All the major procurements are routed through the Head Office (HO).
Construction materials available locally are procured at site with prior approval from owner and consultant.
All procurements are made against site approved indents.
Purchasing is done using Oracle based ERP (Enterprise Resource Planning) System.
All Purchase requisitions and orders are formulated and approved online in this system.
A requisition is mandatory for all purchases routed through the purchase department at HO.
Every item purchased has its individual code for its identification.
The Purchase officer automatically gets assigned to requisition lines in the ERP system based on the item code for codified items.
For non codified items, the Purchase officer may enter the requisition manually.
Local purchases are made and approved at site. This is done on the system by creating a purchase order.
The authority for the approval of any purchase order is set in the ERP system.
A Purchase order is mandatory for all purchases with a particular value of over Say Rs. 5000/- and for all items that need to be stocked.
The indent for the consumable materials is raised by the user or the planning department, looking at the stocks available.
This indent is then sent to the stores where the Store-in-charge checks for the availability of the materials in the store.
if the material is not available in the store then the Store-in-charge sends the indent to the Project Manager for approval.
This is then forwarded to the purchase department.
The purchase department looks into the vendor list based on experience of past projects and invites quotations from various vendors.
The quotations sent by the vendors are examined and a comparative statement is made.
Based on the comparative statement, the selection of vendor for the particular material is done.
While receiving the material, a gate entry is first made at the security cabin. The vehicle carrying the material is then allowed inside the site premises.
A gate entry is then made at the security cabin.
The store then receives the material. The record of this is maintained on a daily basis in the Daily Material Receipt Register (DMRR).
The received material is then entered into the ERP system.
Flow Chart showing procurement at site
Indent for consumables raised by user department or the planning department
Indent send to stores to check the availability of materials Requisition done through ERP system Material available The store in-charge sends the approval to the Project Manager Indent forwarded to purchase department Purchase department invites quotation from vendors Comparative statements of quotations made Selection of vendor Ordering of Material from Selected Vendor if no Code is entered in ERP system for purchase order Purchase order send to HO for approval
Procurement of Free Issue Material i.e. Owner supplied Material
The dates for procurement and receiving of free issue are fixed at the start of the project.
The owner issues notification to the contractor to receive the free issue material according to these dates.
Invoice copies are made by the work contractor showing the requirement of the material.
For free issue materials, the work contractor does not place any purchase indents.
The planning in-charge prepares an item wise Material Issue Voucher and submits it to the Managing Contractor for withdrawal of material.
The Work Contractor (WC) advises the Management Contractor (MC) about the receipt of material and the certificate after the material is received on site.
After the receipt of the materials, the work contractor inspects the material.
The work contractor’s Material Controller along with the MC’s Material controller check the materials against the packing list, purchase order etc. for item conformation, quantity and visual damages.
The following records are made
Goods Receiving Report (GRR)
Over / Short Supply, Damage (OSD) and Non-Conformance Material Report (if applicable)
The OSD report is made if the quantity received is more or the material received is defective.
WC’s Material Controller then informs the WC’s QC (Quality Controller) for quality inspection.
WC’s QC raises an RFI (Request for Inspection) to MC’s QC.
WC’s QC along with MC’s QC then carry out receipt inspection to verify that the material is confirming to purchase specification requirements, all traceability, Test Certificates etc are available and are complying.
The observations of the WC’s QC and MC’s QC are recorded in “Receipt Inspection of Materials”.
In case of any non conformity, the WC’s QC informs the MC’s QC for further actions and decisions.
The WC along with the MC jointly inspect all materials for any defects, damages, and shortages and check the bills of material, certificates, and documents for any errors and issue Over, Shortage and Damage (OSD).
Stores Management Role of Store Section in Stores Management
The Store Section maintains a proper and up-to-date record of all material received and issued at site.
The Stores also ensures proper stocking, stacking and preservation of material.
It shall see to it that the material stored is easy to retrieve to prevent damage and deterioration.
Storage and Issue shall be done as per First-In-First-Out (FIFO) System, i.e. the material that has been procured first will be used up first.
The Store-in-charge receives, provides identification and ensures traceability, if applicable, of all materials in the stores.
If the material procured is not for immediate use, then the Store-in-charge ensures that the material is stored in a suitable environment and maintained during storage to prevent loss, damage, or degradation.
The test / batch certificates of all materials are received along with the material and are forwarded to the Quality Control Section at site.
Material receipt record is maintained in the Daily Material Receipt Format.
For all goods received, stores must prepare Material Receipt Note (MRN).
Purchase order ( P.O) no. for which MRN is prepared must be filled in all MRN’s.
As acknowledgement of material receipt and acceptance, a stamp is provided on the back side of the vendor’s bill / challan .
The store record is maintained in a ledger and all issues are done through issue requisition only.
Any material is not allowed to go in or out of the store without a gate pass.
The Store-in-charge ensures that the material is not issued without proper authorization.
Store section ensures that a buffer stock of all critical and fast moving items like spares, consumables etc. is maintained and any problem being faced is brought to the notice of the Site-in-charge.
The minimum stock level of critical items is maintained as per the lists provided by the planning section.
The Store Section is authorized to raise a purchase indent in consultation with the Planning Section for maintaining the minimum stock level of critical items. A register is maintained showing the status of purchase indents.
The Store section also keeps in touch with the Procurement section for procurement of indented materials. The register showing the status of indented items is updated as soon as any material is received on site by them against their purchase indents.
The Store section inspects the condition of all stored materials having a shelf life periodically and takes preventive measures for such materials.
The records maintained by the stores are Daily Material Receipt ; Stock & Issue Record; and List of minimum stock levels of critical consumables (from planning section).
Flow chart for Receipt of Materials at site Material at gate Security checks delivery receipt/challan and put ‘IN’ stamp on DR/challan and noted in the register Security informs to store and QC Store checks challan/DR QC does the visual checks Material is accepted Store inform buyer Buyer/Store In-charge sends the material to vendor back Security puts ‘OUT’ stamp on challan/DR QC takes the sample for testing of physical properties Weigh the material at site/nearby place Transporter unloads the material Store enters in DMR and update in system Store issue the material and maintain the stock status Security puts ‘OUT’ stamp on challan / DR no Yes
Responsibilities of the Store-in-charge
The Store-in-charge should always be available in the store.
He should enforce proper control, keeping vigil on the stock, issues, discrepancies, abnormal consumption, accumulation of sub-standard inventory etc.
He should coordinate with the site execution team lead by the Construction Manager for smooth running of the project.
He should keep the Construction Manager (CM) updated with the position of all essential commodities so that the CM is able to take suitable action for restocking of items before they go out of stock and the work is hampered.
On receipt of authorised requisition, the required materials should be issued to the user section in the least possible time as possible.
Once in every month he should send the certified physical closing balances of holding stock to HO for comparing with the system balances and record.
Role of Planning Department (Section) in Store Management
The Planning Department on site also plays an important role in management of materials and stores.
The Planning Section ensures the availability of owner supplied materials and consumables after inspection and analyses the record of material consumed and balanced quantity. All record about the owner supplied materials is maintained by the planning section.
The planning section prepares an activity schedule, breaking activities into a micro level and deploys manpower, equipment, and consumables for completing the work in scheduled time.
It also prepares a list of minimum stock level for consumable materials and monitors the stock level against it.
A copy of this minimum stock level is sent to the store section for maintaining the level of such materials.
Daily status report of stock level is collected from the Store section.
The Planning section revises the minimum stock level from time to time and informs the Store section accordingly.
Organization chart for Store
PROJECT MANAGER STORE IN-CHARGE SR. SYSTEM IN-CHARGE SR. STORE KEEPER SYSTEM ASST. STORE KEEPER STORE KEEPER - 1 STORE KEEPER - 2 SR. STORE ASST. STORE
Format for Material Issue
Material Reconciliation is carried out at an interval of every 1 month period or at the completion of each task.
The Stores In-Charge prepares a statement showing item wise details of total receipted quantity, issued quantity and balance quantity if any, including scrap indicating their location.
A copy of this is submitted to the planning department.
The left over of the materials are offered for checking and inspection.
The surplus materials which are not required on site for any further activities are returned to the store by the user department.
These materials are recorded in the Material Return Record which is maintained by the stores department.
Material Controller prepares the actual material taken off against each drawing and upon receipt of material statement and reconciliation.
Ancillary consumption of steel and cement
to be taken into account while reconciliation.
Supporting arrangement for shutters
Sign board supports
Laps and chairs
Steel and cement testing
Casting yard construction.
‘ Inventory ’ means goods kept in stock.
It helps in smooth running of project, hence its control is necessary.
Excess stock will end the job in a loss (due to additional cost for storage, interest on capital, damage, insurance, watch and ward etc)
And less stock will hamper the progress of work, extra expenditure on emergency purchase, idling of plant and labour.
An inventory control system is a set of procedures that suggest when to reorder and how much to order.
Demand is assessed based on planning various construction activities. Replenishment of stock is based on study of pattern of issues and consumption.
We generally use the ABC analysis for inventory control. This analysis tends to segregate all items into three categories i.e. A,B,C on the basis of their usage value.
A class- usually 5 to 10 percent of total items amounting to 70 to 75 percent of money spent on materials. It will be dealt with by the site in-charge and also monitored by H.O.
B class- generally percent of total items amounting to 70 to 75 percent of money spent on materials. It will be monitored by site in-charge and store keeper.
C class- As many as70 to 80 percent of total items amounting to 10 to 15 percent of money spent on materials. It can be dealt by the store keeper alone.
The stock levels of A and B category items should be discussed in the site weekly meetings and corrective measures taken promptly.