Improving Performance of Store Management:

A Case Study of Dhaka Electric Supply

Company Ltd. (DESCO)

A Dissertation by
Rashed Morshed MCIPS
Batch: Fall, 2012
Program: MPSM
Student ID No: 12282001

Submitted to
Institute of Governance Studies
BRAC University, Dhaka

In partial fulfilment of the requirement for the degree of

Master in Procurement and Supply Management

Institute of Governance Studies

BRAC University Dhaka, Bangladesh
December 2011
 Dedicated to

My Loving Parents who supported me all the

way

My Wife whose constant dedication and love

enlightened me

My Supervisor whose guidance was a source

of inspiration

All of my friends and colleagues who stood

beside me with great commitment

ii
 Declaration

I hereby declare that I‘m the sole author of this thesis.

I confirm that this report has not been accepted for any degree and
is not currently submitted in candidature of any degree.

I authorize the Institute of Governance Studies (IGS) and BRAC

University to lend this thesis to other institutions or individuals for
the purpose of scholarly research only.

I further authorize the IGS and BRAC University to reproduce this

thesis by photocopying or by other means, in total or in part, at the
request of other institutions for the purpose of scholarly research.

Rashed Morshed MCIPS

Batch: Fall, 2012
Program: MPSM
Student ID No: 12282001
IGS, BRAC University

iii
 Acknowledgement

On the way of completing this thesis paper successfully I have got some people in favor of me,
without their kind help and generous support it would have been difficult for me to complete
this thesis paper.

First and foremost, I would like to acknowledge my heartiest gratitude and indebtedness to
my supervisor Mujahid Mohiuddin Babu, Lecturer, Institute of Business Administration
(IBA), Dhaka University, Dhaka for his guidance, supervision and help in all stages of
carrying out my work and also in preparation of the manuscript.

I would like to express my sincere thanks and profound gratitude to Dr. Rizwan Khair,
Director, Institute of Governance Studies (IGS) for giving me much of his valuable time in
spite of his busy schedule for reviewing my script very patiently.

I would also like to express my heartfelt thanks to my colleagues of Dhaka Electric Supply
Company Ltd. (DESCO) who helped me on the way of giving their valuable comments,
feedback and suggestions during data collection and interview.

I am thankful to the officers of Central Store of DESCO who have aided me with confidential
and valuable information. Specially, I would like to express my deep sense of gratitude to
Qudrate Khuda, Former Director (Procurement, Finance & Accounts) and Engr. Md.
Rashidur Rahman, Deputy General Manager for giving me continuous support to carry out the
study; otherwise it would have not been possible for me to complete it on time.

Last but not the least, I also express my heartiest thanks and gratefulness to the university
authority, the member of staff, faculty members, class mates for their continued help and
valuable suggestions to complete this thesis paper.

Rashed Morshed MCIPS

Batch: Fall, 2012
Program: MPSM
Student ID No: 12282001
IGS, BRAC University

iv
 ABSTRACT

Creation of Dhaka Electric Supply Company is a part of the reforms being initiated by the
Bangladesh Government to increase efficiency in the area of generation, transmission and
distribution. After its commencement on September 24, 1998 DESCO proved successful and
therefore in the subsequent years of successful operation and performance, the operational
area of DESCO was expanded and the total consumer growth increased. Being the first public
limited company in the energy sector, DESCO is now considered as a profitable company
which is managed efficiently and economically with optimum cost and manpower.
Consequently DESCO Management has to face lots of challenges and threats as well as
opportunities to improve its operational performance.

DESCO‘s stores and spares stand almost two-fifth of the shareholder‘s equity. Again in recent
days, physical storage and distribution has crucial roles to play for the organisation. The role
of the management of stores is concerned with improving both the efficiency and the
effectiveness of the stores function by seeking to eliminate waste from activities that add cost
to the supply chain, while maximising those areas that add value. Before starting of this thesis,
the researcher assumed that Store Management of DESCO has no specific long term vision
and goals in its stores. In addition, the researcher also assumed that existing performance of
Store Management is not that much satisfactory in terms of efficiency and effectiveness in
comparison with the standards of similar industry. In general, this study is expected to helpful
to the policy makers of DESCO to improving the existing performance of Store Management.

The objectives of the study were achieved through three approaches; the first one was a valid
questionnaire that was obtained from respondents‘ of DESCO. The second one is achieved
through studying some practical cases, experienced by Store Management overtime. The third
one is achieved through key informant interviews of store related officers and staffs of
DESCO. A questionnaire was prepared to know the general perception and attitude regarding
Store Management, to determine its objectives and scope, to evaluate the strategic factors
affecting the choice of Store Management, to appraise and evaluate the role and effects of
different stores, to assess Inventory Management, to examine and analyse security in different
stores, to examine health and safety and legal issues involved in Store Management and to
evaluate the use of information and Communication Technology at Central Store.

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After getting the response from the respondents‘ from questionnaire, practical experience and
key informant interview, the study recommends some of the key areas for improvement of
store management. The researcher recommends a number of possible ways in certain
improving areas to DESCO Management like organization and management, personnel
management, store management strategy, stock rotation and control, safety measures, security,
warehouse premises, material handling equipment, dispatch, ICT, disposal of goods,
inspection etc. The researcher believes that if DESCO Management considers and implements
those recommendations in store management then existing performance of store management
would certainly improve.

Store Management is now considered as an inseparable part of all business. If effectively

maintained and organised, Store Management of DESCO could keep safe custody of
materials, their receipts, issues, and accounting with the objective of efficiently and
economically providing the right goods at the right time whenever required in the right
condition to all user departments.

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 TABLE OF CONTENT

Chapter Title Page

Title Page i
Dedication ii
Declaration iii
Acknowledgement iv
Abstract v
Table of Content vii
List of Tables ix
List of Figures x

Chapter-1 INTRODUCTION 1
1.1 Introduction 2
1.2 Objectives 4
1.3 Hypothesis 4
1.4 Justification 5
1.5 Methodology 5
1.6 Limitations of the Research 5
1.7 Chapter Outline 6

Chapter-2 ORGANISATIONAL ORIENTATION 7

2.1 History 8
2.2 The Reform Process 9
2.3 Activities of DESCO 11
2.4 Service Territory of DESCO 11
2.5 Vision & Mission 12
2.6 Growth of the Company 12
2.7 Management 12
2.8 Organisational Structure of DESCO 15
2.9 Structure of Store Management 16

Chapter-3 RESEARCH METHODOLOGY 18

3.1 Introduction 19
3.2 Research Strategy 19
3.3 Research Design 19
3.4 Population 20
3.5 Sample size Determination 21
3.6 Methodology of the thesis 21
3.7 Questionnaire Design 21
3.8 Questionnaire Content 22
3.9 Pilot Study 22
3.10 Data Measurement 23
3.11 Triangulation 24
3.12 Conclusion 24

Chapter-4 LITERAUTRE REVIEWS 25

4.1 Procurement 27
4.2 Procurement Process 27
4.3 Existing best practice of store management 29
4.4 Present store performance at DESCO 44

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Chapter-5 ANALYSIS OF THE RESULTS 51
5.1 Introduction 52
5.2 Characteristics of the Respondents 52
5.3 Respondents views on General Perception and attitude 53
of Store Management
5.4 Respondents views on Objectives and Scope of 54
DESCO‘s Store Management
5.5 Respondents views on evaluating strategic factors 55
5.6 Respondents views on role and effects of different 57
stores of DESCO
5.7 Respondents views on Inventory Management of
DESCO
5.8 Respondents views on Procurement Practice at DESCO 58
5.9 Respondents views on security in different stores of 59
DESCO
5.10 Respondents views on health and safety and legal issues 60
involved in Store Management
5.11 Evaluate the use of information and Communication 61
Technology at Central Store

Chapter-6 CONCLUSION & RECOMMENDATIONS 62

6.1 Introduction 63
6.2 Recommendations 64
6.3 Limitations & Assumptions 78
6.4 Scope of Future Studies 78
6.5 Conclusion 78

Reference 79

Appendix A Bibliography 80
Appendix B Questionnaire Survey 81
Appendix C Analyzed Results 90

viii
 ANNEXURE-A
LIST OF TABLES

Sl. Table Description Page No

No No
01. 2.1 Statistics of consumers in regard to personnel 13
02 2.2 Commercial Highlights 14
03 2.3 Technical Highlights 14
04 4.1 Store Details of DESCO 45
05 4.2 Capital tied up in stores 46
06 4.3 Security Details of DESCO 50
07 5.1 Respondents‘ Profile 52
08 6.1 Annual Procurement Plan for the Financial Year 2012-13 69

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 ANNEXURE-C
LIST OF FIGURES

Sl. Figure
Description Page No
No No
01 2.1 Existing Organogram of DESCO 16
02 2.2 Departmental Organogram of Store Management headed 17
by Procurement
03 3.1 Triangulation Method 24
04 4.1 Purchasing Process 28
05 4.2 Cost of Store Facilities 32
06 4.3 Pareto Analysis 35
07 4.4 The Throughflow System 35
08 4.5 The Inverter T System 36
09 4.6 The Crossflow System 37
10 4.7 The Cornerflow System 38
12 5.1 General Perception and attitude of Store Management 53
13 5.2 Objectives and Scope of DESCO‘s Store Management 54
14 5.3 Evaluate the strategic factors affecting the choice of Store 55
Management
15 5.4 Appraise and evaluate the role and effects of different 56
stores at DESCO
16 5.5 Assess Inventory Management of DESCO 57
17 5.6 Examine and analyse security in different stores of DESCO 58
18 5.7 Procurement Practice at DESCO 59
19 5.8 Examine and analyse security in different stores of DESCO 59
20 5.9 Examine health and safety and legal issues involved in 60
Store Management
21 5.10 Evaluate the use of ICT at Central Store 61
22 6.1 Annual Procurement Plan for the Financial Year 2012-13 73
shown in Graphical Format
23 6.2 Sequence of operation of Procurement and Store 77
Management of DESCO

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CHAPTER-1

INTRODUCTION

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1.1 Introduction
Dhaka Electric Supply Company Ltd. (DESCO) was created as a distribution company in November
1996 under the Companies Act 1994 as a Public Limited Company with an authorised capital of Tk.5
billion. However, the operational activities of DESCO at the field level commenced on September 24,
1998 with consumer strength of 71,161 and a load demand of 90 MW. In the subsequent years of
successful operation and performance, the operational area of DESCO was expanded and the total
consumer growth increased to 4,49.063 as of June 30, 2011 with a maximum load demand of 640 MW.

Being the first public limited company in the energy sector, DESCO is now considered as a profitable
company which is managed efficiently and economically with optimum cost and manpower. DESCO
employees under its regular payroll generally carry out the desk jobs and supervisory activities while
the field operational activities have been outsourced. The major technical activities like substation and
switching station scheduled maintenance, trouble shooting and breakdown maintenance, overhead line
maintenance, trouble shooting of the customer service complain, line and equipment maintenance have
been outsourced. On the other hand, commercial support activities like taking meter reading,
distribution of monthly electricity bill, service disconnection of the defaulter consumer, new connection
meter installation, old or unserviceable meter change etc. are also outsourced.

With the expansion of operational area and fast increase in consumer growth and system load, DESCO
recognized its activities into 12 (twelve) Sales & Distribution (S&D) Divisions. This is aimed to ensure
effective control and supervision of the field operation in DESCO premises.

With a shareholder‘s equity of 991.9 crore for the year ended June 30, 2011, DESCO‘s stores and
spares stands 403 crore which is a major concern for DESCO Management. In recent days, physical
storage and distribution has crucial roles to play. Its essential objectives are to be the supply and
delivery of the right goods, to the right place at the right time in accordance with customer/user
requirements and within an acceptable cost framework for the supplier in order to reduce lead times,
provide agility and reduce unnecessary costs. The role of the management of stores is concerned with
improving both the efficiency and the effectiveness of the stores function by seeking to eliminate waste
from activities that add cost to the supply chain, while maximising those areas that add value.

Storage should be planned, organised and operated in such a way that the timeframe over which stock
is held should be as short as possible consistent with operational requirements. Again, Distribution is
the efficient movement of finished product from the end of the production line, and in some cases
movement of raw materials from the source of supply to the beginning of the production line. These
activities include freight transportation, warehousing, materials handling, packaging, inventory control,
plant and warehouse site selection, order processing, marketing, forecasting, customer service etc.

Furthermore, the ability to identify the true costs of Store Management is crucial. Without it,
organisations are unable to identify the potential for cost trade-offs that may exist within the system. A

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trade-off occurs where an increase in one area is more than matched by a cost reduction in other areas.
This will lead to an improvement in the overall situation. The trade-off concept has proved difficult to
implement in practice. To work effectively, organisations need to look outside rigid organisational
structures and look at what is best for the organisation overall and not for individual departments.

Considering these themes, new concepts and challenging business environment, Store Management of
DESCO has a lot of potentials for improvement. Bulk amount of international and local purchase of
DESCO are being kept at different stores of DESCO. As the nature of the business is electricity
distribution, different types of cables and accessories, pole and pole fitting materials, distribution
transformers, meter and meter accessories, substation equipment and spares, different types of tools and
spares are being stored at different stores of DESCO. Efficient and effective performance of Store
Management undoubtedly add value to the procurement function, save space and stock costs by stock
reduction and eventually save costs for the organisation. Thus DESCO Management need to improve in
the areas such as goods handling, suitability of goods for unit loads, effective utilisation of the
buildings, accessibility of stores and spares, stock availability, order lead time, expertise of staffs,
security measures, personal safety, information and communication technology and other things at the
Store Management.

1.2 Objectives
The study intends to identify non-performing areas and limitations of existing operational performance
of DESCO‘s Store Management. After studying key performance indicators in terms of costs (for
example staff payments, building and site, equipment and other resources and maintenance etc.) and
efficiency and effectiveness (for example stock availability, lead time, percentage of orders completed
on time, percentage completeness of order fill, storage density and accessibility) the study intends to
find out possible ways in improving performance of Store Management of DESCO.

1.3 Hypothesis
Performance measurement and monitoring are important to the effective management of any
organisation. Measurements provide information at both strategic and operational level.

Hypothesis 1: At strategic level, measurements relate to long-term planning and direction.

The measurement of key criteria evidences how an operation is performing against anticipated
goals and may highlight areas that require review or additional investment. In this case, it is
assumed that Store Management of DESCO has no specific long term vision and goals.

Hypothesis 2: At the operational level, measurement has more to do with the effectiveness
and efficiency of the operation and how it is reaching industry standards. Efficiency can be
defined as the relationship between inputs and outputs achieved. The fewer the inputs (both
goods and services) used by organisation to achieve a given output, the more efficient the
organisation. Again, effectiveness is the degree to which an objective or target is met. In this

xiii
 connection, it is assumed that existing performance of Store Management is not that much
satisfactory in terms of efficiency and effectiveness in comparison with the standards of
similar industry.

1.4 Justification
One of the major reasons for undertaken this research work is the fact that no specific study has yet
been conducted in regard to measuring the existing performance and finding out the possible ways for
improving the existing performance of Store Management of DESCO.

A common consent by the DESCO staffs is that Store Management doesn‘t add any value to wealth
maximisation of DESCO rather it is considered as costs to the DESCO Management. At times, top
management of DESCO are irritated with the performance of Store Management and conducts internal
audit to find out problems. But in reality, performance of the Store Management deteriorates overtime.

In general, this study is expected to helpful to the policy makers of DESCO for improving the existing
performance of Store Management.

1.5 Methodology
The study intends to use questionnaire and interviews as methods and procedures for collecting data
and information. It is quite understandable that officers and staffs who are direct and indirect
involvement of procurement and store management will be filled up the questionnaire. In addition, top
management will be interviewed for suggestions and improvements.

The questionnaire will cover issues such as staff management (in terms of payment, expertise,
deployment and other issues), management of stock (obsolete and redundant stock, stock proliferation
etc), security concerns (vehicle security, warehouse security, personal security etc.), storage system,
warehouse design and layout, Information and Communication Technology of Store Management and
some other related issues. Pretesting of questionnaire will be done to get a polished Questionnaire with
the feedback of the practitioners. General ideas of the research objective will be exchanged with the
respondents before requesting for filling the questionnaire. After the exchange of general idea, the
practitioner will be asked to fill the questionnaire.

Eventually, a written report will be prepared as per instruction given from the Institute of Governance
Studies, BRAC University under the guidance of Supervisor.

1.6 Limitations of the Research

Getting things done must be the indicator of competency and nothing happened smoothly in any
process of making new initiatives. This research might be an experience of encountering challenges

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and resistances for unknown fear. All the relevant expenditure for preparing the questionnaire, for
conducting key informant interviews, for writing up the research paper was borne by the research.
However, a fixed sum of money will be reimbursed by the BRAC University later after the submission
of the research paper. Besides, some of the respondents did not give the required time in filling out the
questionnaire due to their preoccupation. However, time for completion the research may hinder
quality of research to some extent.

1.8 Chapter Outline

The whole research work is presented in six different chapters.

The first chapter is the introduction chapter; which gives an outline of the general background of
DESCO and its Store Management. This chapter also explains the scope of research work, objective,
hypothesis, methodologies to be followed with the probable limitations.

The second chapter is the organisational orientation chapter; which gives background, management,
organisational structure and its mission and vision.

The third chapter is the research methodology chapter; where an elaboration of the design of the
research work is given including the selection of interviewees, framework of the questionnaire and
methods of valid interpretation through triangulation.

The fourth chapter is the literature review chapter; which give a generalised concept of store
management basing on which this research work intends to be carried out.

The fifth chapter is the analysis of the results chapter; which encompasses the interpretation of the
data in the appropriate format using the analytical methods. This chapter also provides the results
regarding existing performance of store management and finding our the possible ways for
improvement of the existing performance.

The sixth and final chapter is the conclusion and recommendations chapter; which gives guidelines to
improve the existing performance of store management. In addition, this chapter also gives the
limitations, assumptions and scope of further study in this topic.

xv
CHAPTER-2

ORGANISATIONAL
ORIENTATION

xvi
2.1 History
The electricity supply industry in South Asia started with the commissioning of the first
power station in the 1890s. Although a number on small stations were constructed over the
next 20 years, these stations were isolated, catering to small distribution networks serving the
major urban centers.

The first effort to structure a legal framework for the industry came in 1910 with the enactment of the
Indian Electricity Act, 1910. This Act sought to regulate the business of industry still based on the old
concept of isolated privately owned distribution networks fed by small generation stations & essentially
defined the rights & obligations of the supplier and the consumer.

In 1947, at the time of independence of India & Pakistan, the installed generating capacity in the then
East Pakistan was only 21 MW. Electricity was available to only a small elite in the district and sub-
divisional headquarters. The distribution networks in these cities were isolated and were fed by coal
fired steam power plants or diesel generation. In an effort to expeditiously augment generation capacity
to feed a development economy, the then Government of Pakistan issued and ordinance in 1959
creating the East Pakistan Water and Power Development Authority (EWAPDA). The Ordinance
essentially provided for the Governments takeover of all generation, Transmission and distribution
facilities from the private sector, thereby creating a total Government monopoly in the sector. During
1960 to 1970 the generation capacity of the then East Pakistan rose from 88MW to 475 MW, supplied
largely by natural gas and oil fired, steam power and hydro plants. The networks of Dhaka and
Chittagong and then been interconnected albeit with weak 132 KV links.

Shortly after the creation of an independent Bangladesh, in 1972, the first Government of Bangladesh,
in an effort to speed up the investment in the sector issued an Ordinance creating the Bangladesh Power
Development Board (BPDB) as the successor organization of the power side of EWAPDA. The
Ordinance recognized the divergence of energy related issues in development. During 1972 to 1995,
BPDB has increased the generating capacity in the country to 2818 MW, and the length of its 230 and
132 KV transmission networks to 419 KM and 2469 KM. For the first time in December 1982, the
eastern and western halves of the country were electrically connected through the commissioning of
double circuit 230 KV transmission line across the Jamuna riever energized at 132 KV between Ishurdi
and Tongi called the first East-West Interconnector. Generation sources were diversified to include a
230 MW hydropower station at Kaptai on the Karnaphuli river and natural gas and imported fuel based,
open and combined cycle power plants at different locations of Eastern and Western part of the
country. The distribution networks of all major towns and cities had been linked through 230 KV and
132 KV inter-ties.

In order to intensify the pace of rural electrification, the Government issued as ordinance in 1977
establishing the Rural Electrification Board (REB), a semi-autonomous agency charged with the
responsibility of planning, developing, financing and construction of rural distribution networks,
promoting the establishment of Rural Electric Cooperatives (Palli Bidyut Samities), handing over the
constructed rural networks to them, assisting the PBSs to operate and maintain the rural networks and

xvii
monitoring their financial performance. The REB has so far constructed over 46,000 Km of distribution
lines and provided over 950,000 consumers connections in the rural areas (As on June, 95).

In 1990, another ordinance was issued, which was subsequently enacted as an Act transferring the 132
kv, 33 kv Transmission and distribution system in the Greater Dhaka Area including the Metropolitan
City to a newly created Government agency called the Dhaka Electric supply Authority (DESA). This
was done to lessen the administrative burden on BPDB,s management by relieving it of the burden of
managing about 50 percent of the energy distribution in the entire country.

2.2 The Reform Process

Although several ordinances amending the Electricity Act, 1910 had been promulgated, none
of them addressed issues involving the commercial nature of the sector, which continued to be
treated as an extension of the Government providing social goods for the people. From 1986
onwards, the commercial performance of the BPDB deteriorated and during 1991, BPDB,s
average gross systems loss was about 42 percent and accounts receivables in excess of 6.5
months of billing. This performance was not found reasonable to the covenants agreed by the
Government and BPDB with the Asian Development Bank and the World Bank. These two
institutions along with the Overseas Economic Co-operation Fund, Japan, Overseas
Development Administration, U. K., Kredltanstalt fur Wlederaufbau, Germany and the United
States Agency for International Development, decided not to provide any financial assistance
to the sector until BPDB and DESA improved their performance to agreed levels.
Consequently it considered restructuring the Power sector as a sustainable long-term solution
to its problems.

With the economy performing very well during 1992-95, the demand for electricity grew
substantially. Constrained by the paucity of its resources, the Government decided to allow
private sector participation in the power sector. However, it was quickly realized that private
capital, whether domestic or foreign, would not come into a sector, which was not financially
viable and was not technically, organizationally and legally structured in a way conducive to
attract it. Faced with a grim possibility of serious electricity shortages during the next few
years and to enable the sector to be financially self-sustaining and also attract private capital,
the cabinet approved in principle, the inter-ministerial committee report named "Power Sector
Reforms in Bangladesh (PSRB)", in September 1994.

In the meanwhile, the performance of BPDB and DESA have slowly but steadily improved,
although they are by no means near international levels of performance. The Dhaka area is the

xviii
largest single distribution territory consuming about 50 percent of the total electricity sold in
Bangladesh. DESA, which is the distribution agency for the Dhaka area has a poor
performance record with respect to system losses and accounts receivables. Although the
performance has improved considerable since 1992 on account of intensive monitoring, there
is a limit to the gains that can be made and it is felt that further progress can be achieved on a
sustainable basis only if there is a change in the business environment, both external and
internal to the organization, which will enable introduction of more sophisticated control and
management systems, and also organizational accountability.

The organizational arrangements including management structure, employee compensation,

delegation of authority, conduct, discipline and appeal rules and promotion policies are based
on the civil service rules and arrangements which were not well suited to the functioning of a
commercially oriented sector such as the power sector. It is therefore necessary to create new
organization with its own rules and regulation that would be more suited to the new business
environment that is now being created in the power sector.

Thus Creation of Dhaka Electric Supply Company is a part of the reforms being initiated by
the Government. In the process of on going Power Sector Reforms by way of unbundling the
power sector and increasing efficiency in the area of generation, transmission and distribution,
Dhaka Electric Supply Co. Ltd. (DESCO) was created as a distribution company in
November 1996 under the Companies Act 1994 as a Public Limited Company with an
Authorized Capital of Tk.5 billion.

2.3 Activities of DESCO

DESCO was constituted to provide uninterrupted & stable power supply, better consumer
service, improve system loss & Collection Import Ratio and accordingly DESCO starting its
operational activity since September 24, 1998 by taking over of Mirpur area from DESA.
Following are the initial activity of DESCO which includes:

 Operation & Maintenance of Sub-Stations & Lines;

 Commercial functions i.e. billing, consumer accounting, disconnection & re-

connection of consumers, testing & installation of consumer meters etc.; and

 Planning, Design and installation of Sub-stations & lines etc.

xix
2.4 Service territory of DESCO
Service territory of DESCO is as follows:

 1st Phase: Mirpur area bounded by Rokeya Sarani and low lying area in between
Mirpur and Cantonment in the East, Agargaon road in the South, Mirpur Road and
Turag river in the West and low lying areas in the North. The proposed area is shown
in the enclosed map. The area covered under the 151 phase was taken over by
DESCO on September 24, 1998 from DESA.

 2nd Phase: Gulshan Circle including Mirpur Area bounded by Balu River in the
east, Turag River in the west and Turag and Balu River in the Nort and Mirpur Road,
Agargaon Road, Rokeya Sarani, Progoti Sarani, New Airport Road, Maymenshing
Road, Mohakhali Jeel, Rampura Jheel connected with Balu River in the South (Map
enclosed). The additional area covered under the 2nd phase was taken over by
DESCO on April 09, 2003 from DESA.

2.5 Vision & Mission

2.5.1 Vision: To be a role-model electric supply company in the region using most
dependable technologies and be a development partner in the continuous welfare of the
society.

2.5.2 Mission: Service to the utmost satisfaction of consumers through reliable and
uninterrupted power supply and provide value for money. Provide congenial working
environment for employees.

2.5.3 Corporate Philosophy: Service excellence with integrity and corporate social
responsibility.

2.5.4 Focusing Efforts: Its focusing efforts are on delivery of quality service in the territories of
DESCO area with the aim to add increased value to shareholders‘ investment and highest possible
benefits to the consumers. Its strategic priorities are to have sustained growth, broaden and improve
service to its consumers.

2.6 Growth of the Company

Starting from a consumer base of 71,000 with load demand of 90 MW in 1998, the Company has
grown to cater about 460,000 consumers as of December 2011. The shareholders equity increased from
Tk.4,470 million to Tk.7,320 million, recording a growth of 64%.

2.7 Management

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Under the guidance of a nine member Board of Directors, the company is run by a management team
headed by the Managing Director, with a view to run the Company efficiently and economically with
optimum overhead cost and manpower. DESCO employees under its regular payroll generally carry out
the desk jobs and supervisory activities while the field operational activities have been outsourced.
With the expansion of operational area and fast increase in consumer growth and system load, DESCO
reorganized its activities into 12 (twelve) Sales & Distribution (S&D) Divisions.

xxi
 Table-2.1: Statistics of consumers in regard to personnel

Name of S&D Divisions Number of Number of staffs

consumers (Permanent)
Head Office (including different functional - 191
departments, GM Offices and Zonal Offices)
Store - 19
Testing & Repair - 10
Prepaid Meter Unit - 47
Bashundhara Grid - 24
Utrara Grid - 14
Divisions that don’t handle consumers directly - 305
Agargaon 28,838 53
Monipur 34,413 49
Shah Ali 25,950 49
Rupnagar 34,300 55
Pallabi 29,870 54
Kafrul 48,612 65
Mirpur Zone 201,983 325
Gulshan 36,995 115
Baridhara 62,686 108
Gulshan Zone 99,681 223
Uttara 60,394 107
Dakshinkhan (including Special Zone) 46,181 88
Tongi (East) 24,108 70
Tongi (West) 27,539 63
Mirpur Zone 158,222 299
DESCO (Total) 459,886 1179
(Data updated upto November, 2011)

xxii
 Table-2.2: Commercial Highlights

Energy Import (GWH) 3150

Energy Sales (GWH) 2995
System Loss (%) 8.69
Collection Ratio (%) 98
Collection Import Ratio (%) 85
Receivable/Sales (%) 25
(Data updated upto December, 2011)

The major technical activities like substation and switching station scheduled maintenance, trouble
shooting & breakdown maintenance, overhead line maintenance, trouble shooting of the customer
service complain, line & equipment maintenance have been outsourced. On the other hand, commercial
support activities like taking meter reading, distribution of monthly electricity bill, service
disconnection of the defaulter consumer, customers house wiring inspection, new connection meter
installation, old or unserviceable meter change etc. are also outsourced, including other logistic support
services like security service, cleaning service and transport. To this end, DESCO engaged several
experienced contractors through competitive tendering process. With the proper maintenance of the
distribution system, service complaints from consumers have reduced significantly. To achieve greater
consumer satisfaction, the procedure for new connection has been simplified and efforts are on to
further reduce the time period required.

Table-2.3: Technical Highlights

33/11 KV Substation 22
Capacity of 33/11 KV Substations 880/1232
Maximum Demand (MW) 640
33 KV Overhead Line (km) 83
33 KV Underground Line (km) 216
11 KV Overhead Line (km) 1045
11 KV Underground Line (km) 361
LT Line (km) 1717
Distribution Transformer (Nos) 4938
(Data updated upto December, 2011)

2.8 Organisational Structure of DESCO

DESCO incorporated under the Companies Act 1994 with its own Memorandum and Articles
of Association. The company as a whole owned by Government of Bangladesh and DESA
representing government by acquiring 100% shares. DESCO managed by a part time Board of
Directors appointed by its shareholders, they are responsible for policy decisions. The Board
of Directors appointed managing Director and two full time Directors and they were also

xxiii
members of the Board Directors after appointment. The organizational of the company is as
follows:

 The Chairman DESA being the Board of Directors on his nominee till such time DESA owns
the majority of the shares in DESCO.

 The Managing Director acts as the Chief Executive Officer of the company and responsible
for overall management of the company.

DESCO recruited its employees through open advertisement. The qualification and
experience requirement were fixing up according to the requirement for performing their
duties and responsibilities against the respective post. Mainly those who have sufficient
experience in the field of utility organization are selected on a merit basis. They were
employed on long-term contracted basis under the DESCO's service rules approved by its
Board of Directors.

The structure of DESCO is functional in nature. In DESCO, employees tend to perform a

specialized set of tasks. This leads to operational efficiencies within that group. However it
could also lead to a lack of communication between the functional groups within an
organization, making the organization slow and inflexible. Coordination and specialization of
tasks are centralized at DESCO, which makes the services of the organization sometimes less
efficient.

At present, the structure of DESCO looks as follows:

xxiv
 Figure-2.1: Existing Organogram of DESCO

Board of Directors

Managing Director
Panel of Retainer legal
advisors
Retainer physician (s)

Director Director Director Director Director

Engineering Operation Procurement Finance & Acts Administration

GM GM GM
Development Planning & GM GM Procurem GM GM
Network S&D Finance & Admin
& Project Design ent
Operation Operation
Acts

DGM DGM DGM

Development DGM S&D DGM DGM DGM DGM DGM DGM
Planning &
& Meter Plant Design
Substation & Operational DGM Proc, Ins Finance Accounts ICT Admin HRM
Network Zones-03 Material &Testing
Planning
& Stores

Manager Manager Manager Manager Manager Manager Manager Manager Manager

Develop Planning s S&D Material Banking/F MIS & Logistics & Recruitment
Divisions Planning/ M&B IT/Hardware & General , Inq. &
Testing &
ment Repair (12) Store (03) (02) Network (02) Services Discipline

Manager Manager Manager Manager Manager

Meter Plant Design & Grid & MV S/S
Protection Manager Training &
Specification Maint Cord Development
Procurement
(02)

(Organogram-2010, Revision-2, approved by 195th Board Meeting as on 07.04.2011)

2.9 Structure of Store Management

Previously, Store Management of DESCO works haphazardly. There is no correlation
between procurement and store management earlier. But now as top management deemed the
importance of Store Management, it reflects in policy making of the organization. As per
approval of 195th Board Meeting, the structure of Store Management is seen as under:

xxv
 Figure: 2.2: Departmental Organogram of Store Management headed by Procurement

AM -1
Sr. Office Asst -1
GM Driver -1
Procurement Peon -1
Sr. Office Asst -1
Messenger -1
Driver -1
Peon -1
Messenger -1

Sr. Office Asst -1

DGM Driver -1
DGM Material Planning & Store Peon -1
Messenger -1
Procurement, Inspection &
Testing

Manager
Material Planning,
Manager Manager Manager Manager clearing & Movement
Procurement Inspection & Testing Central Store Sub-store

Clearing & Movement

DM -1
AM -1
JAM II -1
Central Store Sub Store(s)*
1 Office Asst. -1
DM AM -1 Peon -1
DM - DM -
-1 JAM II (Store) -1 Vehicle outsource -1
1 1
Office Asst. Office Asst. (Store) -1
AM - JAM II (Store) -
-1 Helper -2
2 1
Peon Vehicle outsource -1
Sr. Office Asst. -1 Office Asst. (Store) -
-1
Office Asst. -1 2
Vehicle outsource Material Planning
Vehicle outsource -1 Driver (Heavy vehicle) -1
-1
Peon - Helper DM -2
1 -6 AM -1
Peon - JAM I -1
1 Vehicle outsource -1

(Organogram-2010, Vehicle outsource

Revision-2, approved- by 195th Board Meeting as on 07.04.2011)
1
• Number of sub-store shall be decided by the management depending on requirement. The personnel shown are for one sub-store.

xxvi
CHAPTER-3

RESEARCH
METHODOLOGY

xxvii
3.1 Introduction
This chapter describes the methodology of this thesis; the main topics included in this chapter are
research strategy, research design and population, sample size determination, case study, questionnaire
design, questionnaire content, pilot study and tests of reliability and validity of questionnaire and the
last but not the least is the process of data analysis.

3.2 Research strategy

Naoum (1998) defined the research strategy as the way in which the research objectives can be
questioned. Two types of research strategies are used at studies, quantitative and qualitative research.
Quantitative approach is used to gather factual data and to study relationships between facts and how
such facts and relationships accord with theories and the findings of any research executed previously,
but the qualitative approach seek to gain insights and to understand people's perception of "the world"
whether as individuals or groups (Fellows and Liu, 1997). In this thesis, a qualitative approach is used
to understand the perception of respondents in regard to existing performance and find out the possible
ways for improvement of the Store Management of DESCO.

3.3 Research design

"Research design" refers to the plan or organization of scientific investigation, designing of a research
study involves the development of a plan or strategy that will guide the collection and analyses of data
(Poilt and Hungler, 1985). This research consists of seven phases; the first one is the proposal for
identifying and defining the problems and establishment of the objectives of the study and development
of research plan. The second phase of the research includes literature review. The third phase of the
research includes written questionnaire survey and key informant interview to key people of DESCO.
In addition some actual cases were collected from Central Store of DESCO. The fourth phase of the
research includes the questionnaire design, through distributing the questionnaire to a sample of
respondents. The purpose of the pilot study was to test and prove that the questionnaire questions are
clear to be answered in a way that help to achieve the target of the study. The questionnaire was
modified based on the results of the pilot study. The fifth phase of the research was questionnaire
distribution. The questionnaire was used to collect the required data in order to achieve the research
objectives. The sixth phase of the research focused data analysis and discussion. The last phase of the
research includes the conclusions and recommendations.

3.4 Population
The populations of this research are the people who are directly and indirectly engaged with Store
Management and procuring activities of DESCO

3.5 Sample Size Determination

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Wood and Haber (1998) defined the sampling as the process of selecting representative units of a
population for the study in research investigation. A sample is a small proportion of a population
selected for observation and analysis. The samples were selected randomly from Store Management
and procuring activities of DESCO

3.6 Methodology of this thesis

After surveying the previous approaches of methodologies, the suitable one is to use questionnaire and
case studies methods.
3.6.1 Questionnaire Survey
A questionnaire was developed to assess the perceptions of respondents about existing performance
and find out the possible ways for the improvement of Store Management of DESCO. Factors
influencing the existing store performance of DESCO were first examined and identified through a
relevant literature review and by conducting a pilot study that sought advice from experienced
practitioners.

3.6.2 Cases and interviewees

Selecting the cases and interviewees serves as a critical steep in case study research. The variety of
actors involved indicates the presence of many different interests, opinions and motives. These actors,
namely from Assistant Managers to Directors of DESCO, are involved in decision making process in a
different manner of Store Management of DESCO. Experience with multiple projects and audit of the
inconstancy of Store Management are being gathered from the experienced staffs.

Of course it is easier to draw up with a list of all the people one wants to talk to, but actually, arranging
an interview is a step further, depending on goodwill and connections. Conveniently, my colleagues of
DESCO were very accommodating in giving interviews.

The final list of interviewees is presented below, in chronological order:

1. Director and GM, 2 (two)
2. DGM,4 (four)
3. Manager, 5 (five)
4. Deputy Manager, 08 (eight)
5. Assistant Manager, 02 (two)

In addition, some past cases were carefully selected and investigated. These cases illustrate the link
between the data collected by questionnaire and data in case, recommendations will be documented for
each case.

3.7 Questionnaire design

Considering the conditions and circumstances surrounding Store Management of DESCO, factors,
which affect the existing performance of DESCO have been selected.

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3.8 Questionnaire content
The questionnaire includes: general information of the respondents, general perception and attitude
regarding Store Management of DESCO, determine the Objectives and Scope of DESCO‘s Store
Management, evaluate the strategic factors affecting the choice of Store Management, appraise and
evaluate the role and effects of different stores at DESCO, assess Inventory Management of DESCO,
examine and analyse security in different stores of DESCO, examine health and safety and legal issues
involved in Store Management and evaluate the use of information and Communication Technology at
Central Store.
3.8.1 General information of the respondents
Four items questions were prepared asking for information about respondents such as the name of the
department, designation of the officer, relevant working experience (years), educational background

3.8.2 General Perception and attitude regarding Store Management of DESCO

This part of questionnaire consist of 8 (eight) questions to assess the general conception of people
about Store Management of DESCO.

3.8.3 Determine the Objectives and Scope of DESCO’s Store Management

This part of questionnaire consist of 10 (questions) to analyse objectives and roles of Store
Management, total cost concept regarding Store Management, importance given by top management to
Store Management.

3.8.4 Evaluate the strategic factors affecting the choice of Store Management
This part of the questionnaire evaluates factors such as short-term, midterm long-term planning of
DESCO in regard to Store Management.

3.8.5 Appraise and evaluate the role and effects of different stores at DESCO
This part of the questionnaire appraises and evaluates existing design and layout of different stores at
DESCO premises.
3.8.6 Assess Inventory Management of DESCO
This part of the questionnaire assesses stock records, stock movements, redundant stock, demand
analysis of different stores at DESCO premises.

3.8.7 Examine and analyse security in different stores of DESCO

This part of the questionnaire analyses the personnel security, staff security and stock security of
different stores at DESCO.

3.8.8 Examine health and safety and legal issues involved in Store Management
This part of the questionnaire examines health and safety issues of staffs, risk analysis of stores and
legal areas for concerns of store in regard to Store Management of DESCO.

3.8.9 Evaluate the use of information and Communication Technology at Central Store
This part of the questionnaire appraises the use of ICT at Central Store to improve the existing
performance of Store Management of DESCO.

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3.9 Pilot study
These structured questionnaires should be based on a carefully prepared set of questions piloted and
refined until the researcher is convinced of their validity. Therefore the pre-testing is an important stage
in the questionnaire design process, prior to finalizing the questionnaire. It involves administrating the
questionnaire to a limited number of potential respondents and other knowledgeable individuals in
order to identify and correct design flaws. The test was made by distributing drafts questionnaire
among some selected respondents. In general, they agreed that the questionnaire is suitable to achieve
the goals of the study.

3.10 Data Measurement

In order to be able to select the appropriate method of analysis, the level of measurement must be
understood. For each type of measurement, there is/are an appropriate method/s that can be applied and
not others. In this research, ordinal scales were used. Ordinal scale is a ranking or a rating data that
normally uses integers in ascending or descending order. The numbers assigned to the agreement or
degree of influence (1, 2, 3, 4, 5) do not indicate that the interval between scales are equal, nor do they
indicate absolute quantities. They are merely numerical labels. In this research statements based on a
Scale from 1-5, where 1 represents the ―Least Important‖ or ―Strongly Disagree‖; 5 represents the
―Most Important‖ or ―Strongly Agree‖; and ―N/A‖ are set if someone thinks that he/she is uncertain in
rating a particular statement.

3.11 Triangulation
In the social sciences, triangulation is often used to indicate that more than two methods are used in a
study with a view to double (or triple) checking results. This is also called "cross examination"

The idea is that one can be more confident with a result if different methods lead to the same result. If
an investigator uses only one method, the temptation is strong to believe in the findings. If an
investigator uses two methods, the results may well clash. By using three methods to get at the answer
to one question, the hope is that two of the three will produce similar answers, or if three clashing
answers are produced, the investigator knows that the question needs to be reframed, methods
reconsidered, or both.

Triangulation is a powerful technique that facilitates validation of data through cross verification from
more than two sources. In particular, it refers to the application and combination of several research
methodologies in the study of the same phenomenon.
 It can be employed in both quantitative (validation) and qualitative (inquiry) studies.
 It is a method-appropriate strategy of founding the credibility of qualitative analyses.
 It becomes an alternative to traditional criteria like reliability and validity.
 It is the preferred line in the social sciences.

xxxi
By combining multiple observers, theories, methods, and empirical materials, researchers can hope to
overcome the weakness or intrinsic biases and the problems that come from single method, single-
observer and single-theory studies.

Figure 3.1: Triangulation Method

The protocol used in this thesis is methodological triangulation, basically entailing the use of different
kinds of methodologies to arrive at a valid interpretation or generalization:
 Multiple observations of theory where applicable
 Key Informant Interviews
 Qualitative Data Analysis
 Reflection with supervisor

These methods can also be used at triangulation protocols on their own, as multiple observations within
the same method could also provide proper base for triangulation.

3.11 Conclusion
Based on the design of the research, this thesis work is carried out and the data and associated findings
are analysed to arrive at a justifiable conclusion regarding the answers to the research questions.

xxxii
CHAPTER-4

LITERATURE REVIEW

xxxiii
4.1 Procurement
Procurement is the process of obtaining goods and services from preparation and processing of a
requisition through to receipt and approval of the invoice for payment. It commonly involves (1)
purchase planning, (2) standards determination, (3) specifications development, (4) supplier research
and selection, (5) value analysis, (6) financing, (7) price negotiation, (8) making the purchase, (9)
supply contract administration, (10) inventory control and stores, and (11) disposals and other related
functions.

4.2 Procurement Process

Procurement process is always called Purchasing and the group within the organization, the Purchasing
Department. Purchasing process is more or less the same step by step process in every organization,
irrespective of the size or the business they are in to. Purchasing is often understaffed and the resources
are pulled into day-to-day operational activities, leaving precious little time to focus on strategies and
tactics. Most of the cases, true procurement skills and expertise did not exist within the organizations.

The purchasing process involved several steps— which get initiated when an employee realizes the
need for an Item or Service. In almost all the cases, it is a reactive operational or clerical job that will
follow once a need is realized. The employee will submit a material or service requisition containing
the details of required item or service to the immediate supervisor, who, based on the authority set, will
approve the requisition. Usually requisition will contain description of the item and the quantity
required. The approval authority will be typically set based on the nature cost and/or volume of the
item or service. For example, standard office supplies for an individual may not need any approval.
However, if there is training for which a set of office supplies are required, would need an approval
from the concerned higher authority. On the other side, a desktop computer or flight ticket or hotel
accommodation will always need an approval.

Once the material requisition (MR) is approved, it is given to the inventory/store/purchasing

department. If that is a stocked item (like office supplies and MRO), the item will be issued to the
requester. In case of a service, non stocked items and items that are out of stock, the purchasing team
will initiative for the buying process.

A purchase requisition (PR) is the first formal document in the purchasing process. It is usually
generated by the Purchasing department and approved by approving authority and finance team. This
will contain similar details like in a material request, however, may have same or multiple items
required by various groups or individuals in the organization.

The real purchase starts with finding the suppliers or service providers who can deliver the specific
goods and services. Tenders and Quotations has been the traditional formal method of finding and
selecting vendors. The company issues a tender notification seeking proposal from qualified suppliers.
Tenders are usually notified through newspapers and other mass communication media as well as
through direct communication with known or incumbent suppliers. Suppliers send the quotations along
with other detail on the good or services as well as delivery terms.

xxxiv
Upon receipt of quotations, one or many suppliers will be selected based on the specific requirement to
deliver the good or services. A purchase order (PO) will be send to chosen supplier(s) asking them
deliver the goods or services. PO is the first legally valid document that companies send to its supplier.
It is a legal agreement warranting to accept the goods or services delivered and to pay as agreed.
Typically suppliers send an acknowledgement note for the POs received as an acceptance of the order
and to confirm the delivery terms.

Based on the agreed up on timeline, supplier will deliver goods or services. This will be notified
through a Goods Receipt Note (GRN). At times, the delivery may not be in full, a partial delivery
would be made based on the circumstantial requirements. The good will then go through the inward
quality and acceptance process, passed good will be taken in to store, accounted in inventory and then
issued to the requestor. In case the goods get rejected for any reasons, it will be send back to supplier
for replacement.

Upon the goods acceptance, supplier send across Invoice which is a payment request for the goods or
services delivered. Like in case of delivery, invoice can be for a partial delivery. A three point
matching, i.e. tally Purchase Order with Goods Received with the Invoice, will confirm the integrity of
the transaction. This gets entered in to the Account Payable (AP) system as a payable entry. Once the
necessary finance approvals are done, payment will be made to the supplier through the agreed up on
means and AP entry get updated with actual payment details.

Below is how a traditional Purchasing process used to work:

Figure 4.1: Purchasing Process

xxxv
4.3 Existing best practice of Store Management
4.3.1 Store Management and its objectives and roles
Storage can be defined as a temporary location for materials required for operational purposes.
Consequently, the objective is that storage should be planned, organised and operated in such a way
that the timeframe over which stock is held should be as short as possible consistent with operational
requirement. On the other hand, distribution is the efficient movement of finished product from the end
of the production line to the consumer, and in some cases includes the movement of raw materials from
the source of supply to the beginning of the production line. These activities include freight

xxxvi
transportation, warehousing, materials handling, packaging, inventory control, plant and warehousing
site selection, order processing, marketing, forecasting and customer service. Physical storage and
distribution have crucial roles to play in helping to deliver the objective of ‗delighting the customer/end
user‘.

Stores are normally divided into various sections such as receiving section, tool stores, general stores,
raw materials stores, finished parts stores etc. stores plays a vital role in the operations of a company.
Stores networks are incredibly complex and therein lay the opportunity of improvement. Stores act as a
cushion between purchase and manufacturing on one hand and manufacturing and marketing on the
other. The inherent limitations of forecasts make the stores function a necessity.

Stores function is an inseparable part of all business and non – business concerns, whether they are
industrial or service, public or private, small or large. The task of store keeping relates to safe custody
and stocking of materials, their receipts, issues, and accounting with the objective of efficiently and
economically providing the right material at the right time whenever required in the right condition to
all user departments.

4.3.2 Functions of store Management

The following are the principal functions of a store:
 To receive raw materials, components, tools, spares, supplies, equipments and other items and
account for them.
 To provide adequate, proper and efficient storage and preservation for all the items.
 Physical checking of all incoming materials as per the delivery challan/invoice and proper
maintenance of daily goods receipt register or records.
 Arrange for inspection of incoming materials.
 Ensure that goods inward notes are raised and distributed without delay
 Issue materials to the consuming departments against authorised requisitions and account for
the same.
 Maintain accurate and up – to – date records of material received, issued, rejected, disposed,
and quantity on hand of all the items.
 Ensure that all documents relating to receipts and issue are sent to stock control, accounts and
other concerned departments.
 Undertake stock verification as per approved procedure.
 To highlight stock accumulation, discrepancies and abnormal consumption and initiate
appropriate control action, wherever necessary.
 To minimise obsolescence, surplus and scrap through proper codification, standardization,
preservation and handling.
 To ensure good housekeeping so as to minimise the need for material handling.
 To make available a balanced flow of materials so as to economise on capital tied up in
inventory.
 To accept and store scrap and other discarded materials.

xxxvii
Depending upon the nature of business (i.e. manufacturing, trading services, etc,) one or more of these
functions may gain primacy over the rest.

4.3.3 Recent Developments in Store Management

 Recognizing the importance of customer service (shown in more clearly defined customer care
policies) together with realizing that logistics can provide a competitive edge through the
quality of service to customers.
 Concentrating manufacturing units, maximising productivity in production and ignoring
political frontiers.
 Centralising distribution depots.
 Developing sophisticated computer programmes, using the latest techniques in simulation
modeling and tracking.
 Improving product control in the use of product dating, barcoding and radio frequency
identification discs (RFID), so shorter-life products can be handled more effectively.
4.3.4 Standard Delivery Process
 Ordering should be simple and straightforward.
 Internal processes should ensure the availability of goods within an agreed timeframe.
 Systems should help the order to progress without undue delay.
 Goods should be available when required in the correct location in direct correlation to the
meeting of agreed customer service levels.
 Customers should be kept informed of progress.
 Delivery time and place should be agreed.
 Delivery should be made as agreed.
 In case of undue delay customers should be kept informed.
 Records should be kept in relevant areas such as on-time deliveries, customer complaints and
claims, to monitor the effectiveness of the service.
 Drivers should be polite, smart and well trained in customer service skills.

4.3.5 Warehousing
4.3.5.1 Factors determining storage requirements
 Number of outlying units to be served by the stores
 Location of the outlaying units of stores
 Number of stock items is to be held
 Classification of store items
 Classification of store items by usage
 Volume of stock to be issued/ received each day
 Major handling equipment to be used (mobile cranes, forklift trucks, conveyors etc)
 Type of transport modes

xxxviii
 Number of trucks/pickups to be loaded or unloaded each day
 Necessities for rail or water borne transport
 Requirement of staffs in stores

xxxix
4.3.5.2 The cost of stores facilities
Figure 4.2: Cost of Store Facilities

4.3.5.3 Reasons for holding stock

 To minimise production costs.
 To take account of variable lead time. Owing to production costs or the costs that may be
incurred in not meeting customer service standards it may be deemed necessary for safety
stock to be held.
 To minimise buying costs.
 To take advantage of bulk discounts.
 To allow for price fluctuations and speculation.
 To accommodate seasonal fluctuations.

4.3.5.3 Factors in warehouse design

 Purpose of the warehouse
 Choice of materials handling systems and equipment
 Size
 Location
 System requirements
 Overall layout
4.3.5.4 Data required for warehouse design
 Goods handled (inventory levels, handling requirements)
 Order characteristics (service levels, order frequency)
 Goods arrival and despatch patterns (vehicle types and sizes, unit loads to be handled)
 Warehouse operations (picking and packing, administration)

xl
4.3.5.5 Design and layout principles for warehouses
 Use a one-storey building wherever possible.
 Use straight-line or direct flow of goods in and out of the warehouse with goods being
delivered at one end, held, and ranked according to ABC analysis.
 Utilise an effective storage plan to maximise warehouse operations and to avoid inefficiencies.
 Use efficient materials handling equipment.
 Minimise aisle space within the constraints of the size, type and turning circle of materials
handling equipment.
 Maximise use of the building‘s height to use the cubic capacity fully.
 Use an efficient system of product identification.
 Plan for growth.
 Ensure full attention is given to health and safety issues.

4.3.5.6 Features of an effective warehouse

 A building design that allows for maximum flexibility
 Good road and rail access
 Ideally the location should be ‗out of town‘
 Doors and loading bays that allow ready access while offering security
 Additional outside parking for vehicles that may need to queue to gain access
 Clear access within the warehouse
 Durable and sealed floor surfaces
 Adequate ceiling height
 Dry, well-ventilated atmosphere with adequate heating
 Good security features
 Adequate lighting with natural light where possible
 Compliance with building and fire regulations
 Adequate parking facilities for staff and access via public transport
 Office space

4.3.5.7 Factors in selecting a storage system

 Type of goods handled
 Suitability of goods for unit loads
 Effective utilisation of the ‗cube‘ of the building, perhaps requiring high-aisle racking and
hence appropriate handling equipment
 Accessibility
 Security considerations
 Personnel safety

4.3.5.8 Pareto Analysis

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 Vilfredo Pareto, an Italian economist and sociologist, concluded that in any series of
elements to be controlled a selected small factor in terms of number of elements
(20%) almost always account for a large factor in terms of effort (80%). Pareto
subsequently developed this observation into a more defined 80:20 rule.

 The Pareto principle serves as the basis for materials management value segmentation
and in this context is more commonly referred to as ABC Analysis. This is based on
the concept that approximately 80 percent of the total value of stock items will be
accounted for by approximately 20% percent of the items.

 The usage value of each item will dictate the stock classification it is allocated

o Category A items: The ‗vital few‘. Small in number but high in usage value

o Category B items: ‗Normal‘ items. Medium in number, medium usage value

o Category C items: The ‗trivial many‘. High in number, low usage value

xlii
  Figure 4.3: Pareto Analysis

4.3.6 Types of Warehouse Layout

4.3.6.1 The throughflow system
Straight line or throughflow is one of the most effective layouts, with goods arriving at one end of the
warehouse and being handled in a designated darea before being located in their appropriate position in
the warehouse.


 Figure 4.4: The throughflow system

Advantages of throughflow systems are:

 Useful if goods in and goods out vehicle requirements are different.
 Works well if it is in a natural flow with other processes.
 Total separation of the ‗in‘ and ‗out‘ sections reduces scope for error.

xliii
Disadvantages of throughflow systems are:
 Loading bays take up a lot of space.
 Bay security and management may be more difficult.
 Internal movement may be greater than with other systems.

4.3.6.2 The ‘inverted T’ system

Inverted T flow allows the warehouse to be divided to meet long-term storage needs. Stock is then
positioned in line with usage, the most frequently used items being nearer the pick-and pack or
despatch area.
 Figure 4.5: The ‘Inverter T’ system

Advantages of the inverted ‗T‘ flow system are:

 Good utilisation of loading bays and materials handling equipment.
 Flexibility for expansion on three sides.
 Popularity storage reduces need for movements.
 Segregation aids handling.

Disadvantages of the inverted ‗T‘ flow system are:

 Central aisle becomes prone to congestion.
 Expansion requires some modification of flow.
 Moving items from bulk storage to stock or to despatch requires tight control.

4.3.6.3 The crossflow system

The crossflow layout utilizes the full width of the warehouse. Within the low/medium/high-usage areas
there is often a usage weighting placing.
 Figure 4.6: The crossflow system

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Advantages of the ‘crossflow’ system
 Good utilization of loading bays and materials handling equipment.
 Flexibility for expansion on three sides.
 Popularity storage reduces movement.
 A combination of ‗bulk‘ and ‗standard‘ stock can be utilised across the width of the
warehouse, normally with Category A items the most accessible and bulk items the least
accessible in terms of flow.
 One-way flow is clearly defined.

Disadvantages of the ‗crossflow‘ system are:

 Segregation into high, medium and low usage may not always be possible.
 Combination of ‗bulk‘ and ‗standard‘ stock can present problems.

4.3.6.4 The cornerflow system

In the corner warehouse flow, goods flow in and out of adjacent walls of the warehouse, joined at a
corner. This layout serves to reduce congestion in the aisles particularly in terms of high throughput.
The system often provides a practical operating compromise that allows the goods inward, flow and
despatch areas to integrate effectively.
 Figure 4.7: The cornerflow system

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4.3.7 Warehouse KPIs
4.3.7.1 Warehouse KPIs: Cost
 Staff, including overtime and other payments
 Building and site
 Equipment and other resources
 Maintenance
 Pallets and pallet repair
 Usage of packing materials and other consumables.
 Service, including any bought-in services

4.3.7.2 Warehouse KPIs: customer service

 Stock availability in the warehouse
 Order lead-time
 Percentage of orders completed on time
 Percentage completeness of order fill
 Number of outstanding back orders
 Damaged stock
 Returns and customer complaints

4.3.8 Types of Racking

 Fixed pallet racking is constructed of a strong frame usually made of steel with shelving of the
same material.

xlvi
  Adjustable pallet racking is similar in design but is configured so that the shelves can be set at
any required height and adjusted as necessary.
 Drive-in and drive-through racking. These are pallet-based racking systems that allow access
for forklift trucks.
 Push-back racking allows pallets to be stored up to four pallets deep on flexible racking.
 Cantilever racking is designed for the storage of long items such as bars, tubes and sheet
materials.
 High-rack and narrow-aisle racking. Designed to maximise space, the racking utilises the full
height of the warehouse with aisles placed as close as possible to each other to allow access by
either manually driven or computer-controlled forklifts.

4.3.9 Types of Shelving

 Long-span shelving offers a full range of beam sizes and load capacities that are easily
adjustable in sturdy upright frames.
 Closed shelving with sheet steel backing and sides easily divided for small parts storage.
 Carton live storage allows containers or tote-boxes to flow down inclined rollers permitting
first in, first out (FIFO) stock rotation and order picking.
 Line-side carton live storage units operate in a manufacturing or assembly area and are
particularly suitable where just in time (JIT) manufacturing processes are used.
 Mobile shelving systems permit increased flexibility and can make the best use of usable
space.

4.3.10 Types of Pallets

 Standard two-way or four-way wooden pallets where the forklift can approach the pallet fron
two sides or four sides respectively.
 Box pallets are standard pallets with a box structure incorporated into the design.
 Eco pallets are used extensively in the food and pharmaceutical industries.
 Post pallets have a post framework at each corner and this provides stability for goods that are
not always suitable for palletisation.
 Steel pallets suitable for heavy loads or drums etc.

4.3.11 Material Handling Equipment

4.3.11.1 Methods of Material Handling
 Manual handling
 Manually operated mechanical handling equipment
 Forklift trucks
 Crane systems
 Conveyors

4.3.11.2 Selecting Materials Handling Equipment

xlvii
  What requirements are imposed by the nature and types of goods to be handled?
 What requirements or constraints should be considered in respect of the warehouse?
 What is the cost-effectiveness of using different types of handling equipment?
 What quantity of material will be handled?
 What loading distances have to be travelled (horizontal and vertical)?
 Does the use of certain types of equipment enhance safety within the operation?
 What activities are taking place in adjacent areas?
 What flexibility is required?

4.3.12 Stock Records

4.3.12.1 Reasons for maintaining stock records
 To indicate the quantity of any item without the need to perform a time-consuming physical
count.
 To indicate when new supplies should be ordered or manufactured.
 To act as a check on physical stock levels.
 To record the locations where items of stock are held.
 To provide financial information, eg for use in pricing or for preparing periodic financial
statements.

4.3.12.2 Advantages of a good coding system

 It avoids repeated use of long descriptive titles.
 It accurately identifies all items.
 It prevents duplication of items.
 It assists standardisation and variety reduction.
 It provides a foundation for an efficient purchasing organisation.
 It forms a convenient basis for sorting and recording of documents.
 It simplifies recording.
 It is convenient for central analysis of unit storehouse records.
 It can be employed as a basis for stock control accounts.
 It may be used as a warehouse location system.

4.3.12.3 Principles for developing Coding System

 It must be capable of covering all items likely to be used, not only now but also in the future.
 It must be designed to suit the needs of the organisation.
 It must allow for expansion without duplication occurring.
 Each item must appear only once and the system must be designed to ensure this occurs.
 There must be a constant number of symbols or digits in all code references.
 Each group of symbols and/or digits must signify only one object.

xlviii
  Descriptions and specifications on which the system is based should be as brief as possible
while maintaining accuracy.

4.3.13 Considerations in a stock management policy

 Customer service levels required
 Nature of the relationship with suppliers (eg strategic; building the supply chain; adversarial;
getting the best value for the organisation, etc).
 Financial constraints
 Stock investment
 Nature and type of goods
 Competitive considerations

4.3.14 Obsolete and redundant stock

4.3.14.1 Definition
 Obsolete stock is stock that has become outdated and is no longer appropriate for current
requirements.
 Redundant stock is stock that is excess to foreseeable requirements. Redundant stock can arise
from over-ordering or because of a failure to react appropriately to a decline in demand for the
item.

4.3.14.2 Minimising obsolescence and redundancy

 Ensuring that patterns of demand are monitored continually so that stockholding policies can
be modified in line with changes at an early stage.
 Ensuring that there is regular communication between purchasing and other functions.
 Maintaining stocks as low as is practicable on items that are liable to become obsolete.
 Ensuring that required items are on hand at the time they are needed or not much earlier.
 Instigating regular checks on stockholdings.

4.3.15 Security issues in warehouse layout

 The total number of doors.
 Containers, skips or waste bins should be placed away from doors.
 Cargo is at its greatest risk when being loaded and unloaded.
 Toilets and rest areas should be positioned so as to ensure that drivers do not enter into the
body of the warehouse.
 Employee parking should not be too accessible to employees who wish to steal inventory.
 Use warehouse equipment that secures areas.
 The use of night patrols and guard dogs can enhance the security of premises.

xlix
4.3.16 Safety Areas in Stores
4.3.16.1 Four safety areas in stores and distribution
 Physical distribution
 Working areas
 Forklift trucks
 Racking

4.3.16.2 Internal and External Theft Risks

Internal risks including the following:
 Possible break-in to stores.
 Theft by store staffs (either petty theft, or organized theft on a large scale)
 Deliberate miscounting of goods onto vehicles.

External risks include the following:

 Theft by delivery drivers, including possible collusion with external people
 Theft of vehicle (either from the company premises or at external locations)
 Hi-jacking of vehicle load
 Theft by external security guards.

4.3.17 Information Technology at Stores

4.3.17.1 Information at different levels of management
 Top-level management requires information for strategic and policy-planning decisions.
 Middle management requires information for tactical planning and decision-making.
 Supervisors require information for operational planning and control.
 Operators require information relating to deliveries, order processing, and enquiry response.

4.3.17.2 Characteristics of computerised warehouse management systems

 Accuracy by reducing errors inherent in manual clerical recording, and by reducing or
eliminating altogether the need for human data input or transfer
 The speed of data collection, processing and communication, including immediacy of
updating computer files and immediacy of information recall
 The facility for work planning and allocation of staff and equipment
 The reduction or elimination of clerical effort
 The ability to process and present information
 The ability to track goods as they move through a system
 The ability to work out present performance monitoring information
 Information visibility

l
4.3.17.3 The impact of IT in warehouse operations
 Radio frequency identification discs (RFID) allow for more information on products to be
captured by the stock management system.
 Electronic data interchange (EDI) allows the transfer of standardised or formatted data for
declarations to HM Customs & Excise or standard inter-company data and reports.
 Increased computing power, the internet and increased use of e-mails have also benefited
warehousing.

4.3.17.4 Benefits of ICT in Store Management

 Faster communications
 Information sharing
 Track and trace systems
 Telematics
 Direct ordering
 Streamlined administration
 Greater information gathering potential
 Closer links with suppliers and partners
 Inventory management

4.4 Present Store Performance at DESCO

4.4.1 General Information about different stores at DESCO
 A total number of 17 (seventeen) Stores are being located at DESCO to store different types of
goods and materials to be kept for usage as and when required.
 Central Store, headed by Manager (Store), is situated at Mirpur. Office of the Manager (Store)
is in the premise of Central Store and his duties and responsibilities are to coordinate the
activities of Central Store and other stores.
 Records of stores are being kept at Central Store.
 While designing the stores, standard best practice are not considered. While stores were built
on ad hoc basis to store the goods.
 DESCO‘s stores and spares stands 403 crore which is a major concern for DESCO
Management.
 KPIs are not set to improve the existing performance of Stores.

Table 4.1: Store Details of DESCO

Inaugurating
Sl. Description of Materials and Equipments
Store Name Year for
No that has been kept in respective Stores
Operation

1 Central Store, Mirpur 2003 Transformer and Transformer Accessories,

Conductor and Conductor Accessories, Pole

li
 Inaugurating
Sl. Description of Materials and Equipments
Store Name Year for
No that has been kept in respective Stores
Operation
and Poole Fittings, Service Cable Tools and
Equipment, Maintenance & Essential Spares
for Substation, Meter and Meter Accessories,
Disc Fitting, Sub-station Materials, insulator
etc.

2 Mirpur-12, DOHS 2003 500 mm2 Underground Cable, 11 KV ABC

3 Mirpur-12, Store Yard 2009 11 KV ABC

500 mm2 Cu and 185 mm2 Al & Cu
4 Agargaon Store Yard 2009
Underground Cable, Steel
5 Majar Road, Mirpur-01 2009 Hardware, Meter, Transmission Kit etc.

6 Mirpur-14, Store Yard 2009 AVR and Accessories

7 Bashundhara Grid 2009 500 mm2 Cu Underground Cable

8 Uttara Grid 2009 500 mm2 Cu Underground Cable

9 Uttara-12 Balur Math 2009 SPC Poles

10 Uttara-14 Store Yard 2004 Conductor, Power Transformer, Hardware

Dakshinkhan Substation 300 mm2 and 300 mm2 Cu Underground

11 2009
Store Yard Cable
Steel & SPC Pole, 500 mm2, 300 mm2,
12 Kaderia Math-01, Tongi 2009 185mm2 Cu & Al Underground Cable, 11
KV & 400V ABC
13 Kaderia Math-02, Tongi 2010 SPC Poles

Mill Gate, Substation-03,

14 2009 Three Phase Transformer
Tongi

15 Substation-01, Tongi 2009 Three Phase Transformer, Insulator

Auto Voltage Regulator, Conductor,
16 BISIC Substation, Tongi 2009
Hardware
17 Purbachol Store Yard 2009 SPC Poles

4.4.2 Organization and management of Stores

At present there is as such no responsibility, authority and delegation of personnel for Store
Management is clearly defined. No job descriptions were developed till date. Store Management also
deals with lack of adequate number of competent personnel. Store staffs have lack of basic skills
training on some of operational accuracy issues being currently encountered.

4.4.3 Store Management Strategy

Store Management has no specific objective and targets right now. There is no long term planning,
medium term planning and short term planning exists at store management. No key performance
indicators has been set yet to measure the day-to-day decision making to improve day -to-day store
performance.

lii
4.4.4 Store areas
Currently stores of DESCO have not that much capacity to allow the orderly storage of the various
categories of goods. Reception areas of stores are not well-designed and well-equipped to allow
vehicles of incoming goods. Sometimes items such as conductor and cables, transformers are not
separated from light/small items.

Most of the stores of DESCO premises are of one-storey building. Some store items such as
underground cable lines or over ground cable line are being kept inside the open space of stores. Again
while storing the goods, high-usage, medium-usage and low-usage items are not considered. There is as
such no storage plan to maximise store operations and to avoid inefficiencies. Regarding aisle space,
Store Management has no plan. Aisle space are not minimized within the constraints of the size, type
and turning circle of materials handling equipment. In addition, adequate ceiling height, durable and
sealed floor surfaces, adequate lighting facilities, well ventilated atmosphere are not maintained at
different stores of DESCO.

When it comes to standard warehouse layout, Store Management is unacquainted of the issue. They
just store the items when it comes to the stores. Traditional Shelves and racks are set at different stores
of DESCO. In this connection, world best practice shelves and racks are not considered. As far as
Material Handling Equipments is concerned, DESCO use manual handling equipment, forklift trucks
and boom trucks. Though the equipments are very old to use at.

4.4.5 Capital tied up in store

There is as such no long term, medium term and short term planning exists when it comes to managing
stores. That‘s why it has been observed that approximately 2,000 milion taka are tied up at store for the
following items:
Table 4.3: Capital tied up at Store

Stock Status as Projected

Description of materials Unit of February, Consumption for
2012 18 months

Conductor / Cable
AAC Wasp Insulated, 100sqmm km 1038.057 459.278
ACSR Dog (bare), 100sqmm km 1066.167 201.359
ACSR Merlin (bare), 170sqmm km 421.316 30.03
Stay wire /Guy wire, 50mm2 km 170.786 34.1
11KV Arial Bundle Conductor 3x120sq.mm +1x70sq.
km 109.682 6.23
mm.
400V Arial Bundle Conductor 3x 120 + 1x70 sq. m m. km 124.038 11.45
Linetap 7.30mm to 11.17mm no 405996 5899
Wedge Clamp no 79200 1000
Cable Kits
Bundle Conductors accessories

liii
 Stock Status as Projected
Description of materials Unit of February, Consumption for
2012 18 months

Large angle assembly set 11288 2288

Dead end assembly set 8403 1089
Wire grip come along no 258 58
Stainless steel strap km 85.283 5.555
Stainless steel bundles(buckles) no 155006 15322
11Kv Arial Bundle Conductor Accessories
Suspension Assembly set 3035 246
Dead End Tension Assembly set 1052 119
Double Tension Assembly. set 531 28
Insulated Overhead Line Jointing Assembly. set 109 9
Insulated Tee-Off Assembly/Cable Brunching set 109 9
Insulated Tee-Off Assembly with U/G Cable/Cable
set 109 9
Brunching
Overhead to Pole Mounted Transformer Assembly. set 659 59
Bind Cap no 1099 99
Plug in Termination set 318 18
Overhead Bundle Cable Collar no 10987 987
Plug in Tee-Off Termination set 328 28
400V Arial Bundle Conductor Accessories 0
Suspension/Small Angle Assembly no 5038 696
Insulated Tension Connector 120/120mm2 for Phase
no 9900 900
Conductor.
Insulated Service Tee-Off Connector 95-120/1-35mm2 no 61435 2185
Service Cables 0
BYA - 1x25 rm km 20 0
Pole 0
Steel pole 12 m 350 daN no 2342 661
SPC Pole 15m (C-type) no 1043 270
SPC Pole 12 m (B-type) no 3229 1219
12M 300 daN SPC Pole no 7117 1890
12M 400 daN SPC Pole no 1502 237
Pole fittings 0
Side Mount Bracket no 21749 10804
Nut, bolt with washer, 5/8"x2.5" no 64201 30913
Nut, bolt with washer, 10". no 23278 1022
Anchor Rod no 39056 10759
Anchor plate no 38946 10639
Guy Thimble no 74957 18157
Extension strap for guy no 37923 8003
Earthing Rod no 15906 2654
Half stud clamp no 49315 0

liv
 Stock Status as Projected
Description of materials Unit of February, Consumption for
2012 18 months

Full Band no 17850 1511

12" Nut & Bolt no 23176 1624
Insulator
11kv Pin Insulator with Pin no 44554 19190

DESCO could not able to generate much better because of the following reasons:
 Excess holding stocks
 Some of the materials are obsolete, damaged and of no use.
 Opportunity costs.
 Lack of long term, medium term and short term planning at stores
 No link between procurement activities and store activities

4.4.6 Coding System of Store at DESCO

Coding System exists at store management. But it is not effective at all. The only utilization of Coding
System of stock item is to understand the updates of stores. This existing coding system is not
comprehensive and therefore Store Management could not get full benefit of it. Coding system
principles were not maintained. That‘s why when an new item appears, Store Management sometimes
fail to locate the right code.

4.4.7 Security Details at DESCO

As the goods kept at Stores are high value in nature, there is a wide range of potential theft
opportunities both internal and external to DESCO. But proactive security measures are not
prevailing at DESCO which is a major concern. Security risks are not assessed carefully.
Consequently prevention policy has not been developed yet regarding security issues.

Table 4.2: Security Details of DESCO

Security Guards
Sl. External Security
Store Name
No Internal Security Guards Guards (from ISS
Security Guards
01 nos Security Guard. However,
Central Store is the main office
1 Central Store, Mirpur for Store Management where 07 nos
Manager and others staffs are
deployed
2 Mirpur-12, DOHS Nil 02 nos
3 Mirpur-12, Store Yard Nil Nil
4 Agargaon Store Yard Nil Nil
5 Majar Road, Mirpur-01 Nil 05 nos
6 Mirpur-14, Store Yard Nil
Security Guards of Bashundhara
7 Bashundhara Grid Grid are advised to look after the Nil
store items

lv
 Security Guards of Uttara Grid
8 Uttara Grid are advised to look after the store Nil
items
9 Uttara-12 Balur Math Nil Nil
10 Uttara-14 Store Yard Nil 03 nos
Security Guards of Dakshinkhan
11 Dakshinkhan Substation Store Yard Substation are advised to look Nil
after the store items
An Office Assistant is deployed
12 Kaderia Math-01, Tongi to supervise the external security 12 nos
guards
An Office Assistant is deployed
13 Kaderia Math-02, Tongi to supervise the external security 04 nos
guards
14 Mill Gate, Substation-03, Tongi 03 nos 04 nos
15 Substation-01, Tongi Nil Nil
Security Guards of BISIC
16 BISIC Substation, Tongi Substation are advised to look Nil
after the store items
17 Purbachol Store Yard Nil 04 nos

4.4.8 ICT and its function

Only officers of stores have the access to use internet. Tally software is being operated at stores with
inadequate information. Therefore, store management has limited access of modern ICT blessings to
operate more efficiently and effectively. In addition to that some of the staffs are not efficient in using
computer and tally software which is indeed a major concern for store management.

CHAPTER-5

ANALYSIS OF
THE RESULTS

lvi
5.1 Foreword
This chapter includes the analyzed result and discussions on the findings of existing performance of
DESCO Store Management and discussions on how the respondents assess the existing system of store
management

5.2 Characteristics of the respondents

To conduct the survey, the questionnaires were distributed among 30 respondents. Out of 30, a total of
24 questionnaires were returned from the respondents in which 2 were left blank or partially filled up,
which were screened out for analysis. Finally, a total of 30 completely filled-up questionnaires have
been considered for further analysis. The overall response rate is 80%, which is quite satisfactory. As
the sampling was chosen through convenient sampling method and the survey was done by the
researcher through self-administered process, the response rate is quite satisfactory. Respondents are
direct employee of the Company and have direct communication with the researcher and they also have
much interest in improving the existing performance of Store Management. The respondents profile
can be seen at a glance below:

Table-5.1: Respondents’ Profile

No. of % of total Total effective

Particulars Variables
respondents respondents participants
MD/Directors 1 4%
DGM to GM 5 21%
Position 24
AM to Manager 14 58%
Service Staffs 4 17%
Male 23 96%
Sex 24
Female 1 4%
More than 10 years 4 17%
Length of 3 to 10 years 16 67% 24
service Below 3 years 4 17%
Post Graduate 17 71%
Education Graduate 6 25% 24
Below Graduate 1 4%
Above 45 years 6 25%
Age Group 30 to 44 years 15 63% 24
Below 30 years 3 12%

5.3 Respondents views on General Perception and attitude of Store Management

It has been observed from the respondents‘ view that in general the performance of existing store
management is not that much satisfactory. Many of the respondents give their opine of Store
Management of DESCO as bureaucratic, take more time to get the jobs done, not running up to the
mark, less skilled people are working here, no vision at all for Store Management etc.

lvii
It is found that coordination is absent among different divisions and departments to get the
jobs done smoothly and without hindrance and therefore store management takes long time.
Again, as DESCO is a public limited company, employees blame organization‘s
"bureaucracy" on senior management. Existing structures discourage creativity and
innovation throughout the store management. Organizations bound by rigid controls also find
store management less able to adapt to changing conditions in the marketplace, industry or
legal environment.

Figure 5.1: General Perception and attitude of Store Management

4.5000
4.0000
3.5000
3.0000
2.5000
Mean
2.0000
1.5000
1.0000
0.5000
-
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e a en me nt s en kill
gg sd ucr m ge rtm
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c ern sa
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5.4 Respondents views on Objectives and Scope of DESCO’s Store Management

Effective supply chain management is all about delivering the right product in the right quantity and in
the right condition with the right documentation to the right place at the right time at the right price.
But according to the respondents‘ view, it is absent in existing system. Performance can not be
identified, measured and evaluated in quantifiable term in this system. Many of the respondents opine
Store Management of DESCO as loss centre.

From the table 5.3 it is found that functions of store management is not broad, other divisions
and departments are frequently getting interrupted service from store, objectives and scopes
are not specified in DESCO‘s policy properly. It is observed from the respondents‘ view that
as there is no clear cut objective and scope specified in DESCO‘s policy and procedures for
Store Management, it fails to quantify and specify its limit of works and it also fails to gain
the importance from other divisions and departments of DESCO.

Figure 5.2: Objectives and Scope of DESCO’s Store Management

lviii
5.5 Respondents views on evaluating strategic factors
Strategy requires the matching of resources to requirements. Storage and distribution require long-term
planning to be fully effective. Entire logistics design should be viewed as long term. Strategic plans
cannot always be made over a short time period. But according to the respondents‘ view, long term
planning is absent in existing system rather store works is done in ad hoc basis. Still now DESCO
Management don‘t take any initiative for short term, medium term and long term plan for improving
the performance of Store Management.

The word key performance indicator is not very familiar to the respondents as well as store related
people. Sometimes DESCO Management fails to monitor the performance of store management which
is a serious concern.

Figure 5.3: Evaluate the strategic factors affecting the choice of Store Management

lix
5.6 Respondents views on role and effects of different stores of DESCO
The role of the store management is far greater than just storage. Store management perform an
enhanced role within the logistics process and are an integral part of delivering service to the user end.
But according to the observation of the respondents‘, existing stores fail to fulfill the same. It is found
that building design is not allowing maximum flexibility and road access to distribute goods to
different divisions.

According to the respondents‘ view, existing stores neither have adequate lighting facilities nor have
efficient system of product identification. It is found that Store Management hardly understand the
importance of efficient material handling equipment and racking of stores. Again it has been observed
that the concept of high usage items, medium usage items and low usage items for storing the goods is
not well perceived by the respondents‘.

Figure 5.4: Appraise and evaluate the role and effects of different stores at DESCO

lx
 Mean

0.5
1.5
2.5
3.5

0
1
2
3
4

Building design of central stores and

other stores allow for maximum
flexibility and road access to distribute
goods to different divisions

Existing stores have adequate lighting

with natural light where possible,
adequate parking facilities and required
office space

Design and layout of different stores

use an efficient system of product
identification

Different stores use efficient material

handing equipment

Racking of stores are designed to

maximize the cubic capacity

Central Store and other stores act as an

effective collection and distribution point
for items of stock

Goods stored in different stores are

located as such that they could be
identified as high usage items, medium
usage items and low usage items

lxi
5.7 Respondents views on Inventory Management of DESCO
For efficient operation of the store management and to provide adequate controls over stock, an
efficient inventory management is essential. As far as Inventory Management is concerned, the
respondents‘ give their poor assessment. According to them stock records are not maintained properly.
In addition, respondents‘ don‘t consider store management factors such as ‗VALUE‘ and ‗USAGE‘ of
items to manage its inventory. It is found from respondents‘ view that demand analysis is precipitously
absent before stocking the goods at store and store management does not manage efficiently and
effectively obsolete stock and redundant stock.

It is found from respondents‘ view that demand analysis is precipitously absent before stocking the
goods at store and store management does not manage efficiently and effectively obsolete stock and
redundant stock.

Figure 5.5: Assess Inventory Management of DESCO

4.00

3.50
3.00

2.50

2.00 Mean
1.50

1.00
0.50

-
Can trace stock movements by an efficient
Stock records are maintained properly

Can regulate the level of stock for each item

Store Management manages efficiently and

Demand Analysis is done before stocking the
Store Management considers factors such as

Store Management can efficiently handle

effectively obsolete stock (outdated stock)
‘VALUE’ and ‘USAGE’ of items to manage its
so that stock outs and excess stocks are

and redundant stock (excess stock)

demand of different divisions

coding system

goods at store
avoided

inventory

lxii
5.8 Respondents views on Procurement Practice at DESCO
Procurement practice is very vital for improving store performance of DESCO. But as per
respondents‘ views, it is sometimes seen as cumbersome or bureaucratic. According to them it
sometimes fails to save time by not ensuring right solution to meet business needs. They also gave
opine that sometimes right price is not ensured as well as the process overlooks vital steps.

Figure 5.6: Procurement Practice at DESCO

It is found from the respondents‘ views that long term, midterm and short term planning is marginally
missing while categories of procurement are not always done beforehand of all purchases. In addition,
contract management before and after the procurement process need to improve in some significant
areas. Again respondents‘ gave their anxieties in maintaining link between procurement and store.

lxiii
5.9 Respondents views on security in different stores of DESCO
All goods have a value and are subject to criminal activity. Crimes against vehicles and property
continue to grow so distribution and warehousing staff must be fully aware of the security risk of their
products, transport and support equipment in order to take steps to guard against breaches of security.
But as far as security is concerned, respondents‘ give very harsh views.

Figure 5.7: Examine and analyse security in different stores of DESCO

3.3000
3.2000
3.1000
3.0000
2.9000 Mean
2.8000
2.7000
2.6000
2.5000
Store Management is concerned about

submit visitor’s personal belongingness

efficiently operates CCTV to secure its

references, History of personnel are

theft are being recorded and informed to

entering and sign out while leaving and

Employment records, verification of

Visitors are being monitored while they
security of allied vehicles, stores and

Any kind of pilferage, criminal activity,

Central Store and some big stores

There is a process of sign in while

top management of DESCO

scrutinized minutely
are in store premises
office premises
personnel.

According to the respondents‘ views, no strictly maintained security measures are being followed at
different stores of DESCO. Security measures like CCTV, employment records, verification of
references, history of personnel are not minutely maintained appropriately. In addition, record
management related to stores is also not sound at all.

5.10 Respondents views on health and safety and legal issues involved in Store Management
Safety within store management is an integral part of the operation. Safety is recognised as a priority.
However, respondents‘ don‘t think DESCO Management‘s concern on health and safety issues of store
staffs. According to them, Store Staffs are not properly trained and informed of safety issues at work
and Management is also not providing and maintaining a sound working environment that is safe and
without risk to health of its store staffs.

It seems that Store Management is not concerned as it should be the personal protective equipment like
helmets, gloves, eye protection, high visibility clothing, and safety footwear, safety harnesses as and
when required during working at stores. Sometimes legal issues of Store Management are also ignored
by top management. Again, importance of Safety Register is ignored by Store Management.

lxiv
 2.80
2.90
3.00
3.10
3.20
3.30
3.40
3.50
3.60
3.70
DESCO Management is concerned about the
health and safety issues of store staffs

Store staffs are informed, instructed and

trained of safety issues at work

DESCO Management provide and maintain a

sound working environment to its store staffs

Staffs of stores are using safety equipments

as and when required during working at stores

Safety Register are maintained to record when

any staffs are injured at stores

DESCO Management is concerned about the

legal issues of Store Management
Figure 5.8: Examine health and safety and legal issues involved in Store Management

lxv
Mean
5.11 Evaluate the use of information and Communication Technology at Central Store
Store Management personnel have greater demands placed on them than ever because of their role in
supply chains and their interface with the end user. To operate effectively, store management requires a
fast, flexible and accurate IT system to provide required information to any number of end users.
Respondents‘ don‘t think Store staffs can capture delivery information, record stock movements,
maintain stock balance, monitor utilization, track the movement of goods through the system, sort order
requirements through its IT system

All store related staffs are not getting Internet facilities. As far intranet is concerned, store staffs are
overlooked. Tally Software is practiced to see the stock updates but this software is not providing
information like recording and identifying damage, recording deterioration, stock rotation. Some of the
store staffs don‘t even operate computer aptly and therefore, speed of order entry and order processing
don‘t reduce lead time.

Figure 5.9: Evaluate the use of ICT at Central Store

3.5000

3.0000

2.5000

2.0000
Mean
1.5000

1.0000

0.5000

-
Store staffs are confident in using IT
informations through its IT system

IT system of Central Store enhances

IT system maintains stock integrity
intranet access to communicate
Store Staffs have internet and

processing and reduce lead-time

speed of order entry and order
Store staffs can capture all

software

lxvi
CHAPTER-6

CONCLUSION
&
RECOMMENDATIONS

lxvii
6.1 Introduction
DESCO‘s stores and spares stand almost two-fifth of the shareholder‘s equity. Yet top management of
DESCO give very little importance on Store Management. In recent days, physical storage and
distribution has crucial roles to play for the organisation and it can act as a profit centre for the
organisation. Till date Store Management is considered as cost centre by top management of DESCO.

This chapter includes the conclusions and recommendations that would help in improving the existing
performance of Store Management of DESCO.

6.2 Recommendations
This part of the thesis concludes the recommendations on main findings as following:

6.2.1 Organisation and management

There should be adequate number of competent personnel involved in all stages of Store Management.
A designated person or at least an Internal Security Guard should be appointed at each store. Individual
responsibilities should be clearly defined and understood by the individuals concerned and recorded as
written job descriptions. Certain activities may require special attention such as the supervision of
performance of activities, in accordance with company policy.

6.2.2 Personnel Management

The lack of basic skills training is undoubtedly partially responsible for some of operational accuracy
issues being currently encountered. A training needs analysis of store related staffs should be
undertaken. After that all personnel involved in store management (both internal and external staffs)
should be trained. Records of all trainings should be kept not only in Human Resource Management
but also in Store.

6.2.3 Store Management Strategy

Store Management of DESCO requires long-term planning to be fully effective. Planning should
include setting objectives, quantifying targets for achievement and communicating these targets to
others. This process incorporates selecting strategies, tactics, policies, programmes and procedures for
achieving the objectives.

DESCO Management should determine vision, mission and objectives of store management.
After that initiatives should be taken for short term, medium term and long term plan.

Strategic Planning of DESCO will take a longer time frame with a horizon of five years or more, and
will consider the longer-term allocation of resources and adopt a time frame where all resources are
variable. In Strategic Planning, the following issues will be examined:
o Number and location of stores
o Changes in transport mode
o Effective use of internet and intranet in store and required software
o Third party outsourcing

lxviii
 o Stockholding policy

Tactical Planning would consider a six-month to two-year timeframe, seeking to implement strategic
plans effectively. In Tactical Planning, the following issues need to be examined:
o Transport (Vehicles: type, numbers, size, configuration, routing, staffing)
o Warehouse (design, layout, space allocation, equipment)
o Administration/Information (Stock control and location, order processing and
procedures, monitoring implementation and support systems)

Operational Planning considers the day-to-day decision-making involved in storage and distribution.
Operations are controlled and monitored against expected standards and rules. Key Performance
Indicators (KPIs) should be set in the following areas to improve day-to-day store performance:
o Goods receipts and checking
o Order picking and packing
o Order Lead Time
o Stock Availability in the warehouse
o Percentage of Orders completed on time
o The value of order completed
o Customer Service

6.2.5 Safety Measures

Personnel working at Store Management should be given specific training to handle the goods and
conversant to store environment.

6.2.6 Security
Procedures and conditions of employment for external security guards must be designed and
administered to assist in minimizing the possibility of accessing unauthorized possession. In this regard
precautions must be taken to prevent unauthorized persons from entering storage areas.
Hence, CCTV should be hanged some of the stores after analysing its requirement. In addition, security
measures like employment records, verification of references, and history of personnel should be
minutely maintained. Besides, toilets and rest areas should be positioned so as to ensure that drivers do
not enter into inventory. Procedures should be place to ensure visitors in stores Sign In, Carry
Identification Tags, Visitors are monitored while their visiting and Sign out on leaving.

6.2.7 Premises, Warehousing and Storage

Storage areas of DESCO should be of sufficient capacity to allow the orderly storage of the various
categories goods. In this regard, store staffs should analyse and work for designing store areas to ensure
good storage conditions. In particular, store areas should be clean and dry and maintained within
acceptable temperature limits. Storage areas should be clean, and free from accumulated waste and
vermin. Storage areas should provide adequate lighting to enable all operations to be carried out
accurately and safely

lxix
Heavy items such as conductor and cables, transformers should be separated from light/small items. A
committee should form to analyse and determine high usage items, medium usage items and low usage
items of DESCO, to separate heavy items and light items, to determine optimum utilisation of storage
areas. DESCO Management might adopt “Inverter T” system (Figure: 4.5) in its stores to meet long-
term storage objectives.

A comprehensive survey of existing material handling equipment is recommended. After the survey,
DECO Store Management will get an overview of the requirement of how many equipments they need
to procure. Again defective vehicles and equipment should not be used, and should either be removed
or labelled as such.

6.2.8 Dispatch
Goods should only be distributed to persons or entities that are entitled to acquire such products in
terms of applicable legislation. Written proof of such authority must be obtained prior to the dispatch of
products to such person or entities. The dispatch and transport of goods should be commenced only
after the receipt of a valid delivery order or material replenishment plan which should be documented.
Written procedures for the dispatch of goods should be established. Such procedures should take into
account the nature of the goods, as well as any special precautions to be observed. Records for the
dispatch of goods should be prepared and should include at least the following information:
- Date of dispatch;
- Name and address of the entity responsible for the transportation
- Name, address and status of the users (e.g. department);
- Quantity of the goods
- Applicable transport and storage conditions; and
- A unique number to allow identification of the delivery order.
It is recommended that goods in transit must be accompanied by the authorised person (internal staffs)
of DESCO with appropriate documentation.

6.2.9 Use of ICT

The expanded store activity should be managed in an integrated manner as opposed to being viewed as
isolated components of activity. This can be managed by some extended features which need to be
added. Features like delivery information, record stock movements, maintain stock balance, monitor
utilization, track the movement of goods through the system, sort order requirements, recording and
identifying damage, recording deterioration, stock rotation may be included in the tally software or any
other advanced management software which can include such features.All store related staffs are not
getting Internet facilities. Store staffs should be covered by both internet and extranet facilities.
DESCO IT system should be integrated in such a way that it could generate document, automate
warehouse goods retrieval applications, generate automate report etc. As some of the staffs are not
efficient in using computer and tally software, they should be given necessary training.

lxx
6.2.10 Documentation
Documents, in particular instructions and procedures relating to any activity that could have an impact
on the quality of goods, should be designed, completed, reviewed and distributed with care. The title,
nature and purpose of each document should be clearly stated. The contents of documents should be
clear and unambiguous. Documents should be laid out in an orderly fashion and be easy to check. All
documents should be completed, approved, signed (as required) and dated by an appropriate authorized
person(s) and should not be changed without the necessary authorization. Documents should be
reviewed regularly and kept up to date. Where the records are generated and kept in electronic form,
their back-ups should, be available to prevent any accidental data loss.

6.2.11 Disposal of Goods

Damaged or obsolete goods of store should be appropriately identified and handled in accordance with
a procedure which involves at least the physical segregation of such goods in a dedicated area in order
to avoid confusion and prevent distribution until a decision has been taken by top management of
DESCO with regard to their disposition. The necessary assessment and decision regarding the
disposition of such goods must be taken by an authorized committee. The nature of goods, any special
storage conditions required, its condition and history and the time elapsed since it was issued, should
all be taken into account in this assessment. Goods should be destroyed where necessary in accordance
with international, national and local requirements regarding disposal of such goods, and with due
consideration to protection of the environment.

6.2.12 Implementing an effective coding system

Store Management of DESEO should introduce a new coding system. In this new coding system each
code should be unique and certain. Each item should have only one possible code number that can be
easily identified from the structure of the code. The coding system should be comprehensive and
flexible, ie it should be possible to identify a code number for every item. The coding system should be
capable of expanding to accommodate new items. The code should be as brief as possible, having
regard to the amount of detail needed in any analysis of items that may need to be performed. The
coding system should be centrally controlled. It should not be possible for individuals independently to
delete codes or add new codes to an existing system.

6.2.13Annual Procurement Plan

In order to minimize excess holding stock, it is recommended to implement a précised Annual
Procurement Policy at DESCO for all types of procurement beforehand of the financial year begins.
The Annual Procurement Policy should be in accordance with best practice as outlined in Public
Procurement Act-2006 and Public Procurement Regulation-2008.
Therefore, an annual procurement plan is prepared in Table 6.1 to link procurement activities with that
of stores. During preparation of the APP 2012-13, the followings have been taken into consideration:

lxxi
 o Store statement and stock level of store item(s) in DESCO‘s Central Store upto
February-2012.
o Consumption pattern of each store item(s) for the last 02(two) years.
o Relevant tender documents of last 05 (five) years to obtain necessary information.
o Tender proceedings of last 18 (eighteen) months to determine the projected
completion period.
o Requirements of each of the Departments and Divisions of DESCO.

The purpose of Annual Procurement Plan 2012-13 is to provide information about the purchase of
goods and services, type of procurement method, source of fund, estimated cost of the procurement,
expected time for tender float, tender evaluation, tentative time schedule for completion of contract and
some other graphical presentation of procurement process beforehand the actual procurement. If
Annual Procurement Plan is done every financial year then DESCO will be able to minimize capital
tied up, ensure better procurement practice and link their procurement activities with that of store.

lxxii
 Table 6.1: Annual Procurement Plan for the Financial Year
2012-13

Estimated
Description of Tentative
Sl. Procurement Type of Lot Source Approving Cost Award of
Procurement Completion
No Method Tender No of fund Authority (Million contract
Package Date
Tk)

Single
Procurement of Single Open
Stage DESCO December, March,
1 Phase Electronic Tendering DESCO 80.00
Two Board 2013 2013
KWHr Meter Method
Envelop
Design, supply,
Single Lot
installation and Open
Stage 1 DESCO January,
2 augmentation of 33/11 Tendering DESCO 1,770.00 July, 2014
Two Board 2013
KV Substations on Method Lot
Envelop
Turnkey Basis 2
Civil Construction Single
Open
works and interior re- Stage DESCO October,
3 Tendering DESCO 5.00 June, 2013
arrangement works in Two Management 2012
Method
Pallabi S&D Buildings Envelop
Procurement of 11 KV Lot
Single
Underground Cable Open 1
Stage DESCO January,
4 Line and 33 KV Tendering DESCO 1,959.62 July, 2013
Two Board 2013
Underground Cable Method Lot
Envelop
Line 2
Procurement of works Lot
Single
and services of Open A
Stage DESCO January, March,
5 Commercial Operation Tendering to DESCO 250.00
Two Board 2013 2015
and Support Services Method
Envelop Lot
(COSS)
Q
Single
Procurement of Open
Stage DESCO February,
6 Transformer Protection Tendering DESCO 17.10 June, 2013
Two Management 2013
Equipments Method
Envelop
Procurement of Three Single
Open
Phase Whole Current Stage DESCO February,
7 Tendering DESCO 20.00 April, 2013
Electronic KWHr Two Management 2013
Method
Meter Envelop
Single Lot
Procurement of Single Open 1
Stage DESCO February, August,
8 Phase and Three Phase Tendering DESCO 42.50
Two Lot Board 2013 2013
Transformers Method
Envelop 2
Civil Construction
works for extenstion of Single
Open
Aftabnagar 33/11 KV Stage DESCO December, August,
9 Tendering DESCO 10.00
Substation Control Two Management 2012 2013
Method
Building (2nd to 5th Envelop
Floor)
Single
Open
Procurement of HT Stage DESCO February,
10 Tendering DESCO 112.85 June, 2013
Metering Unit Two Board 2013
Method
Envelop
Civil Construction
Single
works and interior re- Open
Stage DESCO December, August,
11 arrangement works in Tendering DESCO 5.00
Two Management 2012 2013
Baridhara S&D Method
Envelop
Buildings

lxxiii
 Single Lot
Open
Procurement of 11 KV Stage 1 DESCO March, September,
12 Tendering DESCO 18.80
& 33 KV Cable Kits Two Lot Management 2013 2013
Method
Envelop 2
Procurement of 11 KV Single
Open
Switching Station at Stage DESCO April, October,
13 Tendering DESCO 4.50
Paikpara, Aftabnagar Two Management 2013 2013
Method
and BAT BC Envelop
Procurement of Power Single
Open
Transformer at Stage DESCO April, October,
14 Tendering DESCO 350.00
Baridhara SS Two Board 2013 2013
Method
Substation Envelop
Single
Open
Procurement of Cable Stage DESCO April, October,
15 Tendering DESCO 24.24
Accessories Two Board 2013 2013
Method
Envelop
Barua Land
Single
Development works Open
Stage DESCO February, October,
16 with construction of Tendering DESCO 20.00
Two Management 2013 2013
retaining and boundary Method
Envelop
wall
Consultancy services Single
Open
for design of Head Stage DESCO February,
17 Tendering DESCO 37.00 June, 2013
Office Complex at Two Board 2013
Method
Uttara Envelop
Single
Civil Construction Open
Stage DESCO February, March,
18 works of Agargaon Tendering DESCO 15.00
Two Management 2013 2014
Office Building Method
Envelop

Procurement of CNG Single

Open
Driven Rental Stage DESCO February, March,
19 Tendering DESCO 20.00
Microbus (for office Two Management 2013 2014
Method
usage) Envelop
Single
Civil Construction Open
Stage DESCO April, December,
20 works of Dakshinkhan Tendering DESCO 45.00
Two Board 2013 2013
Office Building Method
Envelop

Procurement of Single Lot

Open
Electricity Bill Format Stage 1 DESCO March,
21 Tendering DESCO 4.00 May, 2013
and Clearance Two Management 2013
Method
Certificate Envelop Lot
2
Procurement of Motor Single
Open
Vehicle (Sedan Car) Stage DESCO March,
22 Tendering DESCO 20.00 May, 2013
for DGM and S&D Two Management 2013
Method
Managers Envelop
Procurement of 400 Single Lot
Open
Volt CT Operated Stage 1 DESCO September,
23 Tendering DESCO 16.25 May, 2013
Metering Unit and Two Management 2013
Method Lot
Accessories Envelop
2
Single
Procurement of 01 Open
Stage DESCO April,
24 (one) nos of 4-wheel Tendering DESCO 20.00 June, 2014
Two Management 2013
drive jeep for Director Method
Envelop
Civil Construction Single
Open
works and interior re- Stage DESCO
25 Tendering DESCO 5.00 May, 2013 June, 2014
arrangement works in Two Management
Method
Uttara S&D Building Envelop
26 Procurement of meter Open Single DESCO DESCO 15.00 September, January,

lxxiv
 security seal Tendering Stage Management 2013 2014
Method Two
Envelop

Single Lot
Procurement of Open
Stage 1 DESCO September, March,
27 Preform, Cable Kits Tendering DESCO 17.23
Two Management 2013 2014
and Service Cables Method Lot
Envelop
2

Single Lot
Procurement of Single Open 1
Stage DESCO September, March,
28 Phase and Three Phase Tendering DESCO 42.50
Two Lot Management 2013 2014
Transformers Method
Envelop 2
Single
Procurement of Open
Stage DESCO October,
29 transformer Tendering DESCO 5.40 April, 2014
Two Management 2013
accessories Method
Envelop
Single
Procurement of Open
Stage DESCO October,
30 transformer repair Tendering DESCO 2.10 April, 2014
Two Management 2013
materials Method
Envelop
Single
Open
Procurement of Ring Stage DESCO October,
31 Tendering DESCO 47.00 April, 2014
Main Unit (RMU) Two Board 2013
Method
Envelop

Single
Procurement of Open
Stage DESCO October,
32 network and Tendering DESCO 6.56 June, 2013
Two Management 2013
networking accessories Method
Envelop

Single
Supply of 11KV Open
Stage DESCO November,
33 Capacitor Bank with Tendering DESCO 16.00 April,2014
Two Management 2013
accessories Method
Envelop
Request For
Single
Repair and Quotation/
Stage DESCO
34 maintenance works of Direct DESCO 2.00
Two Management
Central Store Sheds Procurement
Envelop
Method
Procurement of Direct DESCO
35 DESCO 4.80
Transformer Oil Procurement Management
Request For
Quotation/
Procurement of DESCO
36 Direct DESCO 3.69
Furniture/Fixtures Management
Procurement
Method
Request For
Procurement of Quotation/
DESCO
37 equipments for official Direct DESCO 7.52
Management
usage Procurement
Method
Request For
Procurement of Quotation/
DESCO
38 Computer and Direct DESCO 7.77
Management
Peripherals Procurement
Method
Request For
Quotation/
Procurement of DESCO
39 Direct DESCO 5.50
toner/catridge Management
Procurement
Method

lxxv
lxxvi
 Fig.6.1: Annual Procurement Plan for the Financial Year 2012-13 shown in Graphical Format

Sl.
Description of Procurement July Aug Sep Oct Nov Dec Jan, Feb Mar Apr May June
no Package 12 12 12 12 12 12 13 13 13 13 13 13

Procurement of Single Phase Preparation of document to Award Contract

1
Electronic KWHr Meter of contract Execution

Design, supply, installation

and augmentation of 33/11 Contract Execution (tentative
2 Invitation of Bid to Award of contract
KV Substations on Turnkey completion date is July, 2014)
Basis

Civil Construction works and

interior re-arrangement Invitation of Bid to
3 Contract Execution
works in Pallabi S&D Award of contract
Buildings

Procurement of 11 KV
Underground Cable Line and
4 Invitation of Bid to Award of contract Contract Execution
33 KV Underground Cable
Line

Procurement of works and

Contract Execution (Contract will
services of Commercial
5 Invitation of Bid to Award of contract be two years starting from
Operation and Support February, 2013 to January, 2015)
Services (COSS)
Docu
ment
Procurement of Transformer prepar Contract Execution (tentative date
6 ation Invitation of Bid to Award of contract
of completion is August, 2013)
Protection Equipments and
appro
val

Docu
ment
Procurement of Three Phase prepar
7 Whole Current Electronic ation Invitation of Bid to Award of contract Contract Execution
and
KWHr Meter appro
val

Docu
ment
Procurement of Single Phase prepar Contract Execution (tentative date
8 and Three Phase ation Invitation of Bid to Award of contract
of completion is August, 2013)
and
Transformers appro
val

Docu
Civil Construction works for ment
extenstion of Aftabnagar prepar Contract Execution (tentative date
9 ation Invitation of Bid to Award of contract
of completion is December, 2013)
33/11 KV Substation Control and
appro
Building (2nd to 5th Floor) val

Docu
ment
Procurement of HT Metering prepar
10 ation Invitation of Bid to Award of contract
Unit and
appro
val

Civil Construction works and Document Contract Execution

preparation (tentative date of
11 interior re-arrangement and
Invitation of Bid to Award of contract
completion is
works in Baridhara S&D approval August, 2013)

lxxvii
Sl.
Description of Procurement July Aug Sep Oct Nov Dec Jan, Feb Mar Apr May June
no Package 12 12 12 12 12 12 13 13 13 13 13 13
Buildings

Contract Execution
Document
Procurement of 11 KV & 33 (tentative date of
12 preparation and Invitation of Bid to Award of contract
KV Cable Kits completion is
approval
September, 2013)

Contract
Procurement of 11 KV Document Execution
Switching Station at preparatio (tentative date
13 Invitation of Bid to Award of contract
Paikpara, Aftabnagar and n and of completion
BAT BC approval is October,
2013)

Contract
Procurement of Power Document Execution
preparatio (tentative date
14 Transformer at Baridhara SS n and
Invitation of Bid to Award of contract
of completion
Substation approval is October,
2013)

Contract
Document Execution
Procurement of Cable preparatio (tentative date
15 Invitation of Bid to Award of contract
Accessories n and of completion
approval is October,
2013)

Barua Land Development Document Invitation of Bid

Contract Execution (tentative date
16 works with construction of preparation and to Award of
of completion is October, 2013)
retaining and boundary wall approval contract

Consultancy services for Document Invitation of Bid

17 design of Head Office preparation and to Award of Contract Execution
Complex at Uttara approval contract

Document
Invitation of Bid
Civil Construction works of preparatio Contract Execution (tentative date
18 to Award of
Agargaon Office Building n and of completion is March, 2014)
contract
approval

Procurement of CNG Driven Document Invitation of Bid Contract Execution

19 Rental Microbus (for office preparation and to Award of (tentative date of completion
usage) approval contract is October, 2013)

Document
Invitation of Bid Contract
Civil Construction works of preparatio
20 to Award of Execution (tentative date of
Dakshinkhan Office Building n and
contract completion is December,
approval
2013)

Procurement of Electricity Document Invitation

preparatio of Bid to Contract
21 Bill Format and Clearance n and Award of Execution
Certificate approval contract

Procurement of Motor Document

Invitation of Bid
preparatio Contract
22 Vehicle (Sedan Car) for n and
to Award of
Execution
DGM and S&D Managers contract
approval

lxxviii
Sl.
Description of Procurement July Aug Sep Oct Nov Dec Jan, Feb Mar Apr May June
no Package 12 12 12 12 12 12 13 13 13 13 13 13
Contract
Execution
Procurement of 400 Volt CT Document
(tentative
preparatio Invitation of Bid to Award of
23 Operated Metering Unit and n and contract
completion
Accessories date is
approval
September,
2013)

Contract
Execution
Procurement of 01 (one) nos Document
(tentative
preparatio Invitation of Bid to Award of
24 of 4-wheel drive jeep for n and contract
completion
Director date is
approval
September,
2013)

Civil Construction works and Document Invitation of Bid to Contract

preparatio Award of contract Execution
interior re-arrangement
25 n and (Completion
works in Uttara S&D approval will be
Building June,14)

Document Invitation of Bid to Award of

26
Procurement of meter preparatio contract (tentative date of
security seal n and completion is January, 2014 )
approval

Procurement of Preform, Document Invitation of Bid to Award of

preparatio contract (tentative date of
27 Cable Kits and Service n and completion is March, 2014)
Cables approval

Procurement of Single Phase Document Invitation of Bid to Award of

preparatio contract (tentative date of
28 and Three Phase n and completion is March, 2014)
Transformers approval

Document Invitation of Bid to Award

29
Procurement of transformer preparation and of contract (tentative date of
accessories approval completion is April, 2014)

Document Invitation of Bid to Award

30
Procurement of transformer preparation and of contract (tentative date of
repair materials approval completion is April, 2014)

Document Invitation of Bid to

preparation and Award of contract
Procurement of Ring Main
31 approval (tentative date of
Unit (RMU) completion is April,
2014)

Document Invitation of Bid to

preparatio Award of contract
Procurement of network and
32 n and (tentative date of
networking accessories approval completion is
October, 2013)

lxxix
Sl.
Description of Procurement July Aug Sep Oct Nov Dec Jan, Feb Mar Apr May June
no Package 12 12 12 12 12 12 13 13 13 13 13 13
Invitation of Bid to
Document
Award of contract
Supply of 11KV Capacitor preparatio
33 (tentative date of
Bank with accessories n and
completion is April,
approval
2014)

34
Repair and maintenance Painting and other civil works will be done in the
works of Central Store Sheds store buildings through RFQ within this time frame

35
Procurement of Transformer Transformer Oil will be procured round the financial year 2012-13 through DP from
Oil Governmet or Semi Government Organisation

Furniture/Fixtures (e.g., almirah, book shelf, chairs, tables, racks etc.) will be
Procurement of
36 procured round the financial year 2012-13 through RFQ or DP as deemed feasible for
Furniture/Fixtures DESCO

37
Procurement of equipments Office Equipments (e.g., fax machine, fire extinguishers etc.) will be procured round
for official usage the financial year 2012-13 through RFQ or DP as deemed feasible for DESCO

38
Procurement of Computer Office Equipments (e.g., printers, laptop, computer etc.) will be procured round the
and Peripherals financial year 2012-13 through RFQ or DP as deemed feasible for DESCO

39
Procurement of Toner/catridge will be procured round the financial year 2012-13 through RFQ or DP
toner/catridge as deemed feasible for DESCO

6.2.14 Recommended Sequence of Operation in a procurement/stores transaction of DESCO

Till now, no sequential process is maintained in procurement and store transactions of DESCO. But a
standard system should be developed to make the store and procurement function more effective. The
following figure describes a sequential process of how a procurement department and store
management of DESCO can perform together:
Figure 6.2: Sequence of operation of Procurement and Store Management of DESCO

Step 1: User (different divisions and department of DESCO) submits Requisition to Material
Planning & Stores Department (excepts stationeries, furniture, computer & computer peripherals
items)

˅
Step 2: Store is handed goods to user divisions and departments

˅
Step 3: A record of this issue is submitted to Material Planning, Clearing & Movement

˅
Step 4: Assuming that it is time to do so, a request to order is transmitted. Material Planning,
Clearing & Store Division will analyze this and then initiate the request order to Procurement,

lxxx
Inspection & Testing Division

˅
Step 5: Procurement, Inspection & Testing Division through appropriate procurement methods
procure the goods after having meticulous evaluation of the suppliers

˅
Step 6: Procured goods/equipments sent to Store

˅
Step 7: Record of receipt at store sent to Procurement, Inspection & Testing Division and Material
Planning, Clearing & Store

˅
Step 8: Submitted invoice by suppliers then forwarded to Finance & Accounts Division for checking
and verification before payment

lxxxi
6.3 Limitation and assumptions
During the research work several limitations were faced which ensures that there are scopes of further
study in this topic. The limitations and assumptions that were made during the research are mainly as
follows:
a) Prior to the start of the research, it was expected that some works relating this would be
undertaken but unfortunately that was not the case.
b) Time barrier did not permit to work in-depth for example it was not possible to visit all
stores, to interview all store related staffs etc.
c) It was not possible to collect more information of stores as record management of Stores
is not that much rich.
d) Finally, it was assumed that for the purpose of confidentiality, disclosure of names of the
interviewees has not been allowed by the interviewees.

6.4 Scope of Future Studies

This type of research work has not been previously undertaken in any departments of DESCO not in
Store Management. As a result, there are many scopes of further studies to fine tune the findings of this
research as well as open new areas of study:
a) Year wise study could be done to measure the differences the findings of the different
years.
b) A similar study could be done on other departments of DESCO.
c) A more holistic approach could be undertaken by incorporating all the process of store
management.

6.5 Conclusion
Store Management is an inseparable part of business of DESCO. If effectively planned, organised and
maintained, Store Management could keep safe custody of materials, their receipts, issues, and
accounting with the objective of efficiently and economically providing the right goods at the right
time whenever required in the right condition to all user departments. Store Management is now
regarded as a cost centre, but effective functioning of it could reverse the view to top management of
DESCO.

lxxxii
REFERENCE

BIBLIOGRAPHY
QUESTIONNAIRE
ANALYZED RESULTS

lxxxiii
 ANNEXURE-A
BIBLIOGRAPHY

1. Robert E. Mtitchell: (2007) The Store Manager

2. David Jessop, Alex Morrision (5th Edition): Storgage & Supply of Materials
3. Brenda Laurel(2003): Design Research: Methods and Perspectives
4. Central Procurement Technical Unit: (2006), Public Procurement Act-2006, IMED, Planning
Commission, Bangladesh
5. Central Procurement Technical Unit: (2008), Public Procurement Rules-2008, IMED,
Planning Commission, Bangladesh
6. Profex, A CIPS Profex Study Packs: (2011), Storage & Distribution
7. AlanRushion, John Oxley, Phil Croucher: (Second Edition), The Handbook of Logistics and
Distribution Management
8. Martin Christopher: (4th Edition), (Financial Times Series), Logistics and Supply Chain
Management
9. Michael H. Hugos: (Third Edition), Essentials of Supply Chain Management, Third Edition
10. James Martin: (2007), Lean six sigma for supply chain management: the 10-step solution
process
11. James A. Tompkins and Jerry D. Smith: (Second Edition), The Warehouse Management
Handbook
12. Kenneth B. Ackerman: (1997), Practical handbook of warehousing
13. Ernst F. Bolten: (1997), Managing time and space in the modern warehouse
14. Stuart Emmett: (2005)Excellence in warehouse management
15. Michael Ten Hompel, Thorsten Schmidt: (2006) Warehouse management:
16. Gwynne Richards: (2011) Warehouse Management
17. Roy L. Harmon: (1993) Reinventing the warehouse
18. Annual Report of DESCO for the Financial Year 2006, 2007, 2008, 2009, 2010 and 2011

lxxxiv
 ANNEXURE-B
QUESTIONNAIRE SURVEY

Dear Sir,

This voluntary questionnaire is part of a study being conducted on Improving Performance of Store
Management: A Case Study of Dhaka Electric Supply Company Limited (DESCO).The study looks
into details the existing operational performance of DESCO‘s Store Management. The purpose of this
dissertation is to find out possible ways in improving performance of Store Management of DESCO.

This questionnaire survey will be used as a part of the researcher‘s Top up Masters Programme in the
BRAC University, Bangladesh. This study is being conducted by Rashed Morshed MCIPS, Deputy
Manager under the direction of my Supervisor Mujahid Mohiuddin Babu, Lecturer, Institute of
Business Administration (IBA), Dhaka University, Dhaka. The questionnaire asks about the general
questions and issues on existing performance of Store Management of DESCO. Please answer the
questions from your experience. Your input is very valuable to improve the performance of existing
store performance of DESCO because only you can supply the required information. A copy of survey
result can be sent to you by e-mail at your request.

You will be highly praised and appreciated for spending your valuable time and effort to fulfil this
questionnaire. The questions mentioned in this questionnaire have retained no right or wrong answer.
On the basis of your perception, views and experience you are requested to select the most appropriate
answer for each question. You may find out irrelevancy or impertinency of some questions. However,
researcher would like to request to answer all the questions, because every question contains a specific
objective. In the case of your unwillingness to answer any question you are requested to continue to
answer the remaining questions.

Thank you in advance for your help, we do appreciate your time.

Sincerely yours

Rashed Morshed MCIPS

Batch: Fall, 2012, Program: MPSM
Student ID No: 12282001
IGS, BRAC University
E-mail:rashedgrambd@gmail.com

lxxxv
General Information of the respondents

1.1 Name of the Department

……………………………………………………………………………………...

1.2 Designation of the Officer

………………………………………………………………………………………

1.3 Working Experience (years)

…………………………………………………………………………………........

1.4 Educational Background

…………………………………………………………………………………........

NB: Please rate the following statements based on a Scale from 1-5, where 1 represents the “Least
Important” or “Strongly Disagree”; 5 represents the “Most Important” or “Strongly Agree”; and
select “N/A” if you are uncertain in rating a particular statement.

2.0 General Perception and attitude regarding Store Management of DESCO

General Perceptions 1 2 3 4 5
a) It‘s running good
b) Takes less time to get the jobs done
c) It is not bureaucratic
d) Every individuals of DESCO are very much concerned
about existing performance of Store Management.
e) Store Management is a asset for DESCO Management
f) Project, Procurement, Inspection & Testing and Store
Management has a coordination
g) DESCO has a vision for improving performance of
Store Management
h) Store Staffs are very skilled
3.0 Determine the Objectives and Scope of DESCO’s Store Management

Objective and Scope of Store Management 1 2 3 4 5

a) Ensures the supply and delivery of the right goods, to
the right place at the right time within acceptable cost
framework to the end users.
b) Performance can be identified, measured and evaluated
in quantifiable terms.
c) Works out for reducing cost of capital tied up in

lxxxvi
 inventories, obsolescence costs, deterioration costs,
warehousing costs etc.
d) Objectives is to support and simplify the supply chain
and to control total cost
e) It helps to increase profit of DESCO
f) Store Team can give input to Procurement & Contract
Division
g) Objectives and scopes are specified in DESCO‘s policy
and specific guidelines are made for Store Management
to direct the activities of Store and measure and
quantify the performance of Store Management
h) Reduces the time for getting a product from the Stores
to the respective department
i) Provide uninterrupted service to other divisions and
departments of DESCO
j) Functions of Store Management is only confined in
receiving, storing, order picking and despatch

4.0 Evaluate the strategic factors affecting the choice of Store Management

Strategic Factors 1 2 3 4 5 N/A

a) DESCO Management set objectives, quantifies
targets for achievement for Store Management.
b) Store Management Team can take the decision on
stock control, order processing, transport issues,
warehouse design and layout and many other
similar activities independently.
c) Initiatives has already been taken for short term,
medium term and long term planning for
improving the performance of Store Management
d) DESO Management monitors the performance of
Store Management
e) On a regular basis, strategic decisions (long term
decisions) are taken from board level.
f) Key Performance Indicators (KPI) are set to
measure the performance of Store Management

5.0 Appraise and evaluate the role and effects of different stores at DESCO

Role and effects of different stores 1 2 3 4 5 N/A

lxxxvii
a) Building design of central stores and other
stores allow for maximum flexibility and
road access to distribute goods to different
divisions
b) Existing stores have adequate lighting with
natural light where possible, adequate
parking facilities and required office space
c) Design and layout of different stores use an
efficient system of product identification
d) Different stores use efficient material
handing equipment
e) Racking of stores are designed to maximize
the cubic capacity
f) Central Store and other stores act as an
effective collection and distribution point
for items of stock
g) Goods stored in different stores are located
as such that they could be identified as high
usage items, medium usage items and low
usage items

6.0 Assess Inventory Management of DESCO

Inventory Management 1 2 3 4 5 N/A

a) Stock records are maintained properly
b) Can trace stock movements by an efficient
coding system
c) Can regulate the level of stock for each item
so that stock outs and excess stocks are
avoided
d) Store Management considers factors such
as ‗VALUE‘ and ‗USAGE‘ of items to
manage its inventory
e) Demand Analysis is done before stocking
the goods at store
f) Store Management manages efficiently and
effectively obsolete stock (outdated stock)
and redundant stock (excess stock)
g) Store Management can efficiently handle

lxxxviii
 demand of different divisions

7.0 Procurement Practice at DESCO

Procurement Practice 1 2 3 4 5 N/A

a) Decisions on procurement is mostly taken at
strategic level of the company
b) Categories of Procurement are done
beforehand of all purchases
c) Long term, medium term and short term
procurement planning exists at procurement
department
d) Cross functional team works takes place
during high value and medium value
purchases
e) Contract Management is done efficiently
and effectively before and after contract
signing with suppliers
f) Before taking any procurement decision,
store availability is always considered
g) Risk identification and risk assessment is
done before and after procurement
h) Before the starting of any procurement
process, requirements of suppliers and
concerns of user department are analysed
i) Link between procurement and store is
always ensured by DESCO Management.

lxxxix
Examine and analyse security in different stores of DESCO

Security Issues in different stores 1 2 3 4 5 N/A

a) Store Management is concerned about
security of allied vehicles, stores and
personnel.
b) Central Store and some big stores
efficiently operates CCTV to secure its
office premises
c) When a visitor visits any of the stores of
DESCO, there is a process of sign in while
entering and sign out while leaving and
submit visitor‘s personal belongingness
d) Visitors are being monitored while they are
in store premises
e) Employment records, verification of
references, History of personnel are
scrutinized minutely when any permanent
staff, temporary staff, driver or peon are
deployed at different stores of DESCO
f) Any kind of pilferage, criminal activity,
theft are being recorded and informed to top
management of DESCO

8.0 Examine health and safety and legal issues involved in Store Management

Health and safety and legal issues 1 2 3 4 5 N/A

a) DESCO Management is concerned about
the health and safety issues of store staffs
b) Store staffs are informed, instructed and
trained of safety issues at work
c) DESCO Management provide and maintain
a working environment that is safe and
without risk to health to its store staffs
d) Staffs of stores are using equipment like
safety helmets, gloves, eye protection, high
visibility clothing, safety footwear, safety
harnesses as and when required during
working at stores
e) Safety Register are maintained to record

xc
 when any staffs are being injured while
doing work at stores
f) DESCO Management is concerned about
the legal issues of Store Management

9.0 Evaluate the use of information and Communication Technology at Central Store

ICT and its usage at Central Sore 1 2 3 4 5 N/A

a) Store staffs can capture delivery
information, record stock movements,
maintain stock balance, monitor utilization,
track the movement of goods through the
system, sort order requirements through its
IT system
b) Staffs of stores have internet and intranet
access to communicate efficiently
c) The IT system also maintain stock integrity
by recording and identifying damage,
identifying loss, recording deterioration,
ensuring stock rotation
d) Store staffs are confident in using IT
software and communicate through internet
and intranet
e) IT system of Central Store enhances speed
of order entry and order processing and
reduce lead-time

End of questionnaire. Thank you for your valuable contribution

xci
 ANNEXURE-C
ANALYZED RESULTS

2.0 General Perception and attitude of Store Management

Sl. Particulars Min Max Mean Std. Dev

1 It‘s running good 2 5 3.2941 0.9196
2 Takes less time to get the jobs done 3 5 3.6471 0.7019
3 It is not bureaucratic 2 4 3.0000 0.8660
Every individuals of DESCO are very much
4 concerned about existing performance of Store 2 4 2.8235 0.8090
Management.
5 Store Management is a asset for DESCO Management 1 4 2.1765 1.0744
Project, Procurement, Inspection & Testing and Store
6 2 5 3.2353 1.0326
Management has a coordination
DESCO has a vision for improving performance of
7 3 5 3.9412 0.8269
Store Management
8 Store Staffs are very skilled 1 4 2.4375 1.0935

3.0 Objectives and Scope of DESCO’s Store Management

Sl. Particulars Min Max Mean Std. Dev

Ensures the supply and delivery of the right goods, to
1 the right place at the right time within acceptable cost 2 5 3.0000 0.8660
framework to the end users.
Performance can be identified, measured and
2 2 4 2.7647 0.6642
evaluated in quantifiable terms.
Works out for reducing cost of capital tied up in
3 inventories, obsolescence costs, deterioration costs, 2 4 3.4118 0.7123
warehousing costs etc.
Objectives is to support and simplify the supply
4 2 4 3.1176 0.6966
chain and to control total cost
5 It helps to increase profit of DESCO 1 4 2.1765 1.0744
Store Team can give input to Procurement &
6 2 5 3.4706 0.9432
Contract Division
No objectives and scopes specified in DESCO‘s
7 policy and no specific guidelines for Store 2 5 3.7059 1.1600
Management to direct the activities of Store and

xcii
Sl. Particulars Min Max Mean Std. Dev
measure and quantify the performance of Store
Management
8 Reduces the time for getting a product from the
2 5 2.6875 0.9465
Stores to the respective department
9 Provide uninterrupted service to other divisions and
1 5 2.9412 1.2485
departments of DESCO
Functions of Store Management is only confined in
10 1 5 2.8235 1.4678
receiving, storing, order picking and despatch

4.0 Evaluate the strategic factors affecting the choice of Store Management

Sl. Particulars Min Max Mean Std. Dev

DESCO Management set objectives, quantifies targets
1 2 4 2.8824 0.7812
for achievement for Store Management.
Store Management Team can take the decision on
stock control, order processing, transport issues,
2 2 5 3.5294 0.8745
warehouse design and layout and many other similar
activities independently.
Till date no initiatives has been taken for short term,
3 medium term and long term planning for improving 2 4 3.1176 0.8575
the performance of Store Management
DESO Management monitors the performance of Store
4 2 4 3.3529 0.7019
Management
On a regular basis, strategic decisions (long term
5 2 5 3.1765 0.8828
decisions) are taken from board level.
Key Performance Indicators (KPI) are set to measure
6 1 3 2.2353 0.9034
the performance of Store Management

5.0 Appraise and evaluate the role and effects of different stores at DESCO

Sl. Particulars Min Max Mean Std. Dev

Building design of central stores and other stores allow
1 for maximum flexibility and road access to distribute 2 5 3.176471 0.808957
goods to different divisions
Existing stores have adequate lighting with natural light
2 where possible, adequate parking facilities and required 2 5 3.294118 0.919559
office space

xciii
 Design and layout of different stores use an efficient
3 1 4 2.764706 1.20049
system of product identification
Different stores use efficient material handing
4 1 4 2.411765 1.175735
equipment
Racking of stores are designed to maximize the cubic
5 1 4 1.941176 1.144038
capacity
Central Store and other stores act as an effective
6 2 5 3.235294 1.032558
collection and distribution point for items of stock
Goods stored in different stores are located as such that
7 they could be identified as high usage items, medium 1 5 3.470588 1.545867
usage items and low usage items

xciv
6.0 Assess Inventory Management of DESCO

Sl. Particulars Min Max Mean Std. Dev

1 Stock records are maintained properly 3 5 3.24 0.66
2 Can trace stock movements by an efficient coding 1 5 3.24 1.39
system
3 Can regulate the level of stock for each item so that 1 4 3.00 1.22
stock outs and excess stocks are avoided
4 Store Management considers factors such as 1 4 2.59 1.18
‗VALUE‘ and ‗USAGE‘ of items to manage its
inventory
5 Demand Analysis is done before stocking the goods at 2 4 2.76 1.03
store
6 Store Management manages efficiently and effectively 2 5 3.71 0.99
obsolete stock (outdated stock) and redundant stock
(excess stock)
7 Store Management can efficiently handle demand of 1 4 3.35 1.54
different divisions

7.0 Examine and analyse security in different stores of DESCO

Sl. Particulars Min Max Mean Std. Dev

Store Management is concerned about security of
1 1 4 2.7647 1.0914
allied vehicles, stores and personnel.
Central Store and some big stores efficiently operates
2 1 5 2.9412 1.5601
CCTV to secure its office premises
When a visitor visits any of the stores of DESCO,
there is a process of sign in while entering and sign
3 1 4 2.8824 1.1663
out while leaving and submit visitor‘s personal
belongingness
Visitors are being monitored while they are in store
4 2 5 3.2353 1.0914
premises
Employment records, verification of references,
History of personnel are scrutinized minutely when
5 1 4 2.9412 1.2485
any permanent staff, temporary staff, driver or peon
are deployed at different stores of DESCO
Any kind of pilferage, criminal activity, theft are
6 being recorded and informed to top management of 1 4 3.0588 1.1974
DESCO

xcv
8.0 Procurement Practice at DESCO

Sl. Particulars Min Max Mean Std. Dev

Decisions on procurement is mostly taken at strategic
1 2 4 3.2941 0.9196
level of the company
Categories of Procurement are done beforehand of all
2 1 4 3.6471 0.7019
purchases
Long term, medium term and short term procurement
3 1 4 3.0000 0.8660
planning exists at procurement department
Cross functional team works takes place during high
4 1 3 2.8235 0.8090
value and medium value purchases
Contract Management is done efficiently and
5 effectively before and after contract signing with 1 4 2.1765 1.0744
suppliers
Before taking any procurement decision, store
6 2 4 3.2353 1.0326
availability is always considered
Risk identification and risk assessment is done before
7 1 4 2.9412 0.8269
and after procurement
Before the starting of any procurement process,
8 requirements of suppliers and concerns of user 1 4 2.4375 1.0935
department are analysed
Link between procurement and store is always
9 1 4 2.4375 1.0935
ensured by DESCO Management.

9.0 Examine health and safety and legal issues involved in Store Management

Sl. Particulars Min Max Mean Std. Dev

DESCO Management is concerned about the health
1 1 5 3.1176 1.3639
and safety issues of store staffs
Store staffs are informed, instructed and trained of
2 3 5 3.6471 0.7019
safety issues at work
DESCO Management provide and maintain a working
3 environment that is safe and without risk to health to 2 5 3.2353 0.9034
its store staffs
Staffs of stores are using equipment like safety
helmets, gloves, eye protection, high visibility
4 2 5 3.3529 0.8618
clothing, safety footwear, safety harnesses as and
when required during working at stores

xcvi
 Safety Register are maintained to record when any
5 1 3 2.2941 0.8489
staffs are being injured while doing work at stores
DESCO Management is concerned about the legal
6 2 5 3.4118 0.9393
issues of Store Management

10.0 Evaluate the use of ICT at Central Store

Sl. Particulars Min Max Mean Std. Dev

Store staffs can capture delivery information, record stock
movements, maintain stock balance, monitor utilization,
1 1 4 3.2941 1.2127
track the movement of goods through the system, sort
order requirements through its IT system
Staffs of stores have internet and intranet access to
2 1 4 2.9412 1.3906
communicate efficiently
The IT system also maintain stock integrity by recording
3 and identifying damage, identifying loss, recording 1 3 2.2353 0.9034
deterioration, ensuring stock rotation
Store staffs are confident in using IT software and
4 1 4 2.2353 1.0914
communicate through internet and intranet
IT system of Central Store enhances speed of order entry
5 1 4 2.7647 1.1472
and order processing and reduce lead-time

xcvii