stores and stock controls tasks and sop's
TRANSCRIPT
Training, Recruitment, Management & Operations ConsultantsTel: +256 392 943 485, +254 724 132 926 or [email protected]
STORES AND STOCK CONTROLS TASKS AND SOP’S.
AREAS TO COVER
1. Purchasing2. Receiving3. Issuing4. Recipes5. Stock Taking6. Possible reasons for the variance7. Stores set up8. Minimum and maximum stock levels9. Tagging system10. Cleaning11. Handling damaged stock items in the
stores.12. Spots checks at stores.13. Need for spot checks.14. Stock turn over rate.15. Implications of the stock turn over
rate
PURCHASING
Making of L.P.O (local purchase order)
• It’s a document that enables the
people concerned to know what topurchase and where to purchase it,and it acts a control measure.
• Before an L.P.O is made the
departmental user should make aninternal purchase requisition that willact as a guide line on the personmaking it using the system.
• L.P.O is made then signed with the
H.O.D this to verify that what he orshe ordered is what that has beenwritten.
• The L.P.O is then taken to the
general manager for authorization.
• It’s usually in copies of twos one
copy remain in the stores and thecopy is taken by the supplier.
• Date of delivery should be indicated
on the L.P.O to avoid delays insupplying the goods.
RECIEVING
• This is a very sensitive session.
Before receiving the people concernshould be in place to receive so as tocheck on quantity and quality andalso two or more people should bepresent to see to it that what was
requested is what has beenpurchased and delivered.
• When receiving the following
documents should accompany thegoods:
1. Delivery Note-Does notcontain prices only the goods delivered& there quantities.
2. Invoices -This adocument that shows the quantitydelivered and amount to be paid for thegoods delivered.
• Receiving is always done before 5
o’clock in the evening this is to avoidreceiving things in a hurry.
• In case the supplier supplies goods
that are not in good condition and onefeels that it should be returned then aGOODS RETURN NOTE should be raisedimmediately in copies of two where byoriginal goes to the supplier and thecopy remains with the accounts office soas when payment is done the amount isreduced from the original invoice.
• Checking of expiring dates when
receiving its very important this is toavoid receiving goods that have alreadyexpired.
ISSUING
• Issuing is normally done after the
items needed to different departmentshave been written in the departmentalrequisition book and signed by the headof department or the concernedauthorities.
• It is done twice a day that is in
the morning from 9:00am to 10:00amand from 4:00pm to 5:00pm in theevening.
• In case the items issued are not
in good condition say spoiled, then it isreturned to the store and written asspoilages thus reducing it from the stockin the system (MC).
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Training, Recruitment, Management & Operations ConsultantsTel: +256 392 943 485, +254 724 132 926 or [email protected]
• The FIFO or the LIFO method of
issuing should be used.
• The bin cards are then updated in
terms of what was issued that day fromthe cost centers.
• After the issuing, the items are then
transferred into the system i.e. MC fromdifferent cost centers to differentdepartments and then booked.
STORE SET UP AND STORAGE
• The store should be arranged in a way
that foods are separate from non foodslike toiletries, or toxic goods which couldcontaminate the foods.
• The perishables should be monitored
closely and they should be stored in awell ventilated area to avoid high rate of spoilage. And in case they show signs of spoiling they should be issued first andthe totally spoilt should be weighed andthen deleted from the system asspoilages or damages. Bin cards shouldbe put alongside the items for easymonitoring and updates.
• The store should be hygienically
maintained in order to avoid rodents andcontamination or air pollution.
• When arranging the stores the FIFO (first
in first out) method must be used. This isto avoid good expiring at high rate.
• Meats should be kept according to their
types. White meats should be keptseparate from red meats. This to avoidcontamination
• White meats should be stored below
negative eighteen centigrade.
• Red meats should be stored below
negative twelve degrees centigrade.
HANDLING DAMAGE STOCK ITEMS IN
THE STORES
• These should be recorded in the
damaged goods book after stock taking.
• They should then be removed from
stores via stores issue requisition.
• The requisition should then be valued
and figure written off after approval.
• The F&B controller must inspect the
faulty goods before they are written off and then supervise their disposal, sothat they are not for fraud later.
RECIPES
• This is a very important component
in the system.
• Recipes help in reduction of items
especially items that are consumedin the bar like beverages and food inthe kitchen.
• Recipes are very sensitive they
should be fed in the system withright units and right quantities of ingredients.
• Wrong units and quantities of
ingredients leads to wrong valuesand also wrong food and beveragecost.
STOCK TAKING
• Stock taking is done on daily, weekly or
monthly procedure.
• When taking stocks for the bars tot
measure rulers and stickers are used.
• This is to enable the stock controller get
accurate measurements.
• In case of a shortage the stock controller
verify if it’s a genuine one in case thereis no evidence or clear picture about theshortage the person responsible shoulddefinitely pay for the shortage.
• The shortages are always detected after
the stocks have been fed in the system.And the system automatically calculatesit’s self and gives the difference.
POSSIBLE REASONS FOR THE
VARIANCES
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Training, Recruitment, Management & Operations ConsultantsTel: +256 392 943 485, +254 724 132 926 or [email protected]
• Issuing different quantities from those
indicated on the stores issue requisition. This will result in either stock overagestock shortage.
This problem can be controlled troughincreased efficiency in issuing.
• Wrong entries on the stock control
records. This can be solved by counter checking all
entries on stock control records againststores issue requisitions.
• Wrong calculations on the stock control
records thus depicting wrong balances. This can be solved by checking all
calculations again.
• Omitting some entries on the stock
control records.
This can be solved by counter checking theentries on stock control records againstthe stores issues requisition.
• Removing items from stores without
accounting for them through storesissue requisitions.
This can be solved by avoiding verbalordering and issuing.
• Pilferage (theft) of store items from
storage areas. This can be solved by holding the store
keeper responsible for any loss that mayarise out of pilferage. Appropriatedisciplinary action should be meted out.
MINIMUM AND MAXIMUM STOCK
LEVELS
• These are stock level that controls
the purchasing of goods in thestores.
• Mostly they are done at the start of
the month in order to direct or give aclear picture of what to be purchasedand in what quantities.
• With the stock levels it’s not easy to
run out of stocks unless the turn overbecomes higher than it was expectedof.
TAGGING SYSTEM
• Tagging is mostly used on all types
of meats.
• This is to enable the easy access of
different types of cuts when frozen.
• It also makes stock taking easy.
• It also makes storage look neat and
clean if arranged systematicallyaccording to the tags.
• It’s easy to detect if you have
shortage.
• With the tagging when the stocks are
low it’s easy to know.
CLEANING
• Stores should be cleaned on daily
basis.
• The freezers should be cleaned on
weekly basis this to avoidcontamination from the dirt.
• When cleaning the freezers a blunt
object should be used not a sharpobject which might interfere with thesystems of the fridge.
• Before cleaning the freezers power
should be put off to avoid shot.
• Vegetable area should always be
clean and dry. Dampness should beavoided because it causes rotting.
SPOT CHECKS AT THE STORES
• Spots checks are necessary where
the stock taking intervals is long e.g.one month.
• This involves picking a few items at
random, counting them and thencomparing the results with therespective stock control records.
• Spot check should be carried out
with the same personnel who do theregular stock taking.
• Any variances noticed must be
investigated immediately.NEED FOR THE SPOT CHECKS
• They ensure that perpetual inventory
records are kept up to date andaccurate all the time.
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Training, Recruitment, Management & Operations ConsultantsTel: +256 392 943 485, +254 724 132 926 or [email protected]
• They help identify problems early enough
for the corrective action to be takenin good time before the main stocktaking exercise.
STOSTOCK TURN OVER RATE
• Stock turn over rate refers to the
number of items that stock is turnedinto revenue in a given tradingperiod
• In financial terms, it measures the rate at
which stock is consumed i.e. being turnedinto cost and thereby generating revenue.
• Stock turn over rate is used by stock
controllers to assess how much money isbeing invested in non-productive stock,i.e. the items that take too long in storageareas before they are requisitioned byproduction or selling outlets for generationof revenue.
• The rate of stock turn over rate depends
on two factors:
• Size of the stores. A smaller store results
in a high rate while a lager store results ina lower rate.
• Location of the establishment in relation
to suppliers. The nearer to the supplier,the higher the rate and vice versa.
IMPLICATIONS OF THE STOCK TURN OVER
RATE
• A high stock turn over rate may mean that
less money than necessary is beinginvested in stock. This can easily causestock shortages leading to decreasedsales and customer dissatisfaction.
• A low stock turn over rate may mean that
more money than necessary is invested instock. This can result in excessive stocklevels that can lead to:
• Spoilage and product quality deterioration
• Wasted work force (higher labour cost)
especially for people handling theexcessive stock.
• Higher storage costs for the excessive
stock.
Training, Recruitment, Management & Operations ConsultantsTel: +256 392 943 485, +254 724 132 926 or [email protected]
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