STORES

MANAGEMENT
Construction Materials Management
ACM PA 17
Importance?
Stores is considered the least
important and least glamorous function
of an organisation.
Challenge to the stores manager
plays a pivotal role in ensuring smooth
project construction besides assisting
purchase activities by providing timely
information.
 STORES FUNCTIONS
To receive goods raw materials, components, tools &
equipments and other items and account for them
(checks).
To provide adequate and proper storage/stacking and
preservation of the goods in store.
Proper Classification and Codification of materials as
required.
To meet the demands of the consuming departments.
To minimize obsolescence, surplus, scrap and empties
To highlight stock accumulation, discrepancies,
abnormal consumption and effect control measures.
To ensure good housekeeping.
Duties of a Store Keeper
Identification of all materials stored
Receipt of Incoming Materials
Inspection of all materials received
Storage and Preservation
Material Handling
Packing
Issue of Materials to Users
Dispatch of stores to other project sites
Maintenance of stock records
Stores Accounting
Stock Taking
Submission of Management Information
Reports
 Design factors for good stores
management
Location ideally should be as near to the point of
consumption as possible so as to reduce handling
and to have timely despatch.
- Should have adequate visibility from key positions.

- Should have wide approach road

- Should permit easy unloading/loading even by large

vehicles.
Layout scientific layout should ensure easy
movement of materials. Ensure easy retrieval,
ergonomically.
 Design factors for good stores
management contd.
Sufficient space (for men and material handling
equipment) shelves, racks, pallets.
Proper preservation rain, light, heat, cold
storage, air conditioning.
Lighting adequate lighting is essential even for
night operations
Safety - training safety consciousness, safety
appliances, Personal Protective Equipment (PPE)
- good house keeping
- keep stores equipment in good order, forklifts,
cranes, trolleys, conveyors.
- fire fighting equipment
- toilets
Broad Functions of a Store.

Receipt
Stocking
Issues
RECEIPT SYSTEM
Receipts into the organisation or store
come from many sources:
- From outside suppliers
- From rejected stores
- From surplus stores
- From scrap generated
- From empties
- From stock transfer from other project
sites
 RECEIPT SYSTEMcontd.

The Receipt system of a store starts much before

the actual receipt of materials at the store. This
requires proper planning in advance.
The Purchase order indicating quantity and delivery
date is the starting point. Records should be
maintained in a chronological order to show
expected daily receipts. So that the handling and
storage can be planned in advance.
This helps in planning labour contracts for
uploading, stocking etc. and when to take delivery
demurrage.
 RECEIPT SYSTEMcontd.

Suppliers send despatch note or advise note

to the stores in advance i.e. Date of
despatch, carrier details, description, value
etc.
Document of transport department LR/RR or
consignment note
Packaging slip detailing contents in the
package.
Insurance details
 RECEIPT SYSTEMcontd.
Actual physical receipts (check against P.O. And/or
invoice for quantity and quality
(delivery challan
verification for quantity, shortages, damages, claims
preference.
take open delivery with transporters
- get shortage or excess or damage endorsed.
Provisional Goods Inward (PGI) physically
received, pending inspection note/report.
Final goods inward note (FGI)
INTERNAL RECEIPTS transfer note/ return to
stores, stock transfer (no sale), Debit/Credit note,
Internal DC (delivery challan) . Where to integrate
the quality inspection dept?
For classroom teaching and private
circulation only
STOCKING
Sorting and storing issues
when volumes are high, provide
separate areas for:-
1. Stores awaiting inspection.
2. Stores which are QC inspected,
passed and accepted for use.
3. Storage of rejected materials.

( FG not applicable to construction

activity directly)
 Storage for Construction
Open Space Storage: here materials like
sand, aggregates, etc. are stored. These
materials are more or less stable and do not
deteriorate appreciably due to storage.
Closed Space storage: here costly materials
like cement, equipment parts, finishing items
etc. are stored as they have to be kept
under lock and key.
 Storage for Construction contd.

Open-enclosed storage: here material is

stored in the open but enclosed with a
protective fence. Suitable for materials like
steel, timber, asphalt drums etc.
Recommended
good storage
practices of some
key construction
materials
ISSUES
For consumption by internal departments
as per order or indent.
To works on returnable basis.
To outside suppliers for processing or
conversion.
For stock transfer to other divisions or
project sites.
For classroom teaching and private
circulation only
Important Stores Process Control
Documents
Receipt Voucher
Ledger Sheet/page/folio
Issue Voucher
Tally Card/Bin Card
Gate Pass
Goods Inward Register/Goods Receipt Register
Voucher control register
Indent Register
Rejections Register
Specific Items Issue register (cement, steel etc.)
Gate Registers
Weighment Slips/Registers
Stock Verification Registers
 Standardisation
A standard is defined as a model or general
agreement of a rule established by authority,
consensus, or custom created and used by
various levels of interest.
Aim of standardisation should be to have uniform
standards for similar items.
Standardisation leads to simplification or variety
reduction. Standardisation should be of the most
economical sizes, grades, shapes, colours, types
of parts and so on.
ISI mark (Bureau of Indian standards) over 7,000
standards
Benefits of standardisation
Standardisation enables the materials
manager to achieve overall economy,
ensures inter changeability of parts,
implies better availability, better price
and better delivery.
It means rationalizing purchase
efforts, less stock (due to less variety)
and hence less obsolete items.
Less inspection effort( e.g. - no
routine checking of ISI marked items)
helps reducing inventory items.
Codification and Standardisation
We deal with thousands and sometimes even
lakhs of different items in inventory.
The problem is of how to ensure unique
product identification?
- suppler gives it a different name, different
departments may give it different names,
trade names may be many.
Hence codification is necessary for easy
identification of materials.
- It should be simple to implement
- It should be capable of being understood by
all.
- It should be compact, concise, consistent and
flexible.
 Codification and Standardisation
contd.
How Can it be Done?
- representing each item by a number (numerical
code)
- the digits may represent a group, sub group, type,
dimension etc.
- In big organisations these codes may vary from 8
to 13 digits ( Railways, Defence etc)
- Major groups raw materials, spare parts, sub
contracted items, hardware items, paints and
furnishing materials, electricals, HVAC, tools, oils
& lubricants, stationary etc.
- sub groups
How Can it be Done?
Codification can be as per nature of
items e.g. Ferrous, non ferrous
or as per end use
or as per source of purchasing
There can be other methods of
codification like:-
Alphabetical system single or double
combination i.e. Alpha numeric
colour code ( either exclusive or in
conjunction)
Advantages of codification
1. Unnecessary writing of lengthy description
is avoided
2. Helps in reduction in number of items,
becomes a starting point of simplification
and standardisation
3. Helps in avoiding duplication of items
4. Helps in easy recognition (proper
identification) of an item in stores
5. Illiterate employees who handle loading,
unloading stacking and issues by using a
code find it easy and it ensures that the
right type of material is issued to the users.
 Construction Projects Capital
Equipment coding
Capital equipments are associated with specific
activity or work packages, same should be
incorporated in the coding of these materials.
E.g. 110013/VI, 110013/V2, 110013/M1 etc.
110013 would be the project activity associated
with this equipment.(based on WBS)
V1 & V2 would be vessels nos. 1 & 2
M1 motor no.1
V & M are the mnemonic codes
 Construction Projects
Construction Machineries
These are used as a resource in the project
Codes are used for resource allocation and
procurement of spares
A simple code incorporating mnemonic code
for the machinery and a serial are used. If
more than one project then project code is also
incorporated.
E.g Proj Code. /BD1 (bulldozer no.1)
./comp3, .Weld m/c5 etc.
 Construction Projects - consumables

Used through out the project period in various

activities
Used in more than one activity
Usually limited to a few hundred only
Codification limited to project life only
A simple 3 to 5 digit code is preferable for such
items
Not desirable to have large codes
incorporating group codes, quality code, size
code etc.
Popular Models
KODAK SYSTEM:
- Is a 10 digit numerical code logic based on sources of
supply (procurement consideration).
- Materials are divided into 100 basic classifications
- Each class is divided into 10 subclasses
- E.g. 20 - cutting tools, 200 drills, reamers etc.
BRISCH SYSTEM:
- Based on the name of a consulting engineer.
- Is a 7 digit system 3 phases, based on logical major
groupings.
- Assemblies, sub assemblies, components.

Codification should be carried out only after consultation

with all the people concerned
Codification - problem areas

1. Allocation of temporary codes for

new items.
2. Maintenance staff quote supplier
part number while ordering.
3. Many organisations have more than
50% non-stock items. Ideally, non
repetitive, non-stock items should be
only 10% of the total items ( traditional
materials management concept, now
changing with JIT techniques).
Value Analysis
Value analysis is the orderly and
creative method to increase value of an
item.
It examines what something does, not
what it is.
An item can be a product, system,
process, procedure, plan, service etc.
This concept is used along with the
Value Engineering concepts like FAST-
functional analysis system technique
with cost function matrix.
VE was introduced by Lawrence D
Miles in 1945 and applied at the GE
plant during world war II.
VE considers the performance of a
function to its cost.
Function / cost, or
Performance + Capability / cost
Uses how/why questioning technique
Typical VE creation cycle
Forming a multi-disciplinary group .
VE starts by splitting functionality into
primary functions and secondary
functions.
Detailed analysis of functions and
costs.
Brainstorming/creativity
Evaluation
Development
Recommendation
Implementation/follow-up