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11-5.

2 Material Identification
Use of industrial symbols
saves clerical and speaking
time
-aid in sorting and segregating
items under various
classifications or group headings
a) Numeric
b) Mnemonic
material storage systems
Symbol
-permanent bin section assigning
-apt to waste space

Index
-permits material to be stored in any bin
-requires a record of the material location
-allows most effective use of storage space but quite
tedious

Others
-use of paints, tags, distinctive marks
Physical inventory
Material flow
Physical inventory
An actual physical count of materials on hand is taken
periodically so that adjustments may be made to
correct cumulative errors in receipts and disbursements,
incorrect postings or extensions, and possible omissions.

Count on large items manually or by weight
Count on small items weigh-counted on scales
3 methods of taking physical inventory
Inventory at a stated time annually covering all
items at that time

Periodic physical inventories of all items during the
course of the year so that each item is inventoried
at least once during the year

Inventory of each item whenever the stock on that
item reaches its lowest point
A form of physical control of
inventories
The minimum or stand-by quantity is bonded in
stock by tying together the required number of
units, binding them with scotch tape, etc..

When the bond on such material must be
broken to meet requirements, it becomes a
signal to the stores clerk that stocks should be
replenished by sending through new order
Customary methods of pricing
inventories for accounting purposes:
First-in-first-out (fifo)
Last-in-first-out (lifo)
Standard cost


~important to good inventory management
Since not all items in the inventory
deserve the same amount of care
ABC analysis
- Is a routine by which different classes of items can be
evaluated
- The procedure is to categorize all items into three
classes A, B, and C, according to individual ratings
11-6.1 Storeroom Location and Lay-out
In general, material storerooms
are located close to the point of use.


Raw materials stored near first operation
Finished goods shipping area
Banks of in-process materials immediately ahead of the
next operation
Supplies and tools central to the personnel and
equipment served
Good lay-out practice = best flow of materials
Definite limitations:
Size
Weight
Value of material
Perishable
flammable

Decentralized material storage
All materials are delivered directly to the point if use
factory in a stockroom-no material moved twice
travelling stockrooms-employs merry-go-round
conveyors

~ a well-laid-out stockroom provides space for the receipt
and inspection of incoming materials and for making
disbursements as well

Main aisle
Should not be used as receiving areas. Which makes for
a dangerous and inefficient condition
Should usually be between 4 and
8 feet wide

Sub-aisle
Between racks and bins
Minimum of 30 inches wide

If portable or salable items are to be
stored
Entire store should be enclosed with wire-mesh
partitioning or with solid-frame structure
Information / Service Window
As part of an enclosure, material requisition and where
small items can pass

In-House Supermarkets
Stockroom operates as supermarket by displaying items on
shelves with the prices marked
This system eliminates filling out requisitions and associated
processing, reduces delivery time, lowers departmental
hoarding of excess items, and controls the dollar usage of
supplies
Charge Plate Department
Items requiring repair to fix the item are billed on a job order to
the plate address
Departments
Considered to be customers of an independent supermarket
facility

11-6.2 Storage Facilities
1. Allow for easy, quick, and sure receipt, storage and disbursement of
material
2. Provide space and storage equipment adequate as both size and
load-bearing capacity for the material to be stored
3. Protect against damage and deterioration
4. Provide means for identifying and readily locating contents
5. Provide for the selection of the oldest material first
11-6.3 Storeroom Operation
Major Premise
1. Fixation of responsibility for the major operation
2. Control in the hands of one individual (the only one allowed)

Use of Perpetual-inventory records
The heart of the quantitative control of materials

Mechanized material
handling
Material flow
Material handing
Internal transportation includes
-pick-up and delivery schedules for production material
-processing of work tickets (progress recording)
-handling of supplies
-training of truck drivers for safe and
efficient operations
-scheduling of maintenance and servicing
activities

Development of machines
~Production people realize that material-handling
equipment is not merely a substitute for a person
but is a vital element in the continuous flow of goods through a plant

11-7.1 Types of Material-handling
Equipment
Floor type Material handling
1. Hand Trucks
2. Truck tractors
3. Power Lift Trucks
4. Stackers
5. Gravity-roll conveyors
6. Power conveyors
1
2
3
4
5
6
Overhead type
1. Chain conveyors
2. Cranes
3. Tram-rail monorail hoist

1
2
3
11-7.2 Selecting the Equipment
Same equipment-replacement policy
Criteria includes
1. Direct costs ex. rents
2. Indirect costs - ex. taxes
3. Intangible factors - ex. better working conditions