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STORES AND STOCK CONTROLS TASKS AND SOPS. AREAS TO COVER 1. Purchasing 2. Receiving 3. Issuing 4. Recipes 5. Stock Taking 6. Possible reasons for the variance 7. Stores set up 8. Minimum and maximum stock levels 9. Tagging system 10. Cleaning 11. Handling damaged stock items in the stores. 12. Spots checks at stores. 13. Need for spot checks. 14. Stock turn over rate. 15. Implications of the stock turn over rate PURCHASING Making of L.P.O (local purchase order) Its a document that enables the people concerned to know what to purchase and where to purchase it, and it acts a control measure. Before an L.P.O is made the departmental user should make an internal purchase requisition that will act as a guide line on the person making it using the system. L.P.O is made then signed with the H.O.D this to verify that what he or she ordered is what that has been written. The L.P.O is then taken to the general manager for authorization. Its usually in copies of twos one copy remain in the stores and the copy is taken by the supplier. Date of delivery should be indicated on the L.P.O to avoid delays in supplying the goods. RECIEVING This is a very sensitive session. Before receiving the people concern should be in place to receive so as to check on quantity and quality and also two or more people should be present to see to it that what was

requested is what has been purchased and delivered. When receiving the following documents should accompany the goods:

1.

Delivery Note-Does not contain prices only the goods delivered & there quantities. 2. Invoices -This a document that shows the quantity delivered and amount to be paid for the goods delivered. Receiving is always done before 5 oclock in the evening this is to avoid receiving things in a hurry. In case the supplier supplies goods that are not in good condition and one feels that it should be returned then a GOODS RETURN NOTE should be raised immediately in copies of two where by original goes to the supplier and the copy remains with the accounts office so as when payment is done the amount is reduced from the original invoice. Checking of expiring dates when receiving its very important this is to avoid receiving goods that have already expired.

ISSUING Issuing is normally done after the items needed to different departments have been written in the departmental requisition book and signed by the head of department or the concerned authorities. It is done twice a day that is in the morning from 9:00am to 10:00am and from 4:00pm to 5:00pm in the evening. In case the items issued are not in good condition say spoiled, then it is returned to the store and written as spoilages thus reducing it from the stock in the system (MC).

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Training, Recruitment, Management & Operations Consultants

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The FIFO or the LIFO method of issuing should be used. The bin cards are then updated in terms of what was issued that day from the cost centers. After the issuing, the items are then transferred into the system i.e. MC from different cost centers to different departments and then booked.

The F&B controller must inspect the faulty goods before they are written off and then supervise their disposal, so that they are not for fraud later.

STORE SET UP AND STORAGE The store should be arranged in a way that foods are separate from non foods like toiletries, or toxic goods which could contaminate the foods. The perishables should be monitored closely and they should be stored in a well ventilated area to avoid high rate of spoilage. And in case they show signs of spoiling they should be issued first and the totally spoilt should be weighed and then deleted from the system as spoilages or damages. Bin cards should be put alongside the items for easy monitoring and updates. The store should be hygienically maintained in order to avoid rodents and contamination or air pollution. When arranging the stores the FIFO (first in first out) method must be used. This is to avoid good expiring at high rate. Meats should be kept according to their types. White meats should be kept separate from red meats. This to avoid contamination White meats should be stored below negative eighteen centigrade. Red meats should be stored below negative twelve degrees centigrade. HANDLING DAMAGE STOCK ITEMS IN THE STORES These should be recorded in the damaged goods book after stock taking. They should then be removed from stores via stores issue requisition. The requisition should then be valued and figure written off after approval.

RECIPES This is a very important component in the system. Recipes help in reduction of items especially items that are consumed in the bar like beverages and food in the kitchen. Recipes are very sensitive they should be fed in the system with right units and right quantities of ingredients. Wrong units and quantities of ingredients leads to wrong values and also wrong food and beverage cost.

STOCK TAKING Stock taking is done on daily, weekly or monthly procedure. When taking stocks for the bars tot measure rulers and stickers are used. This is to enable the stock controller get accurate measurements. In case of a shortage the stock controller verify if its a genuine one in case there is no evidence or clear picture about the shortage the person responsible should definitely pay for the shortage. The shortages are always detected after the stocks have been fed in the system. And the system automatically calculates its self and gives the difference.

POSSIBLE REASONS FOR THE VARIANCES

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TAGGING SYSTEM Issuing different quantities from those indicated on the stores issue requisition. This will result in either stock overage stock shortage. This problem can be controlled trough increased efficiency in issuing. Wrong entries on the stock control records. This can be solved by counter checking all entries on stock control records against stores issue requisitions. Wrong calculations on the stock control records thus depicting wrong balances. This can be solved by checking all calculations again. Omitting some entries on the stock control records. This can be solved by counter checking the entries on stock control records against the stores issues requisition. Removing items from stores without accounting for them through stores issue requisitions. This can be solved by avoiding verbal ordering and issuing. Pilferage (theft) of store items from storage areas. This can be solved by holding the store keeper responsible for any loss that may arise out of pilferage. Appropriate disciplinary action should be meted out. MINIMUM AND MAXIMUM STOCK LEVELS These are stock level that controls the purchasing of goods in the stores. Mostly they are done at the start of the month in order to direct or give a clear picture of what to be purchased and in what quantities. With the stock levels its not easy to run out of stocks unless the turn over becomes higher than it was expected of. Tagging is mostly used on all types of meats. This is to enable the easy access of different types of cuts when frozen. It also makes stock taking easy. It also makes storage look neat and clean if arranged systematically according to the tags. Its easy to detect if you have shortage. With the tagging when the stocks are low its easy to know.

CLEANING Stores should be cleaned on daily basis. The freezers should be cleaned on weekly basis this to avoid contamination from the dirt. When cleaning the freezers a blunt object should be used not a sharp object which might interfere with the systems of the fridge. Before cleaning the freezers power should be put off to avoid shot. Vegetable area should always be clean and dry. Dampness should be avoided because it causes rotting.

SPOT CHECKS AT THE STORES Spots checks are necessary where the stock taking intervals is long e.g. one month. This involves picking a few items at random, counting them and then comparing the results with the respective stock control records. Spot check should be carried out with the same personnel who do the regular stock taking. Any variances noticed must be investigated immediately. NEED FOR THE SPOT CHECKS They ensure that perpetual inventory records are kept up to date and accurate all the time.

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Training, Recruitment, Management & Operations Consultants

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They help identify problems early enough for the corrective action to be taken in good time before the main stock taking exercise.

STOSTOCK TURN OVER RATE Stock turn over rate refers to the number of items that stock is turned into revenue in a given trading period In financial terms, it measures the rate at which stock is consumed i.e. being turned into cost and thereby generating revenue. Stock turn over rate is used by stock controllers to assess how much money is being invested in non-productive stock, i.e. the items that take too long in storage areas before they are requisitioned by production or selling outlets for generation of revenue. The rate of stock turn over rate depends on two factors: Size of the stores. A smaller store results in a high rate while a lager store results in a lower rate. Location of the establishment in relation to suppliers. The nearer to the supplier, the higher the rate and vice versa.

IMPLICATIONS OF THE STOCK TURN OVER RATE A high stock turn over rate may mean that less money than necessary is being invested in stock. This can easily cause stock shortages leading to decreased sales and customer dissatisfaction. A low stock turn over rate may mean that more money than necessary is invested in stock. This can result in excessive stock levels that can lead to: Spoilage and product quality deterioration Wasted work force (higher labour cost) especially for people handling the excessive stock. Higher storage costs for the excessive stock.
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