MFC No.

: 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 1 of 12

INVENTORY MANAGEMENT PROCEDURE

Policy and Purpose:

This policy shall guide every organizational unit to tighten
inventory management processes to increase operational efficiency,
improve customer service, and reduce inventory and distribution
cost.
Scope:
These guidelines cover the following inventory related activities:
1. Material Requisition Preparation
2. Processing and Issuances
3. Delivery and Inspection
4. Inventory Taking
5. Monitoring and Control of Inventory

Guidelines:

1. All stock items will be maintained under perpetual inventory system.

This method will provide information useful for controlling purchases
and consumption, reveals stock losses when compared with physical
counts, and facilitates control over the custody of goods.
2. All stocks, materials and supplies will be stored in assigned areas.
Access to such areas will be limited to prevent theft and facilitate
control. Degree of control may vary with the particular items on stock.
All stock areas will be under the supervision of a storekeeper or
warehouse keeper.
3. Inventory records shall be maintained by employees who shall in no
case be given access to the storerooms and be given responsibility for
the physical handling of inventories.
4. Those in charge of receiving or issuing inventoriable goods shall not be
given access to the inventory records at any time.

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 2 of 12

INVENTORY MANAGEMENT PROCEDURE

5. All deliveries from the storerooms or warehouse should be made only

upon properly documented requisitions. This ensures that goods are
used only for authorized purposes and furnishes the storekeeper with
written evidence discharging him or her from responsibility for
custody over such goods.
6. All classes of inventory should be verified by physical counts at least
once a month to check the accuracy of inventory and serve as deterrent
fraud. Such counts shall be conducted by persons independent of the
storekeeper and those responsible for maintaining inventory records.
A responsible official shall witness or counter-check the count
7. Written instructions should be prepared when inventory is to be
counted to ensure the accuracy of the count and shall include:
a. proper identification and arrangement of stock
b. cut-off points of receipts and deliveries
c. segregation of critical, slow-moving, obsolete and damaged
items
d. numerical control of stock-taking sheets and / or bin cards.
e. Proper identification and arrangement of inventories
1) Inventory counts tags, sheets, etc. should be properly controlled
during and after the count to prevent loss or suppression.
2) Adequate controls and safeguards should exists in the handling
and control of scrap and other saleable damaged, slow-moving,
obselete stocks as well as item written-off but physically on
hand. These items are subject to misappropriation because they
may not exist in the accounting record.
3) Inventory should be properly insured to safeguard against fire
and other losses. Insurance coverage should be reviewed
periodically.

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 3 of 12

INVENTORY MANAGEMENT PROCEDURE

4) Periodic reports should be maintained for inventories which

are:

a. slow moving
b. obselete
c. damaged
d. outside company requirements

A. Material Requisition (MR) Preparation and Processing

1. When to prepare a material requisition
a. Before a MR is prepared, the requisitioning Office shall
ascertain the need for the item requisitioned and check the
budget allocation for the same.
2. Who should prepare a MR
a. Every Department/unit shall be in-charged of preparing the
MRs of stock items.
3. MR Signatories
All MRs shall be prepared by the requisitioning office,
authorized by his Division and Approved by the Assistant
General Manager and/or Chief Operating Officer.

4. How to prepare a MR
a. A MR shall contain only one material category.
b. All MRs shall include:
i. A complete description of the item requisitioned, its
specification catalog number, Item ID and other
relevant information;

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 4 of 12

INVENTORY MANAGEMENT PROCEDURE

ii. The model of the item, the brand or its equivalent;

iii. The date the item is needed adjusted for the standard
purchasing lead-time;
iv. Stock On Hand (SOH) of the item to be requested.
v. The type and purpose of the expenditure;
vi. All other information found in the MR form; and
vii. Special instructions by the requisitioning office.
c. MRs shall be accomplished in 3 copies
5. Submission, review and amendment of MR
a. All copies of MR shall be forwarded to Assistant General
Manager or his/her authorize representative with the necessary
attachment after the requisitioning Division has authorized the
requisition.
b. A PR may be returned by the Authorize representative on any
of the following grounds:
i. Unclear, erroneous or inadequate specification and other
information;
ii. Item is being requisitioned by unauthorized office;
iii. Unauthorized/incomplete signatories;
iv. In adequate attachment.
6. Cancellation of MR
a. The MR may be cancelled on any of the following grounds:
i. Product is not locally available;
ii. MR requires major alteration;
b. All copies of the cancelled MR shall be stamped Cancelled
and shall be routed as if the requisition were served.

B. Delivery/Receiving /Inspection

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 5 of 12

INVENTORY MANAGEMENT PROCEDURE

1. Time of Delivery
Suppliers shall be instructed to deliver goods from 8:00am to
5:00pm on regular working days. Deliveries beyond this time
may only be entertained for special or urgent deliveries and
only upon proper coordination with Logistic.
2. Responsibilities of the receiving office
a. It shall be the responsibility of the Logistic to notify through
telephone authorized inspectors upon delivery.
b. The Logistic shall always insure that the information in the
PO is compatible with those in the Delivery Receipts, and
other documents/reports accompanying it other than the
Sale Invoice.
c. Receipt of items shall only be done after it passed through
the inspection of concerned offices.
3. Short, rejected and cancelled deliveries
In case of rejected deliveries or after it has been ascertained that
the supplier is unable to complete its delivery, an exception
report shall be prepared and attached to the PO.

Procedure:
WHO DOES WHAT

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 6 of 12

INVENTORY MANAGEMENT PROCEDURE

Requisitioning Unit Prepares three (3) copies of Materials Requisition

/Material Issuance Form (see sample form no.____).

Department Head of Approves the Material Requisition/Issuance Form and

requisitioning unit Forwards to warehouse

Stock Clerk Checks the availability of the materials requisitioned

If the material is not available, this will be included in the

items for Purchase Requisition

If the material is available, fills out the issuance column of

Materials Requisition /Issuance Form and signs under
Issued by caption

Warehouse Officer Checks the Materials Requisition/Issuance Form with

emphasis on the issuance portion and signs.

Stock Clerk Issues the materials Requisition or his/her representative

signs under the Received caption after checking the
materials issued to him/her.

Updates the Bin Card/Stock Card

Filled Original Materials Requisition /Issuance Form

while the duplicate will be forwarded to Accounting
Department

Property Accounting Clerk Checks the completeness of Materials

Requisition/Issuance Form, writes the correct charge

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 7 of 12

INVENTORY MANAGEMENT PROCEDURE

account, and batches them.

Bookkeeper inputs all the necessary information of the

Materials Requisition/Issuance Form, thereby updating
the expense Master File and Inventory Master File.

Duplicate Materials Requisition/Issuance Form is filled in

property Accounting Section.

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 8 of 12

INVENTORY MANAGEMENT PROCEDURE

Returned Items

WHO DOES WHAT

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 9 of 12

INVENTORY MANAGEMENT PROCEDURE

If case of stock items that already issued but returned,

Pull-out Form is used. Stocks may be returned for the
Returning Unit/Office following reasons rejects, damage, used or for disposal,
etc.

The Unit or Office that is going to return a stock prepares

three (3) copies of Pull-out Form (see sample form no.)

Department Head Reviews and approves the Pull-out Form

Triplicate Pull-out Form is retained by the user for file.

Pull-out Form and the item to be returned are forwarded

to the warehouse. Stock Clerk checks the items returned
Stock Clerk against the Pull-out Form and if everything is in order he
signs under received by caption. A number is assigned
to the Pull-out Form.

Warehouse Officer Receives the Pull-out Form and signs under Received by
caption.

Based on the original Pull-out Form is given to the

Receiver for file.

Original Pull-out Form is filled in Receiving Section While

the Duplicate is forwarded to Property Accounting

Property Accounting Clerk Checks the completeness of Pull-out Form and writes the
correct charge account and batches them

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 10 of 12

INVENTORY MANAGEMENT PROCEDURE

Checks the charge account written on the Pull-out Form as

batched and inputs all necessary information thereby
Accounting Head updating the Inventory Master file and other related
accounts.

Duplicate Pull-out Form is filed in the Property

Accounting Section.

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 11 of 12

INVENTORY MANAGEMENT PROCEDURE

C. Inventory Taking
1. Responsibilities of the warehouse officer
1.1 It is the responsibility of the warehouse officer to have a
periodic schedule (daily or weekly and monthly) of
inventory of all warehouse items-raw and packaging
materials, finished products, in-process materials,
rejected materials, machine spare parts, cleaning and
office supplies, uniforms, PPEs and laboratory
supplies.
1.2 Warehouse Officer should coordinate to Accounting
Head, Production Manager, Admin Officer, and
Maintenance Manager for the end of the month
inventory schedule through memorandum. The
following information should be indicated in the
memorandum;
1.2.1 Inventory Schedule Month,
Date, and Time
1.2.2 Personnel Assigned in
Inventory Activity Stock
Clerk, Stockman, Accounting
Staff.
1.2.3 Special Instructions Ex. No
movement of materials during
inventory.

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager
 MFC No. : 002
Date Issued :
Revision No. :
Plant Operations Date Revised :
Standard Procedures Page : 12 of 12

INVENTORY MANAGEMENT PROCEDURE

Prepared by: Noted by: Approved by:

Vicente W. Antiporda Jr. Rassel Gargoles Marcelo Co

Consultant Plant Operations Assistant General Manager General Manager