Materials required for manufacturing process to run are received

from various sources from outside which are verified and

accounted for in the Stores.

Different modes of receipt :

Materials required are received from various sources through

various modes of transportation. The major mode of transportation
are Rail and Road. Other than this the materials are received
through air, sea , courier, registered post or by hand also (Door
delivery).

By Rail:

The bulky material required in huge quantity like Raw materials

are received by Rail in rake load. A rake is the multiple number of
wagons received together. In such cases the whole rake is received
inside the plants and the wagons are returned back to railways
after unloading. When the quantity received is less than a rake
load, materials are received in wagons which are transferred inside
the plant by the Railways and empty wagons are returned to
railways after unloading. The consignments received in rake load
or wagon load are accompanied by the carriers( Railways)
document called Railway receipt (RR). The wagons / rakes are to
be unloaded within the stipulated time limit given by the Railways
known as Free Time. For any delay in releasing the wagons
beyond the free time Railways charge extra amount based on the
extra time the wagons are held, known as Demurrage.
Material less than a wagon load are received in smaller
consignments also known as Smalls. The railway documents
accompanying such small consignment is also know as Parcel
Way Bill (PWB). These small consignments/ Parcels are received
from the railways from their godown within the stipulated time.
For any delay in collection of such material from Railway godown
Railways charge extra amount known as warfage.

By Road:

The materials are also received through the Road transportation by

trucks. The
material received by truck are accompanied by a transporters
document know as consignment note. Depending on the terms of
the Purchase Orders, the material by road are received in the Plant
Stores or in the transporters local godown in which case Stores
collects the material from the transportation godown.
The materials sourced from the foreign countries are received by
Ship or through Air Carrier up to the nearest Sea port/ Airport
respectively which is further transported to Plants by Road.

Verification of Consignments :

When the materials are received by Rail the wagons received are
verified for any pilferage / shortage and also weighed for
ascertaining the receipt of correct quantity. Any discrepancy in the
quantity found or the damages observed is recorded on the RR /
PWB. A Railway claim is lodged against this discrepancy. This
Railway claims become a prerequisite for lodging insurance claim
with underwriters.
The material received through trucks are verified at the point of
receipt for the correctness against our Purchase order and the
suppliers challan and outward damages or shortages in quantity if
any. If any shortage or outward damage in the received
material/consignment is observed the remarks is made on the
transporters document and a carrier claim is lodged.
Acknowledgement for the receipt of consignment/material was
given on the transporters document like consignment note or on
the delivery challan of the firm.

Receipt, Accounting & Documentation :

Once the consignments/materials are received in the Stores from

the transporters/railways, actual quantity received & the condition
of the material received are further checked in detail after
unpacking the packages and matching the quantities with the
suppliers delivery challan and the Purchase orders. Weighment is
resorted to wherever the weight is to be ascertained.
The correctness/completeness and the quality of material received
is checked as per the terms of Purchase Orders. Then the
document for receipt accounting is prepared which is known as
Goods receipt note (GRN) or Stores Receipt Voucher (SRV).
GRN/ SRV is the document through which the received materials
are taken on charge in the plant, also the document which
communicates the acceptance/rejection of the material supplied
and a document enabling the payment to the supplier against the
supply.

Direct delivery to users or central storages :

The materials against the various Purchase Orders are generally

received centrally by stores and stored after verification and
accounting. However in case of certain items where there is no
central facility of storage in the Stores the material is directly
transferred to the storage facility available with the user
departments. After ascertaining the quantity and the quality of
such materials received at the user departments and their
certification the material receipt is accounted for by raising
GRN/SRV.

Excise documentation :

Against most of the materials we procure from the suppliers we

reimburse excise duty/Central VAT (CenVAT) and State VAT
(Value added tax) paid by the suppliers. The corresponding
CenVAT gatepass VAT document is sent by the supplier along
with the materials. For the materials used in the direct production
or enabling production, we get CenVAT/ VAT credit benefit from
the concerned Government. For claiming this CenVAT/ VAT
benefit from the Govt. Authority the CenVat document (Excise
Gate pass) and Vat documents received along with the
consignment are required. Therefore the receipt of these
documents are particularly ensured and transferred to Accounts in
time to claim the CenVAT/ VAT credit. In case of not reciving
these documents the same is recorded on the suppliers challan &
the supplier is not reimbursed these charges as per Purchase Order
stipulations.

Lead time of Receipt accounting :

The material received from various sources are verified and

accounted
for in the Stores only after which the materials can be made available for the use by the user
department and the payment to the supplier can be made or regularised. So, the timely
accounting of the receipt of the material is very important.. The time taken in accounting &
taking the material on charge from the time it is received in Stores is known as Lead time of
Receipt accounting or GRN/SRV lead time . Every plant tries to make this GRN/SRV lead
time as minimum as possible to ensure timely accountal of material, availability of received
material for use and the timely payment/ regularization of payment to the suppliers.
Issue of Materials: Basic Requirement and Methods | Materials Management

Read this article to learn about Issuing Materials:- 1. Basic Requirement of Issue of
Materials 2. Methods of Issue of Materials.
Issue of Materials # Basic Requirement:
Since large sums of money remain blocked in materials, it is essential for the custodian of
materials to ensure that the issue of materials are made only under proper authorisation.

In fact, authorisation of stores is very vital.

Moreover, for efficient operation, the following points to be considered:

ADVERTISEMENTS:

(a) Authorisation of issues

(b) Identification of requirements

(c) Timing of issues.

(a) Authorisation of Issues:

ADVERTISEMENTS:

Since materials represents money, for the issue of materials there must be some authorisation by

responsible officers nominated by the management. Such authorisation should be given clearly in
the form of a directive circular.

The object is to avoid misunderstanding and unpleasantness that may arise due to the refusal by

the storekeeper to issue materials. In many industries, the designation of the person authorised to
draw materials along with their specimen signature are sent to the stores for verification.
The request for issue of materials is invariably made in written form or documents for proper

authorisation. It is the primary responsibility of the storekeeper to verify all such documents for
proper authorisation before the materials are issued.

Even though certain persons are authorised to draw goods from the stores, management normally

imposes a few restrictions for drawal of the goods beyond a certain level of consumption. In all
such cases, a clear directive must be given to the stores department.

ADVERTISEMENTS:

(b) Identification of Requirement:

Largely due to ignorance, in several cases the correct description of the items is not given by the

user department. Often the code number given may not tally with the description of the goods,

and vice versa. Hence an experienced store-keeper should use his intelligence to identify the
mistake and suggest to the indenter the correct item.

Details about materials requirements such as part number, code number, etc. ensure that it is
supplied without delay and unnecessary correspondence.

ADVERTISEMENTS:

(c) Timing of Issue:

The stores manager should ensure that the indenting departments are fully aware of the timing of

issues. However, there may be sudden rush during the peak hours. This may put undue pressure
on the stores department and may lead to sudden stoppage of production, in case of undue delay.

So our intelligent store-keeper should study carefully the requirements of various departments

and stagger (spread) the timings in such a way that each department can draw their requirements
without loss of time.
Issue of Materials # Methods:
Issues from stores must be efficiently organised so that the requirements of the
production/operations department can be met.

1. Issue on request:
This is the most orthodox way of issue wherein the indenting department normally sends a man
and collects the materials from stores.

2. Issue per schedule:

In a batch production unit sometime, the requisition for issue of stores is sent well ahead

indicating when, i.e., the time and date it is required. The stores department will collect all the
materials and keep them ready.

Then it will intimate the indenting department about this. Depending on the prevailing practice

of the industry either they are collected from stores or delivered at the shop floor. This is

desirable in order to prevent any loss of man-hour caused by sudden absenteeism of a worker in
the production department.

3. Imprest issues:
In this system a list of certain items especially for tools and components and in specified
quantities is approved. The list is then held in a sub-store or tool kit near the shop floor.

4. Replacement issue:
In most engineering industries a large number of workshop machines are used. So there will be

considerable requirements of tools and gauges. When a fresh issue has to be made the machine

shop operator may be asked to return the old ones to the stores and obtain new one for

replacement. This is done without issue notes and the storekeeper has to maintain proper records
of such replacement.
5. Loan issues:
The issue of stores on loan should, as far as possible, be discouraged. Situations often arise

where some amount of spares; electrical fitting, etc. are required on emergency basis due to some

breakdowns. In such cases the materials are to be issued on a loan basis. However, the

storekeeper is to maintain a separate record and ensure that they are returned before year-ending
when annual stock-taking begins.

6. Stock records:
In a store-house where thousands of transactions take place some amount of records are to
maintained. This makes it possible for the storekeeper to make an entry of all transactions.