Store Management & Codification

1. STORE MANAGEMENT &
CODIFICATION
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VARUN VENUGOPALAN
MD SAJID

2. Store Management: An Introduction
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 The term stores, storehouse, warehouse etc refer to the physical
place be it a building or a room etc. where materials components,
tools, equipment’s and other items are kept.
 Stores management is concerned with ensuring that all the activities
involved in storekeeping and stock control are carried out efficiently
and economically by those employed in the Store.

3. Function of Stores
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 Receive raw materials, components, tools, equipment’s and other items
and account for them.
 Provide adequate and proper storage and preservation to the various
items.
 Meet the demands of the consuming departments by proper issues and
account for the consumption.
 Minimize obsolescence, surplus and scrap through proper codification,
preservation and handling.
 Highlight stock accumulation, discrepancies and abnormal
consumption and effect control measures.
 Ensure good house keeping so that material handling, material
preservation, stocking, receipt and issue can be done adequately.
 Assist in verification and provide supporting information for effective
purchase action.

4. Relationship with other Departments
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 The Production Department
Stores Department must ensure that all items, materials and tools, as
well as spare parts for machinery, are always available for continuous,
uninterrupted production. Stores might also have responsibility for
quality control and for inspection.

5. Relationship with other Department
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 The Sales Department
Close liaison is necessary between the Sales and Stores Departments.
There is no value in Stores holding stocks of items which the Sales
Department cannot sell or items which Stores does not have. An
adequate information, based on forecasts of future sales and trends, is
required to assist in planning orders, setting stock levels, allocating
storage space, etc.

6. Relationship with other Departments
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 The Purchasing Department
Stores must keep Purchasing up to date with information about stock
levels, whilst Stores relies on Purchasing to buy all the items and
materials needed by the enterprise for its operations.
 The Maintenance or Engineering Department
This department relies on Stores to have available all the spare parts,
tools, equipment and materials required for maintenance. In return it
must supply full information to Stores of all long-term and short-term
maintenance plans and the items which will be needed.

7. Relationship with other Departments
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 The Accounts Department
This department requires information from Stores about the value of
stock held, about any damages or losses, about the receipt of items for
which payment has to be made, and about stock issued for various
operations, processes or contracts, etc.house

8. Codification
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 It is one of the functions of stores management.
 A process of representing each item by a number, the digit of which
indicates the group, the sub-group, the type and the dimension of the
item.
 Describes an item in short, thus avoiding long statement every time the
need to describe the item arises.

9. Objectives of Codification
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 Bringing all items together.
 Enable putting up of any future item in its proper place.
 Classify an item according to its characteristics.
 Give an unique code number to each item to avoid duplication
and ambiguity.
 Reveal excessive variety and promote standardization and
variety reduction.
 Establish a common language for the identification of an item.
 Fix essential parameters for specifying an item.
 Specify item as per national and international standards.
 Enable data processing and analysis.

10. Basis of codification
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 Who will be the user?
 To what use is the codification going to be put?
 What kind/degree of mechanization will be needed
to use the codification system?

11. Codification by Group Classification
 Based on ‘shape’ of items
 1. Wire
 2. Tubing
 3. Rod
 4. Bar
 5. Sheet
 6. strip

12. Methods of coding of materials
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 Alphabetical method
 Numerical method
 Alphabetical-cum-Numerical method

13. Alphabetical method
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In this method first alphabet letters are used for codification of each
category of materials. For example, steel wire is coded as SW or steam
coal is coded as SC etc.

14. Alphabetical-cum-Numerical method
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 In this method, a combination of these two methods is used for coding
of materials. For example, a steel wire of gauge 4mm quality A stored in
rack/bin No.22, is given the code number SW4A/22. Such a method
gives exact information than any of the above two methods.

15. Numerical method
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This method is used where materials accounting is to be mechanized by
use of punched cards or computers. For numerical coding a list is
prepared for various departments and allotting to each of them a
suitable number. The first two digits of the code number represent the
department for which the materials are meant and other two digits
state the name of material as mentioned in the standard list or
materials manual. For example, if code is 2341 it means Material No.41
[copper wire] is to be used in Department No.23.

16. Codification of Raw-Material
1 9 99 99
Raw-Material
Generic Group
e.g. Magnesite, Alumina
Sub-Generic Group
e.g.Fused Mag, Fire clay
Running Serial No.
e.g. 01

17. Codification of Generic Item
2 99 99 999
Item Type
e.g. Stores
Generic Group (00-70)
e.g. Bearing, Switchgear
Sub-Generic Group
e.g. Ball Bearing
Running Serial No.
e.g. 201

18. Codification of Drawing/ Part No. Item
2 99 99 999
Item Type
e.g. Stores, Service
Generic Group (80-98)
e.g. Casting, Fabricated
Sub-Generic Group
e.g. Equipment Code
Running Serial No.
e.g. 001

19. Codification of Capital Equipment
2 99 99 999
Item Type
e.g. Stores
Generic Group (99)
e.g. Capital Equipment
Equipment Class
e.g. Mixer, Press
Running Serial No.
e.g. 001

20. Codification of Service Items
3 9 99 999
Service Item
Type of Service
e.g.Transportation, AMC
Sub-Group
e.g. Truck Load, Trailor
Running Serial No.
e.g. 001

21. Codification of Secondary Products
4 9 99 99
Secondary Products
Major Group
Mining Pdt, Metal Scrap
Sub-Group
e.g. Clay, Ferrous Scrap
Running Serial No.
e.g. 01

22. Advantages of Codification
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It enables systematic grouping of similar items and avoids confusion
caused by long description of items since standardization of names is
achieved through codification, it serves as the starting point of
simplification and standardization. It helps in avoiding duplication of
items and results

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