2. TRAINING OBJECTIVES
• Understand the principles of storekeeping and
inventory management
• Know the basic responsibilities of storekeepers
• Know the basic operational rules and activities in
warehousing
• Know and understand the importance of record
keeping in warehousing
• Know and understand the difference between bin-card
and stock record card
• Assess stock status at any given point to determine
how long supplies will last and also maintain inventory
control system
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3. STOREKEEPING
• Store is a secured or safe place where all kinds of
materials/products needed for production, packaging,
distribution, maintenance are received, stored and
issued to users as their need arises. Store/Warehouse
can be centralized or decentralized.
• Storekeeping is the process of handling and
maintaining materials/products in the store and in
good condition.
• Stock is referred to as the materials/products kept in
the store to facilitate smooth running of the business.
It is also referred to as inventory.
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4. OBJECTIVES OF EFFICIENT WAREHOUSE/STORE
OPERATIONS
• Provides timely and accurate customer
services.
• Keeps track of items so that they can be
correctly found ready at any time.
• Minimize the total physical effort.
• Provides communication link with customers.
• Always provides place to store and protect
inventories.
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5. COST OF OPERATING WAREHOUSE
• Capital costs: This includes cost of space and
materials handling equipment.
• Operating cost: This includes labor cost, and
it’s productivity is measured as the number of
units an operator can move in a day.
• Warehouse must operate to maximize use of
space, and effectively use labor and
equipment. Space is the largest capital cost
followed by materials handling equipment.
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6. WAREHOUSE ACTIVITIES
• Stock receipt
• Stock storage
• Stock issuance
• Stock record
• Stock control
• Stock taking
• Stock checking
• Stock identification and location
• Stock security and protection
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7. STOCK RECEIPT
• Receiving documents like waybill/delivery note, invoice are
necessary for the receipt of any stock into the warehouse.
• The receiving quantity on the waybill has to correspond with the
quantity on the invoice and also with physical receipt.
• The receiving stock has to be visually inspected and examined to
ensure the quality and integrity of the stock.
• Record the received stock on the stock card and also on the stock
inward register.
• Maintain and update the stock record card each time transaction
happens in the store, i.e. issuance and receipt.
• The stock card serves as a guide to inform you at any particular
point in time the quantity of different stocks (materials/products) in
your store without physically counting the stocks.
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8. STOCK STORAGE
• Stocks are expected to be stored in a tidy store under ideal
temperature and humidity conditions to prevent chemical damage
such as change in color or texture of the stocks.
• Stocks of lighter weight such as the sachet tomato brands are not to
be stacked above 5ft to prevent mechanical damage such as
crushing and squeezing of the stocks.
• Stocks are to be stacked one particular stock specification on pallets
and not on the floor to prevent contact with water and dirt.
• Stocks are to be stacked about 1ft away from the wall and also from
each of the stacks to offer cross ventilation and easy walk-around
access in the store.
• Stocks should be arranged in such a way that new stocks are moved
behind in the store and old stocks positioned to the front.
• Store has to be periodically fumigated to protect the stocks against
pests and rodents.
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9. STOCK ISSUANCE
• Stocks are to be issued on time and in full based on a duly signed
requisition note by authorized person.
• The issuing quantity should correspond with the requested quantity
on the requisition note/order, and should not in any way exceed for
any reason(s).
• Invoice and waybill have to be prepared for the issuing stock and
original copy of these documents have to be handed over to the
person requesting for the stock (customers).
• The issuing stock has to be issued based on first in first out (FIFO) or
first to expire first out (FEFO) basis as applicable at any given point
in time.
• The issuing stock has to be moved out with the aid of material
handling equipment and carefully stacked in a vehicle.
• The issuing stocks’ detailed information has to be updated on the
stock record cards (inventory control cards)
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10. STOCK RECORDS
• Proper stock keeping records for all stock
transactions must be maintained for each item in
stock showing the quantity on hand, quantity
received, quantity issued and location in the
warehouse.
• Stock keeping records include bin cards, inventory
control cards and stock ledgers.
• Actions are carried out on the afore-mentioned
documents each time transaction takes place
within the warehouse.
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11. BIN CARD AND STOCK CARD
• Bin card is similar to stock card but do not contain the
same information with that on the stock card.
• Bin card is a stock keeping record that contains detailed
information about a single product specification of the
same batch number (lot number), and it is usually
attached to the bin, pallet or stack of where the
product is located.
• Stock card (inventory control card) is a stock keeping
record that contains detailed information about a
single product specification of different batch number
(lot number), and it is usually maintained in a file.
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12. STOCK TAKE
• Stock take is physical counting of stocks to confirm that the physical
quantity of stock on hand correspond to the available quantity on
the stock cards, and it is called physical inventory count.
• Stock take also aimed at identifying obsolete and non-moving
stocks in the store, and to reveal any weakness within the system.
• Stock take can be classified into three;
Periodic stock take: This is performed at regular intervals either
quarterly, half yearly or yearly, and the store have to be close for
business during the exercise.
Continuous stock take (cycle count): This is counting fraction of the
whole stock every week or month and this action would be able to
count the entire stock within the year without disrupting the usual
business.
Spot-check: This involves walk-around inspection to glance at some
stocks to ascertain their quantities and physical conditions.
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13. ASSESSING STOCK STATUS
• It is necessary for store personnel to assess stock status at given
point in time to determine how long supplies will last.
• Proper consumption/sales record which is use to determine average
monthly consumption (AMC) of particular stock and it’s respective
stock on hand (SOH) are used to assess stock status and determine
how long particular supplies will last.
• Consumption/sales record for particular stock are computed
monthly, and average of immediate three (3) previous consecutive
months are calculated to determine the AMC.
• Stock on hand (SOH) is divided by the average monthly
consumption (AMC) to determine how long supplies will last in
months. Mathematically, SOH ÷ AMC = Months of stock on hand.
• It is ideal to assess the stock status monthly as long as there are no
huge changes in demand and supply of the products, and the
months of stock are expected to be raised to like 3 to 6 months.
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14. INVENTORY CONTROL SYSTEM
• Inventory control system informs the store personnel at both ends of the
warehouse (centralized and decentralized) on how to order or issue, how
much to order or issue, and how to maintain appropriate stock level of all
products to avoid stock-out and over-stock.
• Max-Min Inventory Control System : This is a system designed to ensure
that the quantities in stock fall within an established range.
• Max Stock Level/Max Quantity : This is the level of stock above which
inventory levels should not rise under normal conditions.
• Min Stock Level/Min Quantity : This is the level of stock at which actions
to replenish inventory should occur under normal conditions.
• Review Period : This is the routine interval of time between assessment of
stock levels to determine if additional stock is needed.
• Emergency Order Point (EOP) : This is the level of stock that triggers
emergency order, which can occur at any time within the review period.
EOP must be lower than the set minimum stock level.
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15. THREE TYPES OF MAX-MIN INVENTORY
CONTROL SYSTEM
• Forced-Ordering Max-Min System : This method is used in
either a pull (requisition) or a push (allocation) system to
forcefully raise inventory to maximum level at the end of
review period. This method does not necessarily has a
minimum stock level.
• Continuous Review Max-Min System : This method is used
in a pull system to continuously review the stock level each
time issue is made to check if the stock level is at minimum
or below minimum, and raise the stock level to maximum.
• Standard Max-Min System : This method is ideally used in a
pull system to raise inventory to maximum level at the end
of review period for inventory that are at minimum or
below minimum level. This system is always conscious of
emergency order point (EOP) to avoid sudden stock-outs.
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16. ADVANTAGES AND DISADVANTAGES OF
FORCED-ORDERING MAX-MIN SYSTEM
• Advantages
The storekeeper’s decision rule is simple: order/issue every item at
the end of the period.
Because orders are placed at regular intervals (i.e., the end of each
review period), transportation can be scheduled for specific times,
making it easier to ensure the availability of transport resources.
Because all items are ordered/issued at the end of every review
period, storekeepers do not need to constantly assess stock status,
unless they think a potential stock-out is possible.
• Disadvantages
Orders for some items may be for small quantities, because all
items are ordered regardless of stock on hand.
The system gives room for accumulation of obsolete stocks if not
well managed.
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17. ADVANTAGES AND DISADVANTAGES OF
CONTINUOUS REVIEW MAX-MIN SYSTEM
• Advantages
The storekeeper’s decision rule is simple.
The system is more responsive and flexible because orders
can be placed at any time.
Small orders are eliminated because stock levels are at the
min when an order is placed.
• Disadvantages
Transportation resources are harder to schedule because
orders can be placed at any time.
In facilities with a large number of products, or a great deal
of activity, the storekeeper’s job is harder because the stock
status must be assessed every time stock is issued.
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18. ADVANTAGES AND DISADVANTAGES OF
STANDARD MAX-MIN SYSTEM
• Advantages
Small orders are eliminated because an order is placed only when stock levels are
at or below the min.
In programs with many products, standard systems eliminate the need to assess
stock status continually (as in continuous review) and to reduce the number of
calculations that must be made because fewer products will be ordered or issued
than in forced-ordering.
Because orders are placed at regular intervals (i.e., at the end of each review
period), transportation can be scheduled for specific times, making it easier to
ensure the availability of transport resources.
• Disadvantages
The min stock level is higher, increasing the likelihood of expiry and requiring more
storage capacity, both of which mean increased costs.
Storekeepers must learn the max, min, and EOP; know how to assess stock status;
and be able to calculate the order or issue quantity.
More training for the storekeepers may be required because their decision rules
are more complex.
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19. STOCK LOCATION
• Objectives
To provide the required customer service
To keep track of where items are stored
To minimize effort to receive, put away, and retrieve items
• Basic Stock Locating Systems
Group functionally related items together
Group fast-moving items together
Group physically similar items together
Locate working stock and reserve stock separately
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20. FIXED AND FLOATING LOCATIONS
• Fixed location involves assigning permanent
location to particular SKUs and no other items are
to be stored in the location, and it is usually
employed in small warehouses where there are
few SKUs and small throughputs.
• Floating (Random) location involves storing goods
where there is appropriate space, and it requires
accurate and up-to-date information. Warehouse
using this kind of location are usually computer-
based for easy tracking.
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21. MATERIALS HANDLING
• Material handling is the techniques employed to store, move,
transport or distribute materials to their point of storage, usage or
sale with or without the aid of mechanical appliances.
• Material handling processes should be efficiently and effectively
performed to add value to our business and customer, and if not
efficiently and effectively handled, damages will occur that would
result to losses in the business.
• Material handling system can be manual, mechanized or
automated.
• Mechanized handling is necessary for safety reasons when;
Lifting loads are in excess of 50kg
Travel time is greater than lifting and placing time
Handling required many persons
Dealing with height above 7ft
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22. CARE OF THE STORE
• Effective care has to be taken to maintain the store and stocks in
good manner and shape and these includes;
Good housekeeping and cleaning
Locking of the store with strong key when not in operation, and
keeping the key(s) under the custody of authorized individual(s)
Restricting access into the store especially to non-store personnel.
Close monitoring of the hired/casual labor (loaders) while working
inside the warehouse
Temperature and humidity regulation of the store
Proper arrangement and stacking of stocks on pallets
Periodic fumigation of the store to protect the stocks from pests
and rodents attack
Stacking of the stocks 1ft away from the wall and each of the stacks
to give room for free flow of air, clear aisle and easy handling.
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23. WAREHOUSE OPERATION CHECK-LIST
S/N TASK DAILY WEEKLY MONTHLY
1 Cleaning х
2 Stock Take х х
3 Stock Check/Spot Checking х
4 Stock Record maintenance х
5 Stock Report х х х
6 Assessing stock status x
7 Re-arrangement of empty
pallets
х
8 Fumigation/Pest Control х
9 Servicing/Maintenance of
pallet trucks and fork-lifts
х
10 Age analysis of products х
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