Mansoon had arrived and we all hope this year to get good and proper timed rains leading to good production of agriculture items. Till last week in the journey of Supply Chain Management (SCM) we studied the material movement in Stores. In this blog we shall study how the stores also manages to provide services to the company.
There are mainly two type of services.
The business term for the entity which provides services is called as Subcontractor or simply Contractors.
We shall look into them one by one.
1. Service with Material Going out of factory and returning back: In this the items/materials are provided to the Subcontractor to carry out work. After finishing of the work the Items are returned back to the company. In this also there are two types depending the Item which is sent outside.
i. Products: Many industries subcontract (Outsource) some of their production processes. In this case the Item is the intermediate stage product which is sent outside and the process is done in the subcontractor factory and returned back after the process. There are certain legal documents required to send outside and get it back related to excise. Since this is continuous and predefined process there will be agreement with Subcontractors mostly yearly contracts and as soon as production department provides the intermediate stage products the stores will send them to the Subcontractor decided by the PPC department.
ii. Materials: One of the typical examples to this type is motor winding, printing cartage filling etc. In this case the items are usually used by various departments, hence it is obvious that stores will not be knowing when to send the Item for service. So the owning department has to request for service for the item to the stores same as Store Requisition. Here also in some of the cases yearly contract will be present between subcontractor and the company. However in special cases purchase requisition is to be raised to the purchase department to create purchase order for the subcontractor. The material is sent to the subcontractor decided mutually by the user department and purchase.
2. Service inside the factory with Material and Man: For some of the big machines or buildings and other establishment the services needed for them is to be done inside factory premises. The procedure of requisition and further contracts are similar to one explained above. The workmen from Subcontractor will come inside the factory and does the work. Same conditions also works for software implementations or training programs etc and getting manpower on contract basis from a Subcontractor. Even though these are taken care by IT and Administration department involvement of stores is also present.
These are the typical functions of Stores department. Further we shall move onto Logistic department in coming week's blog. Keep watching this space..
There are mainly two type of services.
1. Service with Material Going out of factory and returning back.
2. Service inside the factory with Material and Man.
The business term for the entity which provides services is called as Subcontractor or simply Contractors.
We shall look into them one by one.
1. Service with Material Going out of factory and returning back: In this the items/materials are provided to the Subcontractor to carry out work. After finishing of the work the Items are returned back to the company. In this also there are two types depending the Item which is sent outside.
i. Products: Many industries subcontract (Outsource) some of their production processes. In this case the Item is the intermediate stage product which is sent outside and the process is done in the subcontractor factory and returned back after the process. There are certain legal documents required to send outside and get it back related to excise. Since this is continuous and predefined process there will be agreement with Subcontractors mostly yearly contracts and as soon as production department provides the intermediate stage products the stores will send them to the Subcontractor decided by the PPC department.
ii. Materials: One of the typical examples to this type is motor winding, printing cartage filling etc. In this case the items are usually used by various departments, hence it is obvious that stores will not be knowing when to send the Item for service. So the owning department has to request for service for the item to the stores same as Store Requisition. Here also in some of the cases yearly contract will be present between subcontractor and the company. However in special cases purchase requisition is to be raised to the purchase department to create purchase order for the subcontractor. The material is sent to the subcontractor decided mutually by the user department and purchase.
2. Service inside the factory with Material and Man: For some of the big machines or buildings and other establishment the services needed for them is to be done inside factory premises. The procedure of requisition and further contracts are similar to one explained above. The workmen from Subcontractor will come inside the factory and does the work. Same conditions also works for software implementations or training programs etc and getting manpower on contract basis from a Subcontractor. Even though these are taken care by IT and Administration department involvement of stores is also present.
These are the typical functions of Stores department. Further we shall move onto Logistic department in coming week's blog. Keep watching this space..
Thanks Ayesha. You are welcome to the blog.
ReplyDeleteThis blog is very informative. I'm glad I got the chance to browse this.
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