Presentation on theme: "STOCK CONTROL Inventory is often referred to as the graveyard of business because over investment in stock is a frequent cause of business failure."— Presentation transcript:
1 STOCK CONTROLInventory is often referred to as the graveyard of business because over investment in stock is a frequent cause of business failure.
2 STOCK CONTROL Many business costs, such as: A storeman’s wages Storage costsInsurance of the stockInterest on borrowed money,are directly related to investment in inventory.
3 STOCK CONTROLit is important to control stock and inventory so that there is:enough to keep work flowing efficientlynot too much so that money spent on the stock lies idle while it is not used.
4 STOCK CONTROLAn inventory is simply a list of all the goods purchased and used in the manufacturing process.For exampleraw materialswork in progressfinished goods
5 STOCK CONTROL Stock control is used to: Reduce the costs of running the businessesReduce excess stock and wastageMake sure there are enough goods to meet the demandSpeed up deliveries to customers.
6 WHAT ITEMS ARE RECORDED? Equipment, such as static machinesTools, such as hammers and spannersPackaging, such as bubble wrap or boxesSpare parts, such as extra cutterblades for machinesAccessories, such as door handlesOther consumables, such as nails and screws.
8 HOW IS STOCK CONTROLLED? Systems can be:Paper based, such as hand written stock cards or sheetsComputer generated.Stock control records should contain:a description of the goodsdetails of where the goods are stored or locatedthe amount of goods currently helddetails about the movement of the stock
9 DOCUMENTS AND FORMS Used to control stock include Purchase requisitionsPurchase ordersDelivery docketsInvoices
10 PAPER BASED SYSTEMSSome of the typical ways of keeping a paper based system up to date involve the use of:Job cards - Job cards are used as a means of keeping account of the amount of goods you have produced.
11 STOCK CARDS Stock cards – use minimum/maximum stock levels. Stock cards are used to monitor the amount of raw materials that are used.When using this system, you need to consider:The time taken for deliveryReliability of suppliersImportance of the stock item.
13 REQUISITION BOOKSRequisition books are used to request an order to be raised for materials. A duplicate of the requisition is then forwarded to the purchasing department.This system works well if the employees are vigilant toward maintaining stock.A requisition is NOT an order for product.
14 DELIVERY DOCKETS Delivery dockets are used to account for and record: inward goods – materials coming inoutward goods.- product going out
15 CUSTOMER ORDERS WHICH SYSTEM DO YOU USE? Orders from customers are received, - lists of raw materials needed is raisedWhen using this method, consumables are not indicated.Disadvantage -work cannot start on the customer order until the stock arrives.Advantage - you don’t spend a lot of money on stock with the risk that you may not use it. You can use customer deposits to fund materials.WHICH SYSTEM DO YOU USE?
16 COMPUTER GENERATED RECORDS Computers help to:eliminate extra paperworkcentralise stock controlgenerate orders automaticallysave time.Computers canenter stock data manuallyentering data with bar code readersscanning documents, such as invoices
17 COMPUTER GENERATED RECORDS All of the following information can be produced by computer.Invoices.Orders.Supplier lists.
18 DATA ENTRY The computer application can then: Check to see if the stock is on handProduce an order for more stockPlace an interim hold on the stockProduce a job cardProduce working drawingsProduce delivery dockets and invoices
19 BARCODE SYSTEMSThis system can be used for all sorts of stock items, such as:Boxes of nailsLoads of timberContainers of adhesivesPaintBoxes of fittings and accessories.
20 BARCODE SYSTEMSBarcodes are attached to all goods or groups of goods and can contain a whole range of information, such as:QuantityPriceSizeTypeSupplier nameDate of expiry, if applicable.
21 SCANNINGA scanner is a piece of equipment that acts like a photocopier and can:be used to copy a paper invoice or order.transfer this copy to the computer for storage and easy access.have text recognition, so the information can be interpreted and processed by the computer automatically
22 STOCK CONTROL WITHOUT RECORDS Detailed records of stock movements and levels may not always be necessary:in small businesses – owner/operator looks after all stock control issuesin businesses such as prefabricated or made-to-order products.
23 BIN SYSTEMS Bin systems can replace formal stock control records. Single bin, two bin and three bin systems
24 IMPREST SYSTEMSIn an imprest system, an upper limit is set for inventory items in stock and orders are placed to bring the inventory back up to this level. This level equals the quantity necessary to:provide supplies to cover delivery timemaintain supplies to cover the review period.
25 STOCKTAKINGStocktaking is the process of counting the amount of materials and goods the company has on hand.Physical stocktakes are important so you can identify:discrepancies between what is ordered and what is receiveddiscrepancies between prices paid and value receivedpatterns of usage.
26 STOCKTAKING Stocktakes are usually held at least twice a year, Important points to remember when stock taking:Count everythingUse stock recording sheets and stickers so things aren’t counted twice.3. Electronic recording devices make it much faster
27 SUMMARYThe more efficient the control of stock is, the less will be wasted or stored unnecessarily.Good stock control:Saves timeSaves moneyMakes sure the workplace is more efficient.You can use paper based and computer based stock control methods to:Record the movement of stock itemsMaintain stock listsAdjust levels to meet demand.
28 Your companies nameOrder No:Supplier:Delivery address:Date of order:Order makerCourier ?COD/30 DaysQuantityLitre / sheetsC grade 12mm 7 ply2400x 1200Special InstructionsCosts and chargesAuthorising signature and date
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