STORE MANAGEMENT

SPARE PARTS

INTRODUCTION

Store management
Store keeping is primarily a service function in which the storekeeper acts as a guardian of all items kept in the stores. Store management should aim at providing these services as efficiently as possible with minimum possible cost. Store keeping is a function of receiving, storing and issue of raw materials, spare parts and tools etc. to the user department which have intended for the same.

Spare parts
Spare parts mean a part or a sub unit which is available in stock for substitution when needed. Some spare parts are provided as spare tools which are needed to carry out repairs or replace the parts which have failed. It makes the ready accessibility of the important material which provides efficient services to user. Spare part management demands special attention by plant manager and material manager since there is a need for efficient maintenance management to achieve higher productivity and better quality output.

NEED FOR SPARE PART MANAGEMENT

1.) Random and unpredictable pattern of failure of machines and equipments. 2.) Long lead time required for procurement of spare parts from original equipment manufacturers. 3.) High tendency for obsolescence of machines and equipments. 4.) Not economical to manufacture when requirement is small. 5.) Stock-out cost of spare part outweighs the total cost of carrying a spare part or even its purchase cost. 6.) Bank interest on borrowed capital for procurement of spare parts.

STORE MANAGEMENT PROCESS

Receiving of Materials. Storing of Materials. Stock verification and valuation. Controlling of Issue of materials. Store management function is very important in reference to storage and issue of spare parts because all the activities that are carried out in respect to spare parts, such as ordering and receiving of spare parts, storing of spare parts, verification and valuation of spare parts and dispatching them to various places, is based on the process of store keeping. Hence, we made our project on spare parts assuming these 4 steps in the process of store keeping as our primary plan, as to how the spare parts are stored and dealt with in an organization.

RECEIVING MATERIALS

Receiving of materials is the primary function in the Store Management. Even though receiving is clerical operation, it is important because at this stage the physical materials supplied by the vendors are verified with purchase order. Most problems or error in a purchase transaction can be detected during receiving operation. If the problems such as quantity shortage, damaged materials, incorrect items shipped, etc. are not detected at the receiving stage, it would be costly to correct the mistake later. The receiving report prepared upon receipt of a shipment details the materials actually received. It also contains information such as delivery timing shipment damage, rejection percentage, split shipment and so on. This document forms the basis for invoice payment, for continued negotiation with supplier and also for closing the purchase order. Hence, receiving operation at the receiving stage should be efficiently supervised by sufficient experienced and competent store executives.

RECEIVING PROCEDURE:
The steps involved in the receiving procedure are:
1)

Unloading and checking the consignment received: The container or packages received against the freight bill to ensure that the full containers or packages are received as per invoice. Unpacking and inspecting the materials: The receiving clerk or stores person checks the materials received against the suppliers packing slip and against a copy of the purchase order to verify the correctness of the item received. Next, the quantity of the shipment is verified in the same manner. Finally, the receiving stores person inspects the general condition of the material to determine whether any external damage was incurred during shipment. Completing the receiving report: The receiving stores person prepares an inspection cum receiving report in which the quantity of items received, the quantity accepted after inspection, the defect observes in the items that are rejected etc., are recorded.

2)

3)

STORING OF MATERIALS

After receiving the spare parts, they have to be store in a proper way to ensure efficient management. Storing of materials is a very important aspect of store keeping as well as spare part management as decides that in how much time the materials can be sent to various departments for actual work.

Identification of materials
Stores operation involves the physical aspects of materials handling and storage. The materials or spares are identified on two bases. (i) external use (ii) internal use The spare parts which are kept for sale outside the organization are identified as external use materials. The spare parts which are kept for use within the organization are identified as internal use materials.

Storing of materials
The benefits of good stores lay out and storage methods are: 1.) Ready accessibility, 2.) Efficient space utilization, 3.) Flexibility of arrangement, 4.) Reduced need for materials handling equipment, 5.) Minimization of deterioration of materials, 6.) Ease of physical counting. Before storing the materials, they are classified under various categories. For ex: branded goods, size, shape, texture etc.

Classification and codification

Classification and codification of materials means putting the various kinds of tools and spare parts under fewer names or titles. It is basically grouping of different types of spare parts. This is done in order to provide ease in finding a particular item in the store place.

Methods of storing
Where large quantities of materials are to be stocked, block storing is most effective. Block storing involves stocking of pallets or containers in rows such that each row contacts the adjacent row.

For small quantities, row stocking is preferable. Row stocking involves stocking of materials in rows with sufficient space between rows.

Automated warehousing
Highly sophisticated automated storage and retrieval systems with computer control system are used in modern stores. The storage facility is a high rise structure, constructed of open steel columns, configured into storage cubicles of different sizes and utilizes various types of standardized pallets and containers for storage.

STOCK VERIFICATION AND VALUATION

After the storing of the spare parts, next comes the timely verification and valuation of the spare parts stored in the warehouse.

Stock verification
No matter how diligently a storekeeper performs the custodial job or how carefully a ledger clerk maintains a record, some discrepancy between the actual and book balances of inventory is bound to occur. This is because the system is operated by people, and people do commit mistakes. For this reason, every inventory item should be physically counted and checked against its book balance.

There are 3 ways of conducting stock verification. 1.) Periodic verification or annual inventory In this type of stock verification, the stock is verified at the end of each year. This kind of verification is favourable when big or huge items are stored in the warehouse. 2.) Perpetual or continuous inventory In this type of verification, the company divides the stores in the beginning of each year, and depending on their functioning, each group conducts the verification of materials once in every week. 3.) Low point inventory In this type of verification, the companies take physical inventory check whenever the stock is the lowest.

Stock valuation
Stock valuation means knowing the current value of the stock or the spare parts stored in the warehouse. This is a function that a company performs regularly to know its current value of materials. This is very important because there are many factors such as depreciation, degeneration, loss due to theft, which leads to the fall in value of the materials, and a firm should be aware of it.

CONTROLLING OF ISSUE OF MATERIALS

After storage and verification of the spare parts, they have to be dispatched to the workplace as and when the order comes to release the materials. The following 4 steps are undertaken to issue the materials from the storing place:

Procurement orders
When the machinery at the factory site breaks down, then the company gives the order to release the spare parts from the warehouse to the factory site, so that the work can continue. Those orders are known as procurement orders.

Analyzing and getting information of spare parts

The orders are studied carefully. The materials in the storehouse are already codified and classified. The required materials or spare parts are looked up in the store place. The required spares are taken out and are made ready for dispatching.

Dispatching of spare parts

A final checking is done of the materials that are to be sent to the work place. Then the materials are packed in their respective boxes, and then sealed so that there is no chance of loosing those materials. The materials dispatched are entered in the companys record.

Transporting the materials to the factory

This is also an important function as a little delay in transporting the spare parts can result in a huge loss of work in turn resulting in a huge loss.

PROBLEMS DUE TO INEFFICIENT STOREKEEPING

1.) Need for more persons and equipments If the spare parts are not stored properly in the storing place, more people will be required to take care of the situation, and more equipments will be required to put things into order. 2.) Overstocking and the resulting cost If excess amount of spare parts are stored in the warehouse, first of all due to lack of space, there could be a problem of finding a particular thing, and moreover the maintenance cost will also increase. 3.) Inability of dispatching materials in time If the storing place is not designed properly or is very far from the actual working place, more time will be wasted in transporting the materials between the two places, which could result in loss of production. 4.) Difficulty in maintaining the spare parts. In the spare parts are not maintained properly, like if they are not oiled or checked regularly, it could lead to degeneration and depreciation of the materials. In short, spare parts are the life of every machinery, and they will only work well if they are stored and used properly.

GROUP NO. 2
GROUP MEMBERS
1.) Aditya Nagaraja 2.) Abhishek Chouhan 3.) Dheeraj Mehta 4.) Rahul Mishra 5.) Mohit Singh 6.) Neeraj Yadav Roll no. 01 Roll no. 11 Roll no. 34 Roll no. 38 Roll no. 42 Roll no. 51