JE W – Induction – Ph – II

13.0 Stores - GeM

OBJECTIVE OF PROCUREMENT
THROUGH STORE
Store Organization in Zonal Railways :
 Headquarters level
 Divisional level and
 Extra Divisional or District level in the form
of Stores Depots and Printing Presses.
Head-quarter level :-

At headquarters level, office of Controller

of Stores is responsible for both
coordinating various activities of stores
depots and divisional controller of stores
and also purchases.
Divisional level :-
Divisions have a Sr. Div. Controller of Stores or
Div. Controller of Stores who is to coordinate
with Controller of Stores to meet the material
requirements of his Division.
Depot level :-
The problems on Railways are more complex
than those of a manufacturing organizations.
There are thousands of indentors spread over a
large geographical area. The Railways
therefore, have to plan locations of the various
stores depots with care.
Procurement of Stores :-
This includes purchase of materials of required quality
and quantity at reasonable prices.
o This activity also includes development of sources of
supply with due emphasis to development of ancillary
industries, small scale industries and indigenous sources
for imported items (import substitution). This also
includes, maintaining constant touch with the market to
ensure steady flow of materials.
(b) Book & forms & stationary items :
Demands for these items are to be submitted in
prescribed printed forms (combined requisition
cum issue note.) Quantity demanded be as per
the Quantity sanctioned.
Normally 3/6 months requirement is issued at a
time. Demands not complied are to be taken as
canceled for future requirement
Functions of Stores Depot :
(a) Material Planning :-
(b) Procurement of Stores :-
(c) Receipt & Inspection of Stores :-
(d) Store Keeping :-
(e) Distribution of Stores :-
(f) Collection, accountal and disposal of scrap :-
(g ) Inventory Control :-
(h) Cost Reduction :-
 Classification Of Stores :

Stock Items Non-Stock Items

Frequently & regularly  Not purchased very often
required, usually in large
quantities
Unit cost justifies incurring  Can be converted as Stock
inventory carrying cost Item (to reduce the cost)
when often purchased.

Stocked in Depots and  Directly sent to the

distributed consignees/users.
 Classification Of Stores :
1. Ordinary stores
2. Emergency stores
3. Surplus stores
4. Special stores
1. Ordinary Stores : These are generally such items of
stores for which there is a regular turnover caused by a
constant demand. These may be further subdivided as
 New,

 Second hand

 Serviceable and

 Second hand repairable.

2. Emergency Stores :
o These items are not readily available in the market
and as such would require a long time for
procurement in case they are not stocked. These are
generally components of imported machines and
Rolling Stock.
 3. Surplus Stores
Surplus stores are those items which have not been
issued for the past 24 months and arise due to :
Due to Changes in design/specification etc. of the Stock
Items or stock items of stores which are no longer required
by the consuming departments.
Surplus Stores are classified as :
(1) MOVABLE SURPLUS
(2) DEAD SURPLUS
Stores Depot should take steps for their suitable and
speedy disposal.
 SURPLUS STORES
MOVABLE DEAD
SURPLUS STORES SURPLUS STORES
Stores items which have Stores items which have
NOT been issued for NOT been issued for
24 months but are 24 months and are NOT
EXPECTED to be likely to be utilised on
issued in the near any Railway within the
future. next two years.
4. Special Stores :
The items of stores arranged and stocked for
works and other special purposes i.e. other
than for operation or ordinary maintenance and
repairs are called "Special Stores".
Apart from above some other classifications as under are also
prevalent on Indian Railways.

1. Custody Stores :
These are stores which have been purchased for special works and
charged to such works but due to inadequate stocking facilities
available with
Other Classification Of Stores :
2. Imprest Stores :
Certain important units like loco sheds, train examining depots
etc. require a large number of items for day to day repairs,
maintenance and operation of rolling stock.
Imprest stores are standing advance of materials to meet the day
to day requirement of repairs maintenance and operation of
rolling stock etc. On most Railways the Imprest stores are
charged off to the final head of Account under revenue working
expenses. However, detailed A/c are maintained by these units
and monthly Imprest recoupment schedules are sent by the
Imprest holders to the nominated stores depots for bringing their
stocks to the Imprest level sanctioned.
 Classification of stores
(Based on annual usage value)
The stock items are classified into “A”, “B” and “C”
categories based on annual usage value. The value limit
fixed for categorising the stores varies every year.

Cumulative ANNUAL USAGE VALUE

Category Annual Usage fixed by Southern Railway
Value for 2010-11
A 70% Above Rs. 34 Lakhs
B 20% From Rs. 4 to 34 Lakhs
C 10% Below Rs. 4 Lakhs
 ANNUAL COST CUMMULATI VE
ITEM % ITEM COST %
ABC [Rs.] COST [Rs.]
1 90000 90000
10 % 70 %
A 2 50000 140000
3 20000 160000
N 4 7500 167500
20 % 20 %
A 5 7500 175000
6 5000 180000
L
7 4500 184500
Y 8 4000 188500

S 9 2750 191250
10 1750 193000
I 11 1500 194500

S 12 1500 196000
13 500 196500 10 %
70 %
14 500 197000
15 500 197500
WORK 16 500 198000
SHEET 17 500 198500
18 500 199000
19 500 199500
20 500 200000
 VED ANALYSIS
•Based on critical value & shortage cost of an item
– It is a subjective analysis.
• Items are classified into:
Vital: Shortage cannot be tolerated.
Essential: Shortage can be tolerated for a short period.
Desirable: Shortage will not adversely affect, but may be using more resources.
These must be strictly Scrutinized

V E D ITEM COST

A AV AE AD CATEGORY 1 10 70%

B BV BE BD CATEGORY 2 20 20%

C CV CE CD CATEGORY 3 70 10%
Accountal & disposal of stores
• DS8 Note
• RE9B
• Material transaction order
• Adjustment memo
• Stock verification reports,
• Disposal of Scrap & surplus stores,
• Overhauling of stores,
• Numerical ledgers & inventory control.
 DS-8 NOTE (form no. S- 1539)
The voucher prepared to transfer scrap to the depot or
material returned to stores is known as DS-8 NOTE.
It is prepared by scrap returning official in 6 copies.
It must be signed by consignee as well as the controlling
officer.
Details- consignee code, allocation number, P L numer,
description and quantity of material, rate,unit .
Ist copy- office copy of material sender depot.
IInd associated account , IIIrd issue voucher & IVth
receipt copy kept by depot-copies should be sent along
with material.
Vth copy – to depot account.
VIth copy- to division office.(to issuing official)
 PROCEDURE FOR RETURNED STORES
 The Class-I materials so returned should be valued by the Depot
Officer at the BOOK RATES.
 The scrap materials, so returned, should be valued at the rates
given in the Schedule of Scrap (which is updated by the COS
frequently with reference to the average prices realized at recent
Auction Sales etc.) and fed into the Computer.
 For condemned Rolling Stock and Scrapped Track materials, the
DS-8 Voucher is retained by the DMS of the Stores Depot Ward, till
such time the Sale Issue Note is prepared.

 The DS-8 Voucher and the Sale Issue Note concerned are
simultaneously priced by the DMS before despatching to the
Computer Centre.
 RE-9B (REVENUE EXCHANGE BOOK)
cum adjustment memo
When material is supplied from one sub- ordinate/works/divison
to another the transaction is made on doccument called RE-9B.
It is prepared in six copies.
Details- name of office /workshop/divisionto whom material is
supplied, consignee code, allocation, P L numer, description
and quantity of material, sanction number of work,head of A/C to
which debit/credit .
Based on RE-9B tranfer voucher is prepared in the division
office for adjustment. It is supporting voucher to transfer
voucher.
 RETURNED STORES
Returned Stores may consist of :
 Surplus stores being balance of new materials
that have not been used on work.
 Stores released from works
 Tools & Plants no longer required and
 Scrap
All such materials should be RETURNED to a
nominated Stores Depot with an Advice Note of
Returned Stores in Form No.S-1539 (also known
as DS-8).
NUMERICAL LEDGER AND INVETORY CONTROL
Codification Of Stores :
oThree types of codification systems ;
 Fully significant,
 Semi-significant and
 Non-significant.
All the Railway materials have been classified in 76 `Major Groups' or 'Main
Groups' or groups. Each Major/main group (or groups) has been further
classified into several sub-groups. Great care has been taken to ensure that
groups and sub-groups do not overlap and the numbers have been allotted in a
meaningful order and also they are unique.
Each PL No. is sub-divided into 4 parts as under ;

90 35 058 3
Part A -- First Two Digits
Part B -- Third and fourth digit
Part C-- Fifth , Sixth and seventh digit
Part D-- Last digit
Part `A' consists of two digits representing the main group of stores
example main group is `90' which is for steel items.
Part `B' consists of two digits representing sub-group. sub-groups. Here
`35' is the sub-group which is for various sizes of Mild Steel Flats.
Part `C' consists of 3 digits and is the serial number of the item
example serial number is 58.
Part `D' consists of one digit which has a special significance with
reference to computerization. his is the check digit. This digit is unique
to a given number and is intended to check the integrity of the code
number.
 Inventory control

It means stocking adequate number and kind of stores,

so that the materials are available whenever required
and wherever required. Scientific inventory control
results in optimal balance
Functions of inventory control

•To provide maximum supply service, consistent

with maximum efficiency & optimum investment.

•To provide cushion between forecasted & actual

demand for a material
 Economic order of quantity
EOQ = Average Monthly Consumption X Lead Time [in
months] + Buffer Stock – Stock on hand

ECONOMIC ORDER OF
QUANTITY(EOQ)

PURCHASING CARRYING
COST COST
Inventory Turn Over Ratio =

(Total inventory balances in Rupees on 31st March)

-------------------------------------------------------------- * 100

(Total value of stores issued during the year)

The target for inventory turn over ratio is generally kept
around 15%. The efficiency with regards to service is
worked out by compiling compliance percentage of
materials against all requisitions received in Stores
Department. The target for compliance is kept between
95% to 98%. For vital and safety items, the compliance is
aimed at 100%.
NEW PROCURMENT PROCESS
1. GeM: REPLACING DGS&D
2. THROUGH IRPES
Government e-marketplace Procurement

Flow of Presentation
•Learning Objective 1: How to Login as
organisation/ Office and users on GeM
•Two Stages
•Step-1: Login as Organisation/Office
•Step-2: Login as Secondary Users

•Learning Objective 2:
How to procure Goods & Services on
GeM
Important Aspects of while procuring
on GeM portal
Parties in GeM
Buyer
Who can buy
How to register to buy
How to buy
Seller
Who can sell
How to register to sell
DGS&D
Role and responsibilities
 Each has its predefined role and responsibilities
Steps for Login as
Organisation/Office/HOD
Step1:Login to https://gem.gov.in
•Step2:Click on Login/Register Webpage
•Step3:Fill the required login credentials and Click
Login

Click LOGIN
 Steps to
Procurement
•Login as a Buyer
•Go to the Market option
•Select the required product category
•Narrow down your selection by providing details of
your requirement on three criteria
•Select the desired product and
proceed with purchase / adding to cart
 Administrative Filter

1. Put the administrative filter

2. Quantity required
3. Delivery Location
4. Year of experience with government
5. Supplier Rating
 Financial Filter

1. Put the financial filter

2. Product amount range
3. Annual turnover of the supplier
4. PMA-Value addition
5. Profit & Loss of supplier
 Product Description

Put the product technical

specification as per requirement of
buyer.
•As brand
•As model
•Processor etc
Important Note

•All filters applied by the buyer

at the selecting product always
remain on GeM and it may see
by the HOD means the buyer
have adequate justification as
per requisite quality.
The Purchase Process –141 A
•If the total purchase amount upto Rs.
50,000,
•If the total purchase amount
above Rs. 50,000
Purchase Process
1.When the purchase amount is Less
thanRs50,000:
•There is no need of doing comparison.
•Buyer can select any product as per their
specifications.
2.When the purchase amount is more
Than Rs50,000:
•It is mandatory to do comparison of the
products first.
•Buyer need to select the L1 product.
Purchase Options

1.Direct Purchase
2.Bidding
3.Reverse Auction
 Direct Purchase
For the purchases in the above condition:
•Go on product of screen and select
product at top of right for comparison of
products maximum upto four products.
•Select the product(s).
•If the amount is less than 50, 000 then buyer
can go

For any product.

•Add to cart.
 Direct
Purchase
And the same may“addtocart”by clicking on add to cart button.
•

GotocartandselecttheproductwhichneedtobepurchasedandDirectPurch
aseoption.
 Direct Purchase
•The total purchase price uptoRs. 50, 000 buyer may
go for direct purchase by clicking direct purchase
button.
•Demand generation page will be displayed on screen.
•Fill the required details and upload Financial Approval.
BUYER
Select DDO along
with Code
•Fill Grant No.
•Select Function Head
•Select Object Code
•Click On Block
Budget
By filling the required information press
submit button and OK to generate the
demand.
•After clicking of Ok button, demand no.
will be generated on screen and
notification will be sent to the HOD, and
Buyer.
Direct
Purchase•
•Go to main page and click on “manage product” menu and click
on demand/order list.
•Buyer will see different demand generated and click on process
button.
 Direct Purchase
•By clicking on process button, buyer will find the sanction order
page.
•Click on
Generate Sanction Order
 Direct Purchase
1.Fill OTP on required box and e-sign it.
2.Buyer may see e-signed sanction order.
3.There after,click on approve and generate contract.
BUYER
•These documents duly signed digitally (e-sign)
by the Buyer will be made available online to
the concerned DDO, PAO and Seller/Supplier.
•The DDO and PAO shall have access to the
Contract Agreement/Supply Order/Purchase
Order online In order to ensure that the Bill is
generated at the stage of payment in
accordance with the contractuall provisions.

An electronic signature,or e-signature, refers to data

in electronic form, which is logically associated with
other data in electronic form and which is used by
the signatory to sign.
 Direct Purchase

•After generating the contract, the

seller/supplier will dispatch the along with
the issue of online invoice on Gem portal.
•A invoice will be online available to the
buyer and DDO/PAO regarding invoice
cum bill.
•Then GeM portal will send a SMS/email
alert to the Buyer, on submission of
Invoice.
 Direct Purchase

•After intimation of invoice, consignee

needs to login.
•The Buyer/consignee receives the
Goods/Services and issues an online
Provisional Receipt Certificate(PRC),within
48hours,..\PRC. pdf
•It contains the details regarding:-
•Quantity received
•Date of receiving of consignment
Provisional Receipt Certificate (PRC)
 CONSIGNEE

•After verification Including assessment of

quality and quantity, the Consignee will Issue on-
line digitally signed Consignee's Receipt &
Acceptance Certificate(CRAC) for that stage
within 10 days of date of issue of PRC.
..\CRAC.pdf
•The CRAC would clearly indicate:
•the Order quantity
•rejected quantity (if any, with reasons for
rejection including shortages/damaged/un
accepted quality)
•quantity accepted and cleared for payment
Consignment Receipt and Acceptance
Certificate (CRAC)
•Notification regarding receiving of supplies
will be sent to buyer, consignee, HOD and
Supplier
 DDO
•After issuing PRC and CRAC, the in format
ionregarding receipt and acceptance of
goods has been sent to supplier on
GeMPortal.
•Now, DDO/PAO will login to process
payment.
•Login as PAO/DDO ,go to manage
products at the top.
•Under Manage Products select
Indent/Order list
•After selecting Indent/order list PAO/DDO will
navigate to the demand/order list.
•The latest demand generated will be displayed at the
top.
•Under the column Action, select Process
•After clicking on Process, payment authority
will be navigated to “bill processing by HOD”
page.
 Payment Process

PAO/DDO can have access to different

documents namely:
1.Financial Approval
2.Sanction order
3.Contract
4.Seller Invoice
5.Provisional Receipt Certificate
6.Consignee Receipt and Acceptance
Certificate
7.Buyer Bill process
 Payment Process•

•Click on Pay Using PFMS/SBI Payment gateway

at the below.
 If the total purchase amount above Rs
50,000
Bidding and Reverse Auction
•Bidding:-Bidding is an offer (often competitive) to set a price by an
individual or business for a product or service or a demand that
something be done. Bidding is used to determine the cost or value of
something.
•Reverse Auction: A reverse auction is a type of auction in which the
roles of buyer and seller are reversed. In a reverse auction ,the
sellers compete to obtain business from the buyer and prices will
typically decrease as the sellers under bid each other.
 Bidding

•If the buyer wants to participate in Bidding, then buyer

needs to select the L1product and “add to cart” by clicking
on add to cart button.
•After adding the product to the cart and selecting to
purchase, the buyer will have three options: Bidding, Reverse
Auction and Direct Purchase. Select “BIDDING”.
•Fill the required details:-
•Delivery days
•Mention the Bid start and end date.
•Quantity
•Extra specifications (ifneeded)
•Clickon “CREATEBID”
If the total purchase amount above Rs
50,000
For the purchases in the above condition:
•Go on product of screen and select product at
top right for comparison of products maximum
up to four products.
•Press compare button which shows on screen
and OK.
•Buyer will find a comparison sheet.
•At the end of the comparison sheet, GeMportal
will display the L1 to purchase amongst all the
available product so nGeMportal.
If the total purchase amount above Rs. 50,000
•And the same may “ add to cart ”by clicking on
add to cart button.
•Go to cart and select the product which need to
be purchased.
•The purchase price above Rs.50,000 then,
buyer has three options:
If the total purchase amount above Rs. 50,000 Reverse
Auction

•Select the products to purchase.

•GeM portal will suggest the L1 product.
•Add to cart
•After selecting the product in the cart, GeM
will give three options: Reverse Auction,
Bidding, Direct Purchase
•Click on Reverse Auction button
 Reverse Auction

•Fill the required details:-

•Delivery days
•Mention the RA start and end date.
•Quantity
•Step value decrement
•Extra specifications (if needed)
•Click on “Finalize RA”
•After clicking on “Create RA”, buyer will be navigated to
Reverse Auction Details page where details about RA and
product will be displayed.
•Accept the terms and conditions and Click on “FINALIZERA”