2. Conduct Protocol
Evolution of Store Management
Introduction of Store Management
Functions of Hospital Store
Types of Hospital Stores
Planning of Hospital Stores
Control of Store
Planning of Store
Location of Stores
Layout of Stores
Safety of Store
Security of Store
Auditing
Stock Verification
Pilferage
3. “Hospitals need to actively manage what is bought, when it is to bought, how
much, as well as for what price, including discount and rebates.”
- Chris Holt
Vice President, UPS
Supply Chain Solutions
4. The Evolution
of
Store Management
Inventory management was first invented by Adam when he named all the
animals or by Noah when he counted the clean and unclean beasts for the
Ark
Before the Industrial Revolution, merchants basically had to write down all
of the products they sold every day
Then they had to order more products based on their hand-written notes
and their gut feelings
But merchants couldn’t really account for stolen goods
They also had trouble making sure they got the right number of products
when orders came in because of sparse record keeping
5. 1880s – The Machine
Readable Punch Card
In 1889, Herman Hollerith invented the first punch card that was readable
by machines
It allowed people to record data for a variety of purposes, from census
taking to work timesheets, by putting tiny holes in sheets of paper
Harvard University was inspired by Hollerith’s idea in the 1930s and
created the first modern check-out system
It used a punch card that corresponded with catalog items and was used
to generate billing as well as manage inventory
A version of this system is still used today for expensive and controlled
items such as medication, however, it did not become too popular because
of its high costs and slow lead time
6. 1940s – The Barcode
The precursor to the modern barcode was created in the late 1940s and
early 1950s
It was composed of ultraviolet light-sensitive ink and reader
In the 1960s, a group of retailers came together and came up with the
modern barcode to track inventory
Lasers allowed for cheaper and faster scanners
Universal Product Code (UPC), the first barcode was born and widely
accepted in the late 1960s
A 10-pack of Juicy Fruit gum was the first item to have its barcode
scanned was on June 26, 1974 at a Marsh supermarket in Troy, Ohio
7. 1980s –
Software Improves Tracking
Technological advancements in the 1980s and 1990s made inventory
tracking even more efficient with the implantation of more advanced
computers and inventory management software
These systems worked in a cycle, from purchasing to tracking and
monitoring inventory, then back again
8. 2000s – The Introduction of
RFID in Barcode Technology
RFID (Radio-frequency identification) technology was first patented in
1970s and has become a staple in warehouses, factories, and retail stores
in the 2000s
It uses a microchip to transmit product information, such as serial number,
type of product, or manufacturer, to a scanner
Scanners are able to read the RFID tag without being in direct sight, which
makes it ideal for reaching high shelves in warehouses
It also is able to store more information that the basic barcode
9. Introduction
Store is a secured or safe place where all kinds of medicines &
consumables received, stored and issued to users as their need arises.
• Store can be centralized or decentralized.
Storekeeping is the process of handling and maintaining medicines &
consumables in the store and in good condition.
Stock is referred to as the materials/products kept in the store to facilitate
smooth running of the hospital.
• It is also referred to as inventory.
10. Introduction cont…
Stores management:
to receive materials, to protect them while in storage from damage &
unauthorized removal, to issue the material in the right quantities, at the
right time to the right place and to provide these service promptly and at
least cost
is concerned with ensuring that all the activities involved in storekeeping
and stock control are carried out efficiently and economically by those
employed in the Store
The stores management is vital in hospitals since uninterrupted supply of
many items are to be ensured at all times
11. Types of Hospital Stores
1. Centralized stores
2. Decentralized stores
Centralized stores concept is to store all items at a central place and
control materials movement from this central place
Decentralization concept is moving the material to the respective
consumer function or directly to the points of use
12. Features of centralized stores
1. Effective supervision and control
2. Issue at single point reduces cost of issue
3. Reduced personnel requirement
4. Efficient layout for stores
5. Better handling technology
6. Better inventory checks
7. Maintenance of optimum stores
8. Elaborate documentation
13. Advantages of centralized store-
1. The variety of goods can be supplied to all users from one small location
2. Less manpower will be required
3. Better control of materials is possible
4. Material handling will be easy
5. Wastage and deterioration of materials will be less
Disadvantages of centralized store-
1. It may not be suitable for large manufacturing concern
2. More staff will be required for shifting & transportation of the materials to
various production units
3. Record keeping is difficult
14. Features of decentralized stores organization-
1. Reduced handling
2. Customer friendly
3. Fewer production stoppages
4. Visual management is easier
15. Advantages of decentralized stores-
1. Reduced material handling and associated cost
2. Less chances of bottlenecks and delays
3. Convenient for every department to draw materials
4. Less transportation time
Disadvantages of decentralized stores-
1. Coordination and control of all decentralise store is a challenge to management
2. Labour utilization may suffer due to low store activity level
16. Types of Hospital Stores cont…
1. Non - expandable equipments (Depreciable)
2. Expandable equipments (Non-depreciable)
Non - expandable equipments (Depreciable)-
The Equipments that have a life of > 5 yrs. are k/a Non-Expendable
equipments
These equipments are not purchased through construction contracts
These large items of furniture and equipments have a reasonable fixed
location in the hospital building but are capable of being moved
17. 1. Surgical Apparatuses
2. Diagnostic & Therapeutic Equipment
3. Lab & pharmacy Equipment .
4. Office Equipment
I. Typewriter, Intercoms
II. Computers/Electronic exchanges
5. General use surgicals
I. Refrigerator
II. Physiotherapy equipments
III. Suction machines
18. 6. Diagnostic and Therapeutic Equipments, like
I. X-Ray machine
II. Cutlery, ECG machine
III. Respirators, Incubators
IV. Monitoring Equipments
V. Ultra sound machine
VI. Respirators
19. Expendable (Nondepreciable)
Equipment
These Equipments have life span < 5 yrs.
Recurring in use & low cost equipments.
These equipments are purchased through other than construction contracts.
Examples are
I. Kitchen utensils
II. Chinaware
III. Table ware
IV. Surgical instruments
V. Catheters
VI. Linen, sheets, Blankets
VII. Lamps, Waste bins etc.
20. Control Of Stores
It involves receiving of materials, storing them properly & issuing them to
different users against the duly authorised stores requisition.
1. Closed System:
All material are physically stored in a closed & controlled area to exercise
physical control of stores item by keeping them under lock & key
None other than the concerned store personnel are permitted to the store
Material are received and issued from the store only after producing
authorised documents
This type of system is being followed in Hospital and is designed to afford
max. physical security to stores
21. Control Of Stores
2. Open System:
This system is used in industries where there is high, repetitive, mass
production and type of operation requires continuous demand for the same
materials
No store room exists
Store are received & kept as close to the point of user area as is physically
possible
22. Planning of Hospital Stores
Hospital stores may be planned a/c to the nature of stores
1. Medical & Drug Stores: emergency drug, general drugs, special drugs, medical
gases, chemicals and so on.
2. Surgical Stores: bandages, gauzes, sutures, instruments, equipment, rubber
goods, glass items, cotton and general surgical items.
3. General Stores: cleansing materials like soaps & detergents, enamel wares,
ward/ general furniture, small electric items
4. Linen Store: textiles, synthetic fabric, woollen articles & furnishings
5. Stationery Stores: medical forms & papers for med. Documentation
6. Dietary Stores: raw mat. Like vegetables, fruits, dry rations
7. Engineering & Maintenance: spare parts of civil, electrical, mechanical &
electronic items
23. Location of Stores
s/b such that:
Easily accessible to all the user dept.
Receipt & issue of material within least possible time
Cost of transportation is economical
Materials are saved from the Pilferage, Theft & Fire
Ensure strict control over the movement of stock
Unnecessary fatigue & monotony of staff is avoided
s/b scope for future expansion of the store
Due consideration s/b given to temp., humidity & lighting arrangement
24. Layout of Stores
A good stores layout is one which usually brings the point of origin, store-room
and point of use in adjacent and proper sequence for best flow of material
Two imp. factors in layout are economy & efficiency
Essentials of store design;
• Max. utilisation of available space
• Greater efficiency of the store depot
• Easy accessibility to all materials
• Max. security of all materials
• Proper maintenance of records
• Greater economy & use of lesser time in receipt, movement, placement
& issue of material
• Min. spoilage, damage & other losses
25. Layout of Stores
Points must be considered while planning the layout of stores:
• Rows of shelves s/b parallel to the longest dim. of the wall
• Flow pattern s/b optimised through the use of straight path
• Dead end s/b avoided
• Width of aisles s/b approx. one n half times the width of material
handling equipment
• Lighting s/b adequate
• Heating & air conditioning ma have significant effect on perishable &
sterile items
26. Forms for Layout Design
1. Straight – Through Flow:
Simplest form
Goods enter through one door, are stacked in straight row, picked, moved
in one direction along the length of the storehouse and move out through
an exit
27. Forms for Layout Design
2. Element Based:
Stores are kept either on their consumability i.e. fast moving, medium
moving or slow moving or other characteristics, e.g. long life/ short life or
expandable/ non-expandable or requiring special temp. e.g. cool/ cold room
28. Objectives of Store Management
1. To receive the materials ordered by the purchase department (in case of
Decentralised system) and supplied by the vendors in a proper maintains
as per the laid down procedure
2. To ensure the correctness in the quality, quantity, specifications,
condition of the materials received from vendors
3. To stock the materials received from vendors properly as to ensure easy
access identification, verification, handling, maintenance etc.
4. To ensure proper stocking of materials by using appropriate method of
care and preservation to avoid any damage and loss
5. To ensure adequate stock of required medicines/ consumables for a
continuous supply
6. To avoid surplus
29. Objectives cont.….
7. To ensure easy retrievability of items
8. To ensure proper distribution to the point of usage whenever required
9. To ensure effective & efficient utilization of available resources
10.To ensure a favourable working atmosphere is maintained for the
personnel working in the store
11. To ensure proper safety measures are taken for the safety of the store
building, materials in the store and the men working in the store
12. To ensure that the store is always maintained up to date in all respects in
a presentable condition
30. Policy of Storehouse
Only authorized persons shall have access to the Store House
Store house shall not be kept open unattended during working hours
All materials will be issued on First-in-First Out (FIFO) basis
All materials will be received at the store house and person / department concerned will
be notified promptly on receipt
All materials should be stacked properly
All materials approved after inspection shall be stored in the designated locations
Hazardous materials are to be stored separately
All materials rejected shall be kept at a designated place and arrangements for their
disposal made on the advice of concern purchasing official
Expensive items & Narcotics should be stored in lock & key
A Gate pass should be made for taking out materials and should be signed only by
authorized persons
31. Committees for Store Management
in Hospitals
Essentials of committee formulation-
1. Purpose
2. Function
3. Organisation
4. Selection of leader
5. Selection of members
6. Committee recommendations
32. Various committees
1. Pharmacy Committee
2. Drug selection Committee
3. Drug formulary Committee
4. Surgical selection Committee
5. General store selection Committee
6. Specification Committee
7. Negotiation Committee
8. Store purchase Committee
9. Inspection Committee
10.Audit Committee
33. Functions of Hospital Store
1. Demand forecasting & Planning
2. Procurement
3. Receive material as ordered
4. Inspection of materials
5. Record keeping
6. Storage & preservation (Inventory Control)
7. Issue of materials against authorised indents
8. To pass the bills of the materials received from vendor and send it to Accounts
department for payment
9. To carry out periodical condemnation board for the unserviceable materials
10. To take action for disposal of scraps materials as per the procedure
11. To maintain all the documents up to date
12. Generate reports and submit to concerted authorities
13. To attend audit by the auditors
34. Functions of Hospital Store cont…
14. Store Accounting
15. Stock- taking
16. Submission of management information reports
35. Demand forecasting & planning
Forecasting is the method of estimating demand b/o time series analysis
of past while anticipating the future
Following points to be considered while forecasting:
• Trend in consumption pattern during last 2-3 years
• Objectives of the hospital
• Morbidity pattern of the community
• Cyclic changes in epidemiological occurrence of disease
• Resources constraint
• Existing stock position
36. Indenting Of Stores
INDENT:
Basically a request document raised by employee of an organisation/
Dept. to purchasing authority asking for materials needed which are
present in the store.
Each indent s/b prepared in triplicate, one kept in the dept. and two sent to
the purchase dept.
Indents
ANNUAL SUPPLEMENTARY EMERGENT
37. ANNUAL INDENTS
It is the forecast of requirements for the coming financial year
Following points s/b considered while preparing it:
I. Existing stock position
II. Last one year’s av. Consumption (mean of last 03 years)
III. Quantities required for the next year
IV. Should give complete specification of the item
V. Approx. cost should not exceed the financial allocation of the dept.
VI. s/b submitted by 1st Jan each year for ensuring financial year
VII. There s/b separate indents for consumable & non- consumable stores
38. Supplementary Indents
Ideally – no SI
If needed, s/b submitted separately by 1st August of the year
with justification that items included therein couldn’t be foreseen at the
time of submission of the annual indent and are urgently needed during
the year
Limit of financial allocation for the year should not be exceeded
39. Emergent Indent
Should only be restored to when the demand is of immediate, inescapable
nature and funds of the dept. allocation are available
All demands s/b signed by the Officer Incharge of the dept. concerned
before forwarding to the purchase dept.
May be submitted at any time of the year with approval of the Competent
Authority
40. Indenting Groups
In a h/c org. the items in each indent may be grouped as below:
Surgical instruments & equipment
Med. Stores/ Chemicals/ Stain & Dyes
Linen
Stationery store items
Diet items
Rubber goods
Glass wares
Optical instruments & equipment
Photographic mat.
Furniture- wooden/ steel
General store items
Miscellaneous items
41. Procurement
It implies the act of exchange of goods and services for money
Basic principles of purchasing are 9R to ensure the-
1. Right Material of
2. Right Quality and
3. Right Quantity at
4. Right Price received from
5. Right source at
6. Right Time and supplied to
7. Right User in
8. Right Scheduled and payment to vendor in
9. Right committed time
42. Modes of Procurement
i) Open Tenders
a) Open Tender Enquiry (OTE); and
b) Global Tender Enquiry (GTE)
ii) Procurement through Selected Suppliers
a) Limited Tender Enquiry - LTE (up to Rs. 25 (Rupees Twenty-Five) lakh); and
b) Special Limited Tender Enquiry (SLTE above Rs. 25 (Rupees Twenty-Five) lakh under special circumstances)
iii) Nomination Basis Tenders
a) Proprietary Article Certificate (PAC); and
b) Single Tender Enquiry (STE) without PAC
iv) Procurements without Calling Tenders
a) Withdrawals against Rate Contracts (RC);
b) Direct Procurement without Quotation;
c) Direct Procurement by Purchase Committee;
d) Purchases through Central Purchase Organisation (DGS&D) or other such agencies
v) Mandatory Procurement of Goods and Services for Goods or Services available on GeM
43. Procurement Procedure
1
• Develop clear complete description
2
• Determine important commercial requirements, performance & eligibility criteria
3
• Invite Bids allowing reasonable time for response from suppliers
4
• Open tenders
5
• Evaluate Tenders
6
• Assess capacity of new supplier
44. 7 • Visit the manufacturer’s premises (if needed)
8 • Select suppliers
9 • Award contracts
10 • Follow up the contracts
11 • Check the stores at consignee’s end
12 • Release initial payment
13 • Check satisfactory performance
14 • Release balance payment
15 • Evaluate performance for future transaction
Procurement Procedure cont…
45. Receiving, Inspecting
& Inwarding
Stores Personnel shall inward materials after ensuring the following:
Supplier’ s Delivery Challan (DC) / Invoice bears the inward stamp
Supplier s Delivery Challan / Invoice bears the reference of purchase order
In case of consignment received with out any documents or any discrepancy
noticed in the documents received, Purchase official will be notified immediately
for obtaining necessary information for inwarding
Acknowledgement of receipt of consignments is subject to final check and
approval. A notation, to this effect must be stamped on each copy of Delivery
Challan/ Lorry Receipt/Invoice as given below:-
‘Goods received subject to verification and approval’
- I/c Medical Stores
Materials shall be received on all working days only during working hours
46. Receiving, Inspecting
& Inwarding cont.…
All apparent damages/leakages/broken seal in the consignment received
are immediately recorded in the DC/LR/Invoice and bring the same to the
attention of concerned authority
Verify the identity of the material received
Ensure description of the material given in the consignment and number of
containers / packages received as per the DC / LR / Invoice
100% verification by way of counting, measuring & weighing must be done
All materials received will be taken on Ledger Charge through means of a
Receipt Voucher
The Stores Personnel shall inward the materials within 24 hours of receipt
by way of preparing the Receipt Voucher and sign at the relevant places
47. Storage
The term storage refers to the physical act of storing the materials in a
Storehouse on pallets, shelves, racks, boxes, almirah, etc.
Storage plan is made keeping in mind-
1. Nature of the product- physical state, toxicity, inflammability and other hazards
2. Volume and weight- heavy or light
3. Movement frequency- fast moving or slow moving
4. Point of use
Objectives are:
Maximum utilization of space consistent with adequate care and protection of
materials
The storage system has to be such as to enable accurate identification of the
materials stored
48. Storage…..
Ease of storing and picking, thus enabling speedy operations
All materials must be protected from temperature, moisture, pilferage,
insects, rodents etc.
A very important principle in store keeping is FIFO or First-in-First-out
Most materials have a shelf life and this is specially so the oldest stock has
to be issued first
Environmental Conditions with in the storehouse should be conducive in
terms of lighting, temperature, ventilation, access to the racks, trade wise
stacking
51. Inventory Control
INVENTORY-
“The quantity of goods or materials in hands”
- Webster
It includes raw material, work-in-process, finished goods & stores & spares
It is the sum total and costs of all supplies official and non official, where
ever they may be stored and that have not yet been used
52. Inventory Control
It is a tool of management which is used to maintain an economic
minimum investment in materials and products for the purpose of obtaining
a maximum financial return
OR
It is a management technique of keeping the inventory minimum to
avoid the blockage of money but at same time there should not be
deficiency of materials
53. Objective
To reduce the financial investment in inventories
To minimize idle time by avoiding stock outs and shortages
To avoid losses from inventory obsolescence
To improve quality of care
54. Principle of inventory control
Items for which annual consumption is high ,orders placed frequently so
that the inventory level is as low as possible
-For items whose annual consumption is not high, sufficient stocks are
maintained and orders are placed less frequently
55. Techniques of Inventory Control
1. Economic Order Quantity (EOQ)
2. Selective Inventory Control (ABC, VED, FSN, HML, MUSIC-3D)
3. Ordering System
4. Safety Stock
5. Standardization & Codification
6. Value Analysis
56. Important Terminology
Lead Time -Time taken in between acquiring the material in hand and
placing the order
Internal Lead Time
External Lead Time
Safety/Buffer /Reserve stock
-This quantity should be used at the time of Emergency for unforeseen
demand.
-Set apart as a safeguard against the variation in demand and procurement
period
Safety Stock = (Cm-Ca) * L.T.
57. Reorder Level-The level of inventory at which next order is to be placed
-Safety stock + expected consumption during lead time
R.L.= Average consumption per day *Lead Time + Buffer Stock
58.
59. Economic Order Quantity (EOQ)
EOQ or Fixed Order Quantity system is the technique of ordering materials
whenever stock reaches the reorder point
Economic order quality deals when the cost of procurement and handling
of inventory are at optimum level and total cost is minimum
There should be no over stock or under stock balance should be made
between the cost of carrying and the cost of not carrying that is cost of
carry out
60. EOQ = 2AS
IC
A = Expected annual usage (annual demand)
S = Procurement cost per order
I = Inventory carrying cost per year
C = Unit cost of required item
61.
62. Assumptions of EOQ
Demand for the product is constant
Lead time is constant
Price per unit is constant
Inventory carrying cost is based on average inventory
Ordering costs are constant per order
All demands for the product will be satisfied (no back orders)
63. Weaknesses of EOQ formula
Erratic usages
Faulty basic information
Costly calculations
No formula is substitute for commonsense
EOQ ordering must be tempered with judgment
64. Inventory Carrying Costs
Costs incurred for holding the volume of inventory and
measured as a percentage of unit cost of an item.
It includes-
Capital cost
Obsolescence cost
Deterioration cost
Taxes on inventory
Insurance cost
Storage & handling cost
65. Out-of-Stock Costs
It is the loss which occurs or which may occur due to non availability of
material
It includes-
Break down/delay in production
Back ordering
Lost sales
Loss of service to customers, loss of goodwill, loss due to lagging behind the
competitors, etc
66. Other Costs
Capacity Costs
-Over-time payments
-Lay-offs & idle time
Set-up Costs
-Machine set-up
-Start-up scrap generated from getting a production run started
Over-stocking Costs
67. Classification of
Inventory Control
Always Better Control (ABC) Analysis
This technique divides inventory into three categories A, B & C based on
their annual consumption value
It is also known as Selective Inventory Control Method (SIM)
This method is a means of categorizing inventory items according to the
potential amount to be controlled
ABC analysis has universal application for fields requiring selective control
68. Procedure for ABC Analysis
Make the list of all items of inventory
Determine the annual volume of usage & money value of each item
Multiply each item’s annual volume by its rupee value
Compute each item’s percentage of the total inventory in terms of annual
usage in rupees
The next 70% of all items with the lowest rupee percentages are “C” items
Select the top 10% of all items which have the highest rupee percentages
& classify them as “A” items
Select the next 20% of all items with the next highest rupee percentages &
designate them “B” items
70. Advantages of ABC Analysis
Helps to exercise selective control
Gives rewarding results quickly
Helps to point out obsolete stocks easily
In case of “A” items careful attention can be paid at every step such as
estimate of requirements, purchase, safety stock, receipts, inspections,
issues, etc. & close control is maintained
In case of “C” items, recording & follow up, etc. may be dispensed with or
combined
Helps better planning of inventory control
Provides sound basis for allocation of funds & human resources
71. Disadvantages of ABC Analysis
Proper standardization & codification of inventory items needed
Considers only money value of items & neglects the importance of items
for the production process or assembly or functioning
Periodic review becomes difficult if only ABC analysis is recalled
When other important factors make it obligatory to concentrate on “C”
items more, the purpose of ABC analysis is defeated
72. VED Classification
VED: Vital, Essential & Desirable classification
VED classification is based on the criticality of the inventories
V- Item without which the activity will come to the halt
E- Items which are likely to cause disruption of the normal activity
D- In the absence of which the hospital work does not get hampered
Vital items – Its shortage may cause havoc & stop the work in
organization.
They are stocked adequately to ensure smooth operation
73. VED continue…..
Essential items - Here, reasonable risk can be taken. If not available, the
plant does not stop; but the efficiency of operations is adversely affected
due to expediting expenses.
They should be sufficiently stocked to ensure regular flow of work
Desirable items – Its non availability does not stop the work because they
can be easily purchased from the market as & when needed.
They may be stocked very low or not stocked
74. VED continue…..
It is useful in capital intensive industries, transport industries, etc.
VED analysis can be better used with ABC analysis in the following
pattern:
Category I- Needs close monitoring & Control
Category II-Moderate Control
Category III-No need for Control
75. V E D Items Cost
A AV AE AD Category I 10 70%
B BV BE BD Category II 20 20%
C CV CE CD Category III 70 10%
77. F-S-N Classification
Takes into account distribution handling pattern of items from store
Quantity & rates of consumption are analyzed to classify the items
• Fast moving(F)
• Slow Moving(S)
• Non moving(N)
Classification is based on the pattern of issues from stores & is
useful in controlling obsolescence
78. FSM Continue……
Date of receipt or last date of issue, whichever is later, is taken
to determine the no. of months which have lapsed since the last
transaction
The items are usually grouped in periods of 12 months
It helps to avoid investments in non moving or slow items. It is
also useful in facilitating timely control
80. Reorder quantity method
The quantity of items to be order so as continue production
without any interruption in future
Methods:
1) Fixed quantity method:-when the stock level drops to a pre-
determined point know as reorder level, then the order is
placed.
Calculated using E O Q formula.
Reorder level quantity = Safety stock +(usage rate x lead time)
81. FOQSy. Continue……………
Open access bin system:-
The bin is filled with items to the maximum level as and when
required
Open bins with items are kept at places nearer to the production
line
The operators use items without making a record
The system is usually restricted to C-items.
82. Two –bin system:-
Two bins are filled with items at different levels, when the first
one is exhausted, it indicates the time for reorder
The 2nd one is a reserve stock during lead-time period
83. Advantages of 2 Bin System
Material can be procured in the most economical quantity
Purchase and inventory control personnel automatically devote attention to
the items they need only when required
Positive control can easily be exerted to maintain total inventory
investment at the desired level simply by estimated planned maximum and
minimum values
85. Retrieval
Easy and quick retrievability of items that are demanded by the internal
customers
Easy identification, maximum space utilization and minimum handling are
key factors to retrieval functions
86. Issue
Fulfilling customer demand for the item in minimum time, keeping quality
high and cost minimum is issue
An internal customer doesn’t pay the price but he has to fulfil requirement
of authorization for the demand
The usual method of issue is by a Material Indent Form, or Materials
Requisition, which has to be signed by the indenter
Only items taken on ledger charge shall be issued
and will be written off from ledger
87. Records
Maintaining records of receipt and issue
Updating the stock levels as per movement of materials
Basic records of store are bin card and stock register-
1. Bin card is placed on the bin in which items are stored. This gives
information about receipt, issue and balance
2. Stock register gives all the information in the bin card and also the value
88. Surplus Management
Effective disposal system for unneeded material to reduce inventory cost
and proactive measures to eliminate deterioration and obsolescence
Obsolete items are good in all respect but have no useful role in the
company due to changes that have occurred in the course of time
Surplus items are those that have accumulated due to faulty planning,
forecasting and purchasing
89. Interaction & Coordination
Very close interaction between Purchasing, production, quality control and
engineering functions is obviously needed in the discharge of the functions
discussed so far
It also becomes necessary to coordinate with the flow of material samples
and information through a network of departments for performance of
stores functions
90. Return of Rejected Materials
Rejections should be handled promptly and with good judgment
The responsibility for return of rejected materials lies with the Store Keeper
and the Inspecting persons
When material rejection occurs, immediate action must be taken to return,
replace and / or dispose of the rejections
91. Stores Accounting
Need for stores accounting:
Stores accounting has two aspects, the value of the materials stored and the
physical quantity of the materials stored
importance:
The stocks represent assets of the organization and as such it is necessary to
include their value in the accounts of the organization.
It provides a means of costing of an item used.
It provides a basis for inventory control by value.
As for the second aspect, it is necessary all the time to ensure that all the
materials that have been received have been accounted for
All receipts and all issues have to be entered in stock ledgers or registers and
have to be accounted for
Maintenance of Ledgers will be done
92. Safety of Stores
The term Safety encompasses the safety of the materials, facilities used, and the
safety of the personnel working in a Storehouse.
Main causes of accidents in a Store are given below:-
1. Materials falling from racks.
2. Wires, unwanted ropes, steel rods or empty cartons kept carelessly on
walkways.
3. Injury arising from lifting very heavy loads, or normal loads unscientifically.
4. Collisions with bins.
5. Falling while climbing to reach the upper shelves.
6. Injury to hands resulting from lifting or handling of materials.
7. Slipping on oil, grease or even water spillages.
93. Safety of Stores cont….
8. Injury caused by nails left on empty cases and battens of boxes.
9. Injury from corrosive acids.
10. Dropping goods on one’s feet without protective boots.
11. Poor facilities like poor lighting, wobbly ladders or racks, badly laid out
bins Good supervision in the matter of observance of safety rules cannot be
overstressed
Stores personnel should educate, encourage and advise workers to
change their attitudes and give the highest priority for good house keeping.
94. Fire Prevention
It is necessary to take every precaution against fire and ensure that all fire
regulations are strictly observed by all the staff
fire extinguisher
Water reservoir, generator and fire fighting pumps in a very big store
Periodic fire drills
Stores personnel should also be trained in fire fighting and specific
responsibilities given
95. Security of Stores
Security in all Stores should be properly planned and organized
Doors s/b strong and provided with good locks and
windows s/b provided with iron grills or wire mesh
The internal layout is arranged in such a way that there is a spacious issue
counter where people can obtain materials without entering the storehouse
Stockyards should be enclosed with fencing which is adequately high
For extra protection there could be a barbed wire fence along the top of a
brick wall
Entry into Store Premises: No one except the authorized staff should be
allowed access into the stores.
96. Security of Stores cont…
Custody of keys: All keys of storehouse and stockyards should be numbered and
specific persons must be made responsible for them
During off-duty hours these keys are to be kept in a locked almirah at a
convenient place (Recommended place is of Security office)
When collecting or depositing a bunch of keys, entries should be made in a
register and duly signed
Only authorized persons shall be allowed for handling of keys concerned to their
departments
The number of duplicate keys should be restricted
In case where a key lost, a full enquiry should be held and the lock changed, and
not a duplicate key made
In this regard a master list of keys with numbers (Permanent/Temporary) should
be maintained.
97. Security of Stores cont…
Housekeeping: Good housekeeping is one of the major responsibilities of every
Stores Supervisor
Neat and orderly premises are not only a morale booster but also an important
element in accident prevention
Loss of Stores: Any loss of stores shall immediately be reported to the a disc
institutional head. When the person responsible for such loss is unable to explain
rampancy, Loss statement will be prepared and will be submitted to concerned
authority
After the approval of the Loss Statement, write-off should be done and stock
records adjusted accordingly
Tally Cards / Bin Cards: These should be kept up dated and hung/placed suitably
on the racks/almirah /stacks
98. Auditing
“Auditing is a systemic & independent examination of data statements,
records, operation & performance of an enterprise for its stated purpose in
any auditing situation. The auditor preserves & recognizes them proposition
before him for examination collects evidence, evaluate same formulation is a
judgment which is communicated through his audit report.”
- ICAI
Purpose:
To prevent frauds & errors
To maintain accuracy & clear documents
To maintain clear record about stores position & status.
Clear record for issue & purchase
Requirement of material & purchase department.
Acting as an evidence for supplied & inspection department.
99. Auditing
Stores Auditing:
Stores auditing is a process of verification, valuation & formulating the stores recorded
translation is a systemic manner here the auditor verifies stock returns issued purchase
records, bills of materials etc. by finishing this statement the auditor given a report.
Injectable and life saving drugs at Medical stores depot level should normally be accepted
only after testing. At the hospital level where requirements may be urgent, the item may
be accepted on the post lab test basis or under a guarantee/warranty certificate.
The following points are to be kept in mind while auditing the drugs:
The supplies are as per specification quoted in supply order
Packing schedules are as specified in supply order and challan
Shelf life of items should be adequate
The supplies have been made within the date of delivery (D.O.D)
The supplies and containers have been stamped
100. Auditing
In case of non-expendable items, inspection should be carried out with
reference to the specification/catalogue/approved samples or sealed
samples in stock/sample rooms
All items found in order should immediately be entered on the inspection
note, and adjustment of items should be completed promptly after that
Items are not approved should be rejected after recording adequate
reasons for such rejections. Necessary action for replacement and lifting of
the rejected stores by the firm should be taken
101. Stock verification
The process of physical conditioning, weighting or measuring the stock of
material. Ex. Health care service materials.
Needs / purpose/ benefits / advantages of stock verification:
To verify the stock physically against them quantity shown in the ledges
To identify which repair and control
To disclose the possibility of fraud, theft, loss etc.,
As a necessary against spoilage, damage, obsolescence & error
Verification Report:
should be examined by the purchase officer and submitted to the Head of
the institution/hospital with his remarks and recommendations for his orders.
102. Methods of Stock Verification
1. Annual Inventory Method:
In this method verification is usually done at the close of the financial year.
Verification should be completed within 2 weeks and report submitted to
the Head of the institution
2. The Continuous Method:
The inventories are divided into twelve equal parts and one part checked
every month
This method has the advantage that the store room operations are not
required to be shut down during the stock verification
103. Steps / procedure of
stock verification
Identifying the member, location and sub stores
↓
Sealing stores and sub stores
↓
Double with seal after physical verification over
↓
No issue or receipt during verification
↓
Complete the ledger postings and entries
↓
Unexplained signature, discrepancy should be noted
↓
Findings and suggestion of the committee
104. Theft/Pilferage/Malpractice
‘Theft or misleading of goods & spare by the employees or the person related or
unrelated to the organization engaged in taking away the goods in small quantity
without permission or knowledge of officials who are responsible for the
organization or department’
Preventive measures:
Packing of drugs
Stamping of containers
Physical verification of stores
Strict accounting system for costly products
Internal audit of stores
Computerisation of stores
Stockless inventory
105. Theft/Pilferage/Malpractice cont…
Proper Record keeping
On the spot inspection
Issue of inspection note
Adoption of latest technology
Control of errors
Proper storage
Close assessment of personnel’s
Proper security
Systemic layout & location
Fixed working hours
Key handling & deposition