ERP Functions: Supply Chain Management 4

Lets continue the journey of Supply Chain Management (SCM). Last week we have seen how the materials are stored in different storage locations and with different methods of storing them. Here we shall see the procedure for material entering into and exiting from the stores.

We know that for any material to come in Purchase department will raise the purchase order to the supplier. Supplier send the material to the factory. Material is received in the stores department of the factory. Material comes along with a document from supplier namely Invoice (Bill) or Delivery Challan which has details of the Material supplied. Details are like Company Purchase Order Number, Material name, Qty, Price, Additional Charges, Taxes. 

Stores will be receiving a copy of purchase order from the purchase department when a purchase order is raised by the Purchase department. So when the material is received for the purchase order the stores has to verify the details of the supplier invoice and the material with the purchase order copy they are having. Once the verification is done and details are proper stores will prepare a document of receiving the material. This document is called Goods Received Notes (GRN). This GRN will be kind of replica of the supplier invoice.

Since GRN is confirmation document of the receiving of material from the supplier inside the factory. This document holds value in payment to the supplier. Hence the copy of GRN is send to Finance department. There are some materials which requires Quality Inspection before making it available for using in user department. Hence quality inspection needs to be done. So copy of GRN is also sent to Quality Department.

For those materials which are not having any incoming inspection the material received will be directly available in stock for issue to departments. For those requiring inspection will not be available in stock till the inspection is done and OK qty and Rejections are bifurcated. Only OK qty is treated as accepted qty and will be available in stock for the issue to the departments.

This is brief about how the material is received and documented and become available in stock. Coming further is how the material is issued to various departments and how the stores manages different kind of other transactions within the stores.

Keep watching this space..