should collect all types of waste materials, such as tor steel, MS steel, SS, GI,
Aluminum, Brass, Copper, Rubber, cotton, Plastic, waste oil, wooden and electrical
scraps etc.,
.
1.2 All the receipts of scrap / waste materials are to be recorded in the “Scrap Register” as
per Format (IVRCL/DOC/ST/ 11), on regular basis
.
1.3 All waste materials are to be stored separately, without mixing.
1.4 While issuing spares for equipment and electrical items such as bearings, governors,
discs, metal etc., the worn out spare parts must be collected by stores.
1.5 The stores in-charge should endorse on invoice of new items that the worn out spare
parts have been returned to the stores, hence new items are purchased. Based on this
endorsement, the accounts will make payment to the party.
1.5 The worn out spares are to be stored separately and to be issued for re use in case of
emergency.
2.0 DISPOSAL OF SCRAP / WASTE MATERIAL.
2.1 The accumulated scrap / waste materials shall be disposed off at least once in a year or
earlier basing on the volume of quantity.
2.2 A minimum of 3 quotations for each category of waste materials, shall be obtained and a
comparative statement is to be prepared. All the buyers mentioned in the comparative
statement should have valid TIN/PAN.
2.3 A note with details of quantity and expected realization along with comparative
statement shall be forwarded to H.O. for approval of Executive Director.
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2.4 After ED’s approval, the sale order is to be issued in favor of prospective buyer and the
full amount of realization should be taken by way of Demand Draft / Cheque.
2.5 After realization of payment for full value, the delivery is to be given to the buyer along
with invoice with applicable VAT or CST and TCS.
2.6 This amount is to be accounted for in the respective site / regional office with the support
of ED’s approval attached.
2.7 One copy of invoice is to be forwarded to TDS section at H.O and the second copy of
invoice is to be arranged to the accounts where VAT returns are being filed.
2.8 The above documents are required to be arranged on quarterly basis to accounts
department, H.O.
3.0 SALE OF VEHICLES.
3.1 The procedure for sale of vehicles shall also be applicable as per the sale of scrap / waste
materials as mentioned in 2.2 to 2.8.
3.2 After making full payment by the prospective buyer, the vehicle is to be handed over with
transfer of R.C. Book.
3.3 The applicable VAT or CST along with ‘C’ form is to be charged.
3.4 The sale is to be affected in the fixed assets register by posting of necessary issue
voucher.
PROCEDURE FOR CLOSING OF PROJECT STORES :
PURPOSE : The purpose of this procedure is to define the method for closing of
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Stores immediately after a project is completed.
SCOPE : The procedure covers for all stores of the company.
REFERENCE : ---
RESPONSIBILITY: Site stores in-charge.
METHOD:
1.0 The site stores in-charge should prepare a list of materials / assets available at site and
send the same to H.O. / D.O. / R.O. in advance, through project manager.
1.1 The H.O. / D.O. / R.O. will issue necessary instructions about their transfer to other sites
or for their disposal.
1.2 As per instruction of H.O. / D.O. / R.O. Stores has to dispatch material / assets to other
sites or disposed off following the procedure.
1.3.1 Major stores records should be properly packed and listed out the important
files, and other valuable documents which are to be dispatched to R.O. / D.O. /
H.O. or central stores.
1.3.2 All loose items, waste materials and no longer required records etc., which are
not useful, should be disposed off with approval of project manager.
1.3.3 All stores in-charge will be relieved only after proper material reconciliation
of all major stores items and handing over all records and materials to the
nominated persons as per project manager instructions.
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TRAINING NEEDS FOR THE DEPARTMENTAL
PERSONNEL :
PURPOSE : The purpose of this procedure is to define the training needs of the
Personnel of the Department.
SCOPE : Training of all personnel in different level working in the department.
REFERENCE: QSM: 6.2; CL 6.2.2 of ISO 9001: 2008.
RESPONSIBILITY: Head (Stores)
METHOD:
1.0 The identified training needs of the personnel working in stores are given, category wise,
in the table.
2.0 The training needs should be periodically reviewed.
3.0 Employee should be deputed to suitable training programs, as and when arranged by the
H.O. / R.O
4.0 Proper guidance should be given, from time to time, to personnel in job.
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TABLE:
Slno EMPLOYEES CATEGORY TRAINING NEEDS
1
Manager (Stores) / Regional &
Divisional inventory
controller
- Quality system development and implementation
- Managerial development skills.
- Implementation of inventory package.
- Communication & MIS
2Site stores in-charge
- Quality system implementation
- Latest material handling system and methods
- Electronic system handling.
- Implementation of inventory package.
- Employee development program
3 Workmen
- Quality system awareness
- Safety awareness program
- Material handling techniques.
MANAGEMENT INFORMATION SYSTEMS
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PURPOSE : The purpose of this procedure is to define the method for timely providing
Information to management.
SCOPE : This procedure covers for all materials which are directly required for
Execution of the project.
REFERENCE: QSM: 5.6; CL 5.6.2 of ISO 9001: 2008
RESPONSIBILITY: Site stores in-charge / Regional or Divisional inventory controllers.
METHOD:
1.0 STORES MATERIAL RECONCILATION :
1.1 The major material reconciliation is to be carried out on monthly basis by site stores in-
charge.
1.2 Reasons for deviation, between received quantity and issued quantity, are to be analyzed
and reported.
1.3 The details are to be made as per Format (IVRCL/MIS/ST/12).
1.4 The reconciliation of fixed assets are to be carried out, once in a quarter, by stores in-
charge as per format (IVRCL/MIS/ST/13).
2.0 MAJOR MATERIALS RECONCILATION :
2.1.1 The over all reconciliation of major material is to be carried out monthly basis, by
stores in-charge/Regional or Divisional Inventory controller and project manager as per
format (IVRCL/MIS/ST/14).
2.1.2 Both the stores in-charges and project engineers shall assess the discrepancies.
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2.1.3 If any losses observed, the reasons for the losses are to be ascertained and recorded in the
register.
3.0 SUB CONTRACTOR WISE RECONCILIATION OF MAJOR MATERIALS :
3.1.1 The major materials issued to sub contractors are to be reconciled, once in a month, by
stores in-charge / regional or divisional inventory controllers, and project engineer as per
format (IVRCL/MIS/ST/15).
3.2 Project engineer shall obtain and provide to stores in-charge that a statement of quantity
issued, quantity used (theoretical) and balance quantity lying at the sub-contractor area
duly signed by the project manager.
3.3 Incase of any shortages noticed with sub-contractor, the cost of the materials is to be
recovered from the sub-contractor bills.
4.0 BILLED QUANTITIES Vs PAID QUANTITIES:
4.1.1 The statement showing the details of BOQ executed and billed to the client, and
payments made to the sub-contractors, on quarterly basis, by Regional/Divisional
Inventory controllers, as per format (IVRCL/MIS/ST/16).
4.1.2 Reasons are to be ascertained incase of paid quantities are more than billed quantities.
5.0 STATUTORY REPORTS:
5.1 Stores have to prepare and submit the following statutory reports to accounts department
on quarterly basis.
1.Quarterly closing stock statement of stores items
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2.Fixed assets statement
3.Quantity reconciliation of major construction materials
4.MRN and PJV Reconciliation statement/extract of MRN Registers
MASTER LIST OF FORMATS
S.No. Document No. Document Title
01 IVRCL/DOC/ST/01 PURCHASE REQUISITION
02 IVRCL/DOC/ST/02 MATERIALINWARD REGISTER
03 IVRCL/DOC/ST/03 MATERIAL RECEIPT NOTE (MRN)
04 IVRCL/DOC/ST/04 STOCK TRANSFER NOTE (STN)
05 IVRCL/DOC/ST/05 FIXED ASSETS LEDGER
06 IVRCL/DOC/ST/06 MATERIAL ISSUE SLIP
07 IVRCL/DOC/ST/07 RETERNABLE MATERIAL REGISTER
08 IVRCL/DOC/ST/08 RETURNABLE GATE PASS
09 IVRCL/DOC/ST/09 VEHICLE LOG BOOK
10 IVRCL/DOC/ST/10FUEL & LUBRICANTS AND SPARES ISSUE
REGISTER
11 IVRCL/DOC/ST/11 SCRAP REGISTER
12 IVRCL/MIS/ST/12 STORES MATERIAL RECONCILIATION
13 IVRCL/MIS/ST/13 FIXED ASSETS RECONCILIATION
14 IVRCL/MIS/ST/14 ALL MAJOR MATERIAL RECONCILIATION
15 IVRCL/MIS/ST/15SUB-CONTRACTOR WISE MATERIAL
RECONCILIATION
16 IVRCL/MIS/ST/16 BILLED QUANTITIES VS PAID QUANTITIES
17 IVRCL/MIS/ST/17 QUARTERLY CLOSING STOCK
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STATEMENT OF STORES ITEMS
18 IVRCL/MIS/ST/18 FIXED ASSETS STATEMENT
19 IVRCL/MIS/ST/19QUARTERLY RECONCILIATION OF MAJOR
CONSTRUCTION MATERIALS
20 IVRCL/MIS/ST/20
MRN AND PJV RECONCILIATION
STATEMENT / EXTRACT OF MRN
REGISTER
FINDINGS AND SUGGESTIONS:
1. The material issue vouchers are manually prepared and posted into the package at a later
date, due to which higher stock values are being relfected. To arrive at exact quantities
on day-to-day basis, system generated issue vouchers should be implemented.
2. The major material such as steel & cement are being procured from limited parties. Since
the consumption is much more, the supply areas should be widened to have a competitive
rate with quality.
3. At times, the cement & steel procured in bulk quantities is not consumed within a short
span which is resulting in blockage of funds. This is also reflecting in lesser receipt from
clients as the items are not fully executed by utilizing the procured quantities.
4. The cement bags should be opened by cutting on top portion with a blade so that
wastage of cement is curtailed and empty bags could become usable for other purposes
or can be disposed off if they are in good condition.
5. The raw material such as Aggregates & Sand etc are not properly dumped/ stacked at
various locations of site and are scattered in more area than required which is resulting
in avoidable wastage. Proper care should be taken for stacking the material within limited
space. Special care should be taken during rainy season when the percentage of wastage
would be beyond any one’s control.
6. The scrap lying at various locations is not being collected and stacked properly, leaving a
room for mis-use or theft. The scrap should be periodically collected from all locations
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and stacked in Main store for proper security and further accountability and also to
dispose off them at frequent intervals to lessen the burden as well as to gain income.
7. Periodical maintenance of the machinery, equipments, plants and vehicles is not being
done owing to exigencies. However, a reasonable time should be fixed for their
maintenance which would increase the capacity of utilization as well as life span.
CONCLUSIONS :
Since execution of project is by utilizing the machinery and manpower,
expected/projected out come can not be achieved owing to the reasons beyond the
reach/control such as non-availability of required skilled/unskilled manpower and frequent
break down of machinery/equipment, non-availability of major material in time or due to
natural calamities etc or delay from clients in according approvals and decisions etc duly
fulfilling their part of contractual obligations. Hence it is beyond prediction that the project
would be completed well within time earning projected margin.
The project, when completed, would extend irrigation facilities to a total ayacut of 50250
acres in Mahbubnagar dist boosting up the cultivation in many villages as well as increasing
the economy and life style of farmers.
BIBLIOGRAPHY
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Financial Accounting (By RP Trivedi)
Financial Management (By IM Pandey)
Fundamentals of Financial Management (By Prasanna Chandra)
Detailed Project Report of IVRCL Limited
Web sites
www.ivrcl.com
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