Storage and Inventory Control

Storing and InventoryStoring and InventoryControlControl

Storage ControlStorage Control

Aims and Objective of Storing controlAims and Objective of Storing controlJob Description of Store personalJob Description of Store personalType of StoresType of StoresCondition of EquipmentCondition of EquipmentArrangement of FoodArrangement of FoodLocation of Storage FacilitiesLocation of Storage FacilitiesSecurity IssuesSecurity IssuesIssuing ControlIssuing ControlRecords MaintainRecords Maintain

Inventory ControlInventory Control

Introduction to InventoryIntroduction to Inventory

Types of InventoryTypes of Inventory

Inventory Control MethodInventory Control Method

General Problem in Inventory ControlGeneral Problem in Inventory Control

Storing ControlStoring Control

Aims & Objective of Storing ControlAims & Objective of Storing Control

Define as the process of establishing Define as the process of establishing standard and procedure for storing.standard and procedure for storing.The term store, storehouse or Warehouse The term store, storehouse or Warehouse refers to a building where materials are refers to a building where materials are kept.kept.An Organization have various types of An Organization have various types of sores as raw material store, processed sores as raw material store, processed store or semi finished material store where store or semi finished material store where goods kept in huge shelve.goods kept in huge shelve.

Objective of Store controlObjective of Store control

1.1. To provide maintenance material, spare parts To provide maintenance material, spare parts and general store as required.and general store as required.

2.2. To receive and Dispatch finished Goods.To receive and Dispatch finished Goods.3.3. To make available and Balanced flow of Raw To make available and Balanced flow of Raw

Material.Material.4.4. To make a proper control over ThreadsTo make a proper control over Threads5.5. Proper Inventory of store ensuring adequate Proper Inventory of store ensuring adequate

staff in Hand.staff in Hand.6.6. To accept and store scrap and other discard To accept and store scrap and other discard

material as they arise and also arrange for material as they arise and also arrange for Disposal.Disposal.

STAFFING OF STORE STAFFING OF STORE ROOMROOM

Store Manager

Assistant Store Manager

Store Supervisor

Computer Operator/Clerk

Store Man/Store Keeper

Contract Workers

Responsibilities of Store Responsibilities of Store PersonnelPersonnel

1)1) Identification of all material stored.Identification of all material stored.2)2) Receipt of incoming materialReceipt of incoming material3)3) Inspection of all receipt from renders and sub Inspection of all receipt from renders and sub

Contractors.Contractors.4)4) Storage and PreservationStorage and Preservation5)5) Material Handling and Packing.Material Handling and Packing.6)6) Issue of material to users within the Issue of material to users within the

organization.organization.7)7) Processing of Customer Orders.Processing of Customer Orders.8)8) Dispatch of Finished Goods.Dispatch of Finished Goods.

9)9) Maintenance of stock RecordsMaintenance of stock Records

10)10)Store AccountingStore Accounting

11)11)Inventory ControlInventory Control

12)12)Stock TakingStock Taking

13)13)Submission of Reports to Management.Submission of Reports to Management.

Job Description of Store PersonalJob Description of Store Personal

Reports ToReports To : Store Supervisor: Store Supervisor

1.1. Keeping proper record of transactions made Keeping proper record of transactions made for receiving and issuing of Goods.for receiving and issuing of Goods.

2.2. Ensure proper storing of Goods.Ensure proper storing of Goods.

3.3. Ensure proper supply of Goods Receiving.Ensure proper supply of Goods Receiving.

4.4. Assign Location for storage of different Assign Location for storage of different commodities as perishable and non perishable commodities as perishable and non perishable items.items.

FACILITIES AND FACILITIES AND EQUIPMENTS EQUIPMENTS

Equipments Commercial weighing scale Toed boxes Trolley Racks Cage

FACILITIESRacks Exhaust Fans / Ceiling Fans

Refrigerators Air Conditioners Temperature Recorders Generators Fire Fighting Equipment

Mouse TrapsStock Registers Issue Registers Indent Forms Type writers /Computer with Printer

Claim Forms Defective Product Reports Forms

Expiry Calendar

STORAGE AND STORAGE AND SYSTEMSYSTEMStorage according to the food categories

Non-perishable or stable foods Semi perishable foods Perishable foods

Non-perishable or stable foods

These foods do not spoil unless they are handled carelessly. They should be stored in a cool, dry place. They can be stored for one year. They should be picked and cleaned before storage.Non –perishable foods include sugar, hydrogenated fat, vegetable oil, ghee, whole grains, dals, whole nuts, dry salted fish and meat.

Non-perishable or stable foods

Semi perishable foodsThese foods do not spoil for a fairy long time if stored properly. They are less likely to decay due to micro-biological contamination than other perishable foods. Natural chemical breakdown is also slower in such foods. If they are stored in a cool place with adequate ventilation they have a moderately long shelf life. Semi perishable foods include processed cereals, pulses, and their products like flour, Bengal gram flour, milted flour, semolina, parched, etc.

Perishable foods This is the largest of the three group and include most of the food items we consume everyday, such as a milk and milk product, eggs, poultry, meat, fish most fruits and vegetables such as bananas, pineapple, papaya, green leafy vegetables etc.

Requirements concerning storage of materials/ products with respect to the following

1. Space, design, security and cleanliness2. Storage of quarantine stocks3. Storage of hazardous substances4. Conditions of storage area (e.g. temperature & relative humidity)5. Receiving of incoming materials6. Stock control (e.g. FIFO principle, proper labelling on the container)

Minimum/Maximum Purchase Order System

Minimum inventory levels: Safety level—minimum quantity below which inventory items should not fallMaximum inventory levels: Highest quantity above which inventory items should not riseUsage rates: number of purchase units used per order period

Lead-time quantity : Anticipated number of purchase units taken from inventory between the time an order is placed and the time it is deliveredOrder point : Number of purchase units in stock when an order is placed

Types of StoresTypes of Stores

1)1) Raw Material StoreRaw Material Store

2)2) Production StoreProduction Store

3)3) General StoreGeneral Store

4)4) Tools StoreTools Store

5)5) Refrigerated StoreRefrigerated Store

6)6) Dry StoreDry Store

7)7) Sundries StoreSundries Store

Raw Material storeRaw Material storeThis is where raw materials used in the This is where raw materials used in the

factory are stored usually this kind of store factory are stored usually this kind of store located inside the factory where the goods can located inside the factory where the goods can be easily issue according to Demand.be easily issue according to Demand.

Production StoreProduction StoreProduction of raw material takes place Production of raw material takes place

which require a number of material generally which require a number of material generally called consumable as eye shield, gloves etc.called consumable as eye shield, gloves etc.

General store:General store: Various kind of Various kind of Miscellaneous items as Miscellaneous items as point,brushes,cleaning material, wood and point,brushes,cleaning material, wood and spirit are kept here. in some cases where spirit are kept here. in some cases where there is no production store it take place.there is no production store it take place.

Tools Store:Tools Store: All kind of tools as All kind of tools as instrument, small tools as humor pliers etc. instrument, small tools as humor pliers etc. or special tool required in the factory. or special tool required in the factory.

Refrigerated Store:Refrigerated Store: Also called Walk in Also called Walk in used to store perishable items as used to store perishable items as fruit ,meat,vegetable etc. fruit ,meat,vegetable etc.

Dry Store:Dry Store: Placed where all groceries can Placed where all groceries can be stored and it protected from moisture.be stored and it protected from moisture.

Sundries Store:Sundries Store: For non food items as For non food items as papergoods, cleaning supplies etc.papergoods, cleaning supplies etc.

Condition of EquipmentCondition of Equipment

Temperature of Food :Temperature of Food :

1)1) Fresh MeatsFresh Meats 34*F to 36*F34*F to 36*F

2)2) Fresh DairyFresh Dairy 34*F to 36*F34*F to 36*F

3)3) Fresh FishFresh Fish 30*F to 34*F30*F to 34*F

4)4) Frozen FoodFrozen Food -10*F to 0*F -10*F to 0*F

Temperature of Beverages :Temperature of Beverages :1)1) Red Wines Red Wines 13-16*C(55-60*F)13-16*C(55-60*F)2)2) Sparkling WineSparkling Wine13*C13*C(55*F)(55*F)3)3) White WineWhite Wine 10*C(50*F)10*C(50*F)4)4) Fortified WineFortified Wine 17-22*C17-22*C5)5) Soft DrinksSoft Drinks 13*C(55*F)13*C(55*F)6)6) BeerBeer 13*C(55*F)13*C(55*F)7)7) SpiritsSpirits 13-16*C(55-60*F)13-16*C(55-60*F)

Storage ContainerStorage Container1)1) Staples : Airtight insect proofStaples : Airtight insect proof

2)2) Perishable: Pack to maintain original quality.Perishable: Pack to maintain original quality.

3)3) Fresh Fish: Packed in Shaved Ice.Fresh Fish: Packed in Shaved Ice.

ShelvingShelving1)1) PerishablePerishable :Slatted Shelving.:Slatted Shelving.

2)2) Non-PerishableNon-Perishable : Solid Steel Shelving.: Solid Steel Shelving.

Arrangement of FoodArrangement of Food

There are certain method of food arrangementThere are certain method of food arrangement

1)1) Rapidly AvailableRapidly Available

2)2) Fixing Definite LocationsFixing Definite Locations

3)3) Rotation of StockRotation of Stock

Rapidly Available:Rapidly Available: Is usually helpful to arrange Is usually helpful to arrange storage facilities so that the most frequently storage facilities so that the most frequently used items are kept.used items are kept.Fixing Definite Location:Fixing Definite Location: Each item should Each item should always found in same location and attention always found in same location and attention should be given to ensure deliveries.should be given to ensure deliveries.

Rotating of Stock:Rotating of Stock: Food controller must Food controller must establish procedure to ensure that older establish procedure to ensure that older quantities of any items are used before any quantities of any items are used before any deliveries.deliveries.

Location of Storing FacilitiesLocation of Storing Facilities

Perishable and non Perishable should be Perishable and non Perishable should be located between the located area. located between the located area. Preferably close to both such location Preferably close to both such location facilities moving of food receiving Areas.facilities moving of food receiving Areas.

1)1) Speeding and Storing of Food.Speeding and Storing of Food.

2)2) Maximizing Security.Maximizing Security.

3)3) Reducing Labors Requirement.Reducing Labors Requirement.

Security IssuesSecurity Issues

Food should never stored in a manner that Food should never stored in a manner that permits pilferage. That is another reason for permits pilferage. That is another reason for moving food from the receiving area to storage moving food from the receiving area to storage quickly as possible.quickly as possible.

1)1) Store room never be left Unattended.Store room never be left Unattended.2)2) Employee should never be permit to remove Employee should never be permit to remove

items to their own will.items to their own will.3)3) Store kept on their specified timing.Store kept on their specified timing.4)4) Store is closed the key should be kept by Store is closed the key should be kept by

manager or in office safe.manager or in office safe.

IssuingIssuing ControlControl

Issuing are made by the requesting Issuing are made by the requesting department. Requisition is used for issuing of department. Requisition is used for issuing of item to the consult Department.item to the consult Department.

Method used for IssuingMethod used for Issuing

1)1) FIFO(First in First Out):FIFO(First in First Out): Used for Perishable Used for Perishable Food item issued earlier and charged Food item issued earlier and charged accordingly remaining purchase charged at accordingly remaining purchase charged at requesting Department. requesting Department.

LIFOLIFO

LIFO(Last in First Out) :LIFO(Last in First Out) :For Non Perishable For Non Perishable Food item. In which food charged at the Food item. In which food charged at the latest price through issue of stock are latest price through issue of stock are ensure to made satisfactory rotation of ensure to made satisfactory rotation of food which prevent microbes. It is food which prevent microbes. It is assumed that issue will be from the latest assumed that issue will be from the latest purchase and price accordingly.purchase and price accordingly.

Records MaintainRecords Maintain

Beverage Perpetual LedgerBeverage Perpetual LedgerEmphasis Return BookEmphasis Return BookHospitality Complimentary BookHospitality Complimentary BookCellar Control BookCellar Control BookPurchase OrderPurchase OrderInvoicesInvoicesRequisitionRequisitionDelivery NoteDelivery NoteCredit NoteCredit NoteBin CardBin Card

Beverage Perpetual LedgerBeverage Perpetual Ledger

This Master Ledger is Prepared in the This Master Ledger is Prepared in the Control of Accounts department consists Control of Accounts department consists cards prepared for each individual type of cards prepared for each individual type of beverage hold at stock.beverage hold at stock.

Emphasis Return BookEmphasis Return Book

Many of the containers of beverages as Many of the containers of beverages as Crates, Kegs, Bottles, etc. are charged by Crates, Kegs, Bottles, etc. are charged by the supplier according to delivery. An the supplier according to delivery. An emphasis return book should be maintain emphasis return book should be maintain in which entries of all container received in which entries of all container received by the supplier should be made.by the supplier should be made.

Hospitality Complimentary BookHospitality Complimentary Book

This is necessary to record the issue of This is necessary to record the issue of drinks to the kitchen or other goods of staff drinks to the kitchen or other goods of staff at paid down by company policy.at paid down by company policy.

Cellar Control BookCellar Control Book

Provide Control of all daily deliveries to the Provide Control of all daily deliveries to the cellar and daily issue of each beverages cellar and daily issue of each beverages from the cellar to various bars and should from the cellar to various bars and should cross check with the entire in the Bin Card cross check with the entire in the Bin Card and perpetual inventory ledger held in and perpetual inventory ledger held in control.control.

Cellar Control BookCellar Control Book

Item Unit Stock Issue Total issue Return Book stock Bal.

Purchase OrderPurchase OrderAmount of liquor to be ordered are determine by physical inventories, Amount of liquor to be ordered are determine by physical inventories, issues, requisition ,reorder points as determined from inventory sheet.issues, requisition ,reorder points as determined from inventory sheet.

Purchase order Include:Purchase order Include:1)1) Terms & ConditionTerms & Condition2)2) Delivery DateDelivery Date3)3) Requisition NumberRequisition Number4)4) Special InstructionSpecial Instruction5)5) ShipperShipper6)6) Freight ChargeFreight Charge

Copies Forwarded to:Copies Forwarded to:1)1) Purveyor 2 copiesPurveyor 2 copies2)2) Receiving DepartmentReceiving Department3)3) Accounts DepartmentAccounts Department4)4) Bar ManagerBar Manager

Registration No. ………….. PO……………..

Order From Sheraton Corporation,Newyork

Terms……………. Freight………………. Delivery Date…………….

Special Instructions…………………………………

Code Item Seize Quantity Price Total

231 Salmon 5 K.G 200re/ 1000Re.

Order Total 1000 Re.

Purveyor 2 White Authorize By…………….

Account 1 YellowDate………………………

Receiving 1 Pink

Agent 1 Blue

Format of Purchase OrderFormat of Purchase Order

InvoiceInvoice

Invoice are furnished and made by the purveyor at Invoice are furnished and made by the purveyor at least three copiers which must be signed by the least three copiers which must be signed by the receiving clerk.receiving clerk.Copies of InvoiceCopies of Invoice

1)1) The PurveyorThe Purveyor2)2) Accounting DepartmentAccounting Department3)3) Receiving ClerksReceiving Clerks

Purpose of InvoicePurpose of Invoice1)1) Normal DeliveryNormal Delivery2)2) Credit request at DeliveryCredit request at Delivery3)3) Credit by AccountingCredit by Accounting4)4) Credit Request by storeroomCredit Request by storeroom

RequisitionRequisition

Requisition is a sheet which must be closed by Requisition is a sheet which must be closed by rolling off the unused portion of the sheet rolling off the unused portion of the sheet immediately below the last item of immediately below the last item of requisitioned. Requisition Contain:requisitioned. Requisition Contain:

1)1) Date of IssueDate of Issue2)2) Department to receive MerchandiseDepartment to receive Merchandise3)3) Item Requisition by NameItem Requisition by Name4)4) Number of UnitsNumber of Units5)5) Unit SizeUnit Size6)6) Signature of Authorize PersonSignature of Authorize Person

Purchase RequisitionPurchase RequisitionDate…………….. …… Serial No……………….

Department…………….

Description Quantity Unit Budget Code Remarks

Department Head Authorize of Purchase

(Signature) (Signature)

Stores RequisitionStores Requisition

Department……………………… No. …………………..

Date………………….

On Hand Additional Requirement Items Quantity Cost Amount

Store Keeper

(Signature)

Delivery NoteDelivery Note

The receiving Department must check all the The receiving Department must check all the deliveries for quantity by comparing the deliveries for quantity by comparing the delivery note with a copy of purchase order if delivery note with a copy of purchase order if all the quantity match up the purchase order, all the quantity match up the purchase order, then check the quality.then check the quality.

Copies of Delivery NoteCopies of Delivery Note1)1) Top CopyTop Copy :: Returned in Receiving Depart.Returned in Receiving Depart.

2)2) Second CopySecond Copy:: Return to Deliveryman by sign Return to Deliveryman by sign of Senior Receiving Member. of Senior Receiving Member.

Sheraton Hotels Pvt. Ltd.

Delivery NoteCustomer Copy

To,

………………….. ……………………….. NO. ……………………..

………………….. ……………………….. Date. …………………..

Order No. Quantity Description Unit Value Remarks

Delivered By Received By :(Signature) (Signature)

Credit NoteCredit Note

When the delivered merchandise does When the delivered merchandise does not confirm about the order what appears not confirm about the order what appears in invoice quality, quantity, specification in invoice quality, quantity, specification of price and all or some part of shipment of price and all or some part of shipment is returned in credit memo.is returned in credit memo.Copies of Credit MemoCopies of Credit Memo

1)1) Original Copy :Original Copy : Delivered to PurveyorDelivered to Purveyor2)2) Second Copy : F & B ControllerSecond Copy : F & B Controller3)3) Third Copy : Receiving DepartmentThird Copy : Receiving Department

Format of Credit NoteFormat of Credit Note

To,

……………………………… Number …………………………

……………………………… Date ………………………….

Quantity Unit Item Cost

Unit Total

Vendor

F & B Controller Requested By:

Accounts (Storekeeper)

Inventory ControlInventory Control

Introduction to Inventory ControlIntroduction to Inventory Control

Food and Beverage Department also Food and Beverage Department also responsible for Inventory Control in which responsible for Inventory Control in which certain items are keep in By making certain items are keep in By making several stock groups.several stock groups.

The need of inventory control is due to the The need of inventory control is due to the spoilage of food product which loose their spoilage of food product which loose their freshness, weight due to dehydration.freshness, weight due to dehydration.

Types of InventoriesTypes of Inventories

1)1) In process InventoriesIn process Inventories

2)2) Batch InventoriesBatch Inventories

In Process InventoriesIn Process Inventories

In process Inventories are normally In process Inventories are normally negligible. No maturing process is required negligible. No maturing process is required and once processed food may be and once processed food may be immediately served.immediately served.

The larger in process inventories becomes The larger in process inventories becomes in relationship to sale the greater chance in relationship to sale the greater chance for loss due to spoilage.for loss due to spoilage.

Batch InventoriesBatch Inventories

Most of the food product are purchased in Most of the food product are purchased in batches the size of product determine batches the size of product determine perishablity, storage perishablity, storage facility,frequency,transportation charges in food facility,frequency,transportation charges in food product.product.

A minimum par stock is maintain all the times.A minimum par stock is maintain all the times.

EX: Live Lobster which are being Highly in EX: Live Lobster which are being Highly in cost. We should maintain at minimum levels cost. We should maintain at minimum levels so that few if any are lost due to spoilage.so that few if any are lost due to spoilage.

Methods of Inventory ControlMethods of Inventory Control

1)1) Open storeroomOpen storeroom

2)2) Bin CardsBin Cards

3)3) Dual BinDual Bin

4)4) Perpetual InventoryPerpetual Inventory

5)5) Physical InventoryPhysical Inventory

Open StoreroomOpen Storeroom

In small establishments No one is In small establishments No one is responsible for recording merchandised responsible for recording merchandised issued or received daily basis. Though one issued or received daily basis. Though one person is held accountable for ordering person is held accountable for ordering and taking inventory.and taking inventory.

The problem arise shortage due to theft The problem arise shortage due to theft due to running out of merchandise.due to running out of merchandise.

Bin CardBin Card

A Bin Card with minimum stock level A Bin Card with minimum stock level posted should somewhat alleviate the posted should somewhat alleviate the problem of running out since the person problem of running out since the person taking inventory prior to ordering can taking inventory prior to ordering can check visually if the stock has fall below as check visually if the stock has fall below as per requirement. per requirement.

Bin CardBin Card

Indicated as a Inventory Control Method in which the Indicated as a Inventory Control Method in which the person taking Inventory prior to ordering can check person taking Inventory prior to ordering can check visually of the stock has falls below the par required. visually of the stock has falls below the par required. Bin card Contain:Bin card Contain:

1)1) Description of CommodityDescription of Commodity2)2) Quantity of Issued GoodsQuantity of Issued Goods3)3) DateDate4)4) Balance RemainingBalance Remaining5)5) Accounting of Received GoodsAccounting of Received Goods6)6) Minimum Stock LevelMinimum Stock Level

Bin CardBin CardCommodity……………………. Reorder Point…………..

Maximum Stock………………. Bin Number…………….

Minimum Stock………………. Supplier………………….

Date Reference Received Issued Balance

Dual BinDual Bin

Under this method inventories of crucial Under this method inventories of crucial items may be kept. One is available to all items may be kept. One is available to all employees while the otherwise is used employees while the otherwise is used emergency amount to be held on hand at emergency amount to be held on hand at all times. all times.

Perpetual InventoryPerpetual Inventory

Perpetual inventory used in those Perpetual inventory used in those operation which having a full time operation which having a full time storekeeper who is responsible for issuing storekeeper who is responsible for issuing of stock item as well as maintaining the of stock item as well as maintaining the record and assist in ensuring that there is record and assist in ensuring that there is an adequate supply of merchandise.an adequate supply of merchandise.

Physical InventoryPhysical Inventory

Physical Inventories record on all the Physical Inventories record on all the items are physically check in all the items are physically check in all the storage areas. The employee responsible storage areas. The employee responsible for this record .for this record .

The inventory items are systamatically The inventory items are systamatically check and arrange if needed.check and arrange if needed.

General Problems in Inventory General Problems in Inventory ControlControl

1)1) Spoilage of Food and Beverage itemsSpoilage of Food and Beverage items

2)2) Estimating Value of MerchandiseEstimating Value of Merchandise

3)3) Goods in ProcessGoods in Process

Spoilage of Food and Beverage Spoilage of Food and Beverage ItemsItems

All operator deduct spoilage by proper All operator deduct spoilage by proper rotation of goods but natural spoilage are rotation of goods but natural spoilage are sprinkled does occur.sprinkled does occur.

In accounting of cost food controller In accounting of cost food controller should allocate a space on store keeper should allocate a space on store keeper report from shrinkage and spoilage.report from shrinkage and spoilage.

Estimating Value of MerchandiseEstimating Value of Merchandise

Liquor which are particularly filled bottle Liquor which are particularly filled bottle may be accurately estimated food items may be accurately estimated food items may combine many different ingredients of may combine many different ingredients of verifying cost.verifying cost.

Thus the value of finished goods may be Thus the value of finished goods may be difficult to estimated.difficult to estimated.

Goods in ProcessGoods in Process

In the kitchen hundred of items are open In the kitchen hundred of items are open for the production of merchandise .for the production of merchandise .

The value of these items may be consider The value of these items may be consider in addition of food may partially process in addition of food may partially process one day service .one day service .

EX: Spices, Sauces, CondimentsEX: Spices, Sauces, Condiments

Thank YouThank YouOm SinghOm Singh

Amrapali Institutes of Hotel ManagementAmrapali Institutes of Hotel Management