1. Stores Management and Stock Control
Lecture Notes Series
By
Gabriel Lubale
Phone: +254726 934 441
Email: gabriellubale@yahoo.com
Website: http://www.gabriellubale.com

2. TABLE OF CONTENTS
LECTURE NOTES I: THE IMPORTANCE OF STORES MANAGEMENT .............................. 2
LECTURE NOTES II: IDENTIFICATION OF MATERIALS AND CODING SYSTEMS ........ 9
LECTURE NOTES III: TOPIC: RECORDS AND RELATED SYSTEMS ................................. 13
LECTURE NOTES IV: STOCK TAKING AND STOCK CHECKING ..................................... 25
LECTURE NOTES V: STOCK CONTROL ................................................................................... 26
LECTURE NOTES VI: ECONOMIC ORDER QUANTITY ........................................................ 28
LECTURE NOTES VII: STOCK LEVELS ..................................................................................... 31
LECTURE NOTES VIII: WAREHOUSING LOCATION AND SECURITY ............................. 33
REFERENCES .................................................................................................................................... 41
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3. LECTURE NOTES I: THE IMPORTANCE OF STORES MANAGEMENT
Introduction
In an enterprise with a small quantity of stock, one person might be placed in charge of it, if
the owner/manager does not look after it himself. Where the volume of stock is too large to
be handled on a part-time basis, one or more storekeepers will be required. Enterprises with
large quantities of stock must employ trained stores personnel (storekeepers, clerks, etc)
under the control of a Stores Manager (who might go by the designation of Head or Chief
Storekeeper, Stock Controller, Stores Administrator, or a similar title).
It is impossible to state at what stage a Stores Manager will be appointed by a particular
enterprise, as circumstances and sizes vary so greatly. But whatever its size and the volume
of its stocks, the success of the enterprise can depend to a large extent on the efficient
management of its Store and stocks.
Let us now examine why that is so.
1. All the possessions of an enterprise - that is, what it owns - are called its ‘assets’.
Frequently the value of the stocks of goods and/or materials held in its Store is as great as - if
not greater than - the total value of all its other possessions - e.g. land and/or buildings, plant,
machinery, motor vehicles, equipment, etc., and, of course, money and investments - added
together!
2. The items and/or materials in the Store cost money; if, through bad Stores Management,
there are too many held in the Store or if the wrong items or materials are being held, money
will be “tied up” - money which might be required to buy other, needed items and/or
materials or to pay the many expenses involved in running the enterprise.
3. Conversely, if poor stores management has led to shortages of needed items and materials,
there will be hold-ups and interruptions in production, or losses of production and/or losses of
sales to customers and, indeed, losses of the customers themselves, and losses of profits
which can in turn lead to job losses and - in extreme cases - to the collapse of the enterprise.
4. If items in the Store are lost, stolen or damaged in any way, the enterprise loses money.
5. And it costs money to run the Store - on building maintenance and/or rent, on salaries of
stores personnel, on containers and equipment, on heating or cooling, on lighting and power,
etc. – and the enterprise must receive a “return” from its expenditure, in terms of efficiency,
particularly as its Stores is “nonproductive” (a matter which we return to later in this
Module).
What is involved in Stores Management?
Stores management is concerned with ensuring that all the activities involved in storekeeping
and stock control are carried out efficiently and economically by those employed in the Store.
In many cases it will also encompass the recruitment, selection, induction and the training of
stores personnel, and much more.
The work of any manager comprises two different aspects:
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4. the ‘technical’ aspect, which is concerned with the work to be performed in the section,
department or enterprise concerned.
the ‘human’ aspect, which is concerned directly with the people who are employed to
perform that work.
The ‘technical’ work of different managers might vary considerably; thus, the technical (and
we use the word in the widest sense of its meaning) work of a factory manager will be very
different from the technical work of a sales manager or a store’s manager or an office
manager, etc. Even the technical work of two stores managers working for two different
enterprises might differ in many areas.
However, the ‘human’ aspect of the work of ALL managers must be similar because it
involves managing the activities of other people.
The management of people is an art; men and women are unpredictable and each person has
his or her own different and complex character. The management of human beings requires
the provision of leadership for a group of people and more; they require training, advice and
guidance, supervision and control, and their work must be so organised and co-ordinated that
they work together as a team to achieve a stated objective - which in the case of stores
management is the efficient running of the Store of an enterprise.
What is involved in Storekeeping?
The term storekeeping covers the actual handling of the items or materials received into, held
in and issued from the Store. The work involves:
•
receiving items and materials, including the inspection of them;
•
storing the various stock items in the most appropriate fashion, binning and/or racking
them by the best methods, and placing them in such a way that any item or material in
the Store can be located quickly and easily when it is required;
•
ensuring the safety of all items and materials whilst in the Store - that is, protecting
them from pilfering, theft, damage and deterioration; and
•
ensuring, when necessary, that items issued from the Store are so packed that they
will not be damaged or caused to deteriorate whilst in transit to their destinations.
What is involved in Stock Control?
Stock control comprises mainly the clerical and administrative functions of stores work. It
involves:
•
Ensuring that the right types and qualities of items needed for production, sale and
distribution, are always available when required;
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5. •
ensuring that stock is issued in the correct sequence, that is, “first in first out”, so that
“older” stock is not allowed to deteriorate by being kept too long in the Store, for
instance because it has been hidden from view by more recently received stock;
•
maintaining records showing the “movement” of items into and out of the Store,
controlling and monitoring those movements and maintaining full records of the items
in the Store;
•
ensuring that the correct “stock levels” of the various items are set and are
maintained, that orders and reorders are made (or requested to be made) in good time,
and that what is ordered is received;
•
checking, counting or otherwise measuring stock to ensure that records are accurate
and that no losses are occurring due to pilfering, theft, damage or poor storage;
•
pricing and valuing the items in the Store.
Stocks – Grouping of enterprise types
The range of items and materials - stocks - which might be held in Stores is huge. The variety
and quantity of items and materials held in the Store of a particular enterprise will depend on
its size and on its range of activities. Broadly speaking, the various activities of different
enterprises can be divided according to the Four main groups of enterprises:
i.
Industrial Enterprises e.g. Mumias Sugar Company Ltd.,
ii.
Trading Enterprises e.g. Uchumi Supermarket
iii.
Service Enterprises e.g. Kenya Airways Ltd., (KQ)
iv.
Multi-Activity Enterprises e.g. Tuskys Supermarket and Equity Bank Ltd – financial
Services
Industrial Enterprises
Into this group fall enterprises like mines, which extract raw materials such as oil, coal, iron,
etc., which are in general sold to other enterprises for use as power or for use in manufacture.
Agriculture and fishing are also classified as extractive.
Other enterprises in this category are classified as processing or refining because they
“process” the raw materials and, in so doing, alter their original form into more useful or
saleable forms.
Still other industrial enterprises are involved in using the raw or processed materials in the
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6. manufacture - in factories or in workshops - of the wide range of products available on the
market today, or in producing components which will form part of the final products of other
manufacturers. In addition, there are industrial enterprises involved in construction and allied
fields.
Trading Enterprises
In this group the range of enterprises in this group is very wide, but the common activity is
the buying and selling of the raw materials, components and products produced by the
industrial enterprises.
Enterprises involved in trading range from small one-man shops and kiosks to huge
supermarkets, departmental stores, hypermarkets and shopping centres. Some trading
enterprises are involved in wholesaling; they purchase products from their producers in large
quantities, and then sell them in smaller quantities to retailers, who in turn sell them,
generally in even smaller quantities, to their customers, who might or might not be the final
consumers. Some larger trading concerns might eliminate wholesalers - often called
“middlemen” - by buying direct from the producers.
Service Enterprises
Frequently the services provided involve the performance of some work, only the results of
which might be seen; examples include banking, finance, transport, maintenance of
machinery, etc., and the provision of insurance cover.
Besides those already mentioned, services are provided by such diverse businesses as hotels,
restaurants, estate agents, computer bureaux, travel agents, tailors, electricians, hair dressers
and barbers, and many more. (Note that certain services are provided by persons who do not
consider themselves to be “in business”, e.g. accountants, doctors, lawyers, dentists, auditors,
etc. They refer to themselves as being in “the professions”, although their services are rarely
provided without charge!).
There are also enterprises which provide specialized services which are called utilities. These
include enterprises - often fully or partly state-owned and run - which provide supplies of
electricity, water and gas, as well as sewerage, post and telecommunications, and similar
services, often on a national or on a regional scale.
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7. Multi-activity Enterprises
There are, of course, some enterprises which fall into more than one of the three major
groups. For example, a business might operate a factory, and then sell the products of its
factory from its own shop(s) - and is thus involved in both industrial and trading activities.
Another enterprise might sell, say, office machines and also provide a maintenance service
for those machines, and so is involved in both trading and service-providing activities.
The Stores Function and its interrelationships with other Functional Departments
Introduction
You will have noted that earlier we stated that the Stores Department has a nonproductive
function. We can now explain what we meant. Departments of an enterprise such as its Sales
Department and/or its Production Department are directly involved in the primary or revenueearning functions of that enterprise. Their functions - or activities - are designed to bring
money into the enterprise as the result of producing and/or selling goods or services. For
example, if an enterprise has a Production Department, its function is to make or manufacture
goods or other items which will be sold to bring in money. The whole function of the Sales
Department of an enterprise is to sell goods or other items (whether produced internally or
purchased for resale from other enterprises) and/or services, in return for which customers
will pay money to the enterprise.
In contrast, the Stores Department of an enterprise does NOT make or - in general - sell
goods or services to customers. Its function is to: Provide a SERVICE to the rest of the
enterprise of which it is part. The SERVICE provided by the Stores Department is
ESSENTIAL to all other parts of the enterprise, because it is basically intended: To ensure
that all other sections or departments of the enterprise are furnished, when required, with the
correct items, in the correct quantities and of the correct qualities.
As we explained earlier, the standard of the service provided by the Stores Department will
affect the efficiency and profitability of the entire enterprise of which it is a part. Obviously,
the Stores Department cannot be expected to provide the best service unless it receives
adequate information from other departments. Furthermore, it must work closely in cooperation and co-ordination with those other departments. The departments with which the
Stores will have contact will, of course, depend on the activities in which an enterprise is
engaged. However, we now look briefly at some of the major departments with which close
contact by Stores Departments might be necessary.
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8. The Relationships
The Stores and the Production Department and the Sales Department
As the Stores Department must ensure that all items, materials and tools, as well as spare
parts for machinery, are always available for continuous, uninterrupted production, it requires
adequate warning about expected future needs, in terms of types, quantities, qualities (and
possibly even colours). Stores might also have responsibility for quality control and for
inspection (although these might be the responsibility of a separate department which, again,
must work closely with the Stores). The Diagrams below shows the Interrelationship between
the Stores Department and other two Departments – Production and Sales.
Figure 1: The Relationship between the stores and production Department
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9. Figure 2: The Relationship between the Stores and Sales Departments
8

10. LECTURE NOTES II: IDENTIFICATION OF MATERIALS AND CODING
SYSTEMS
Definition of Identification
This refers to classification and codification of stores / Materials.
Definition of Classification
This is the division of stores into different groups based on similarities or technical affinity.
Definition of Codification
This is a system of symbols designed to be applied to a classified set of items to give a brief
accurate reference, facilitating entry, collation and analysis.
Classification of stores
These are the common classes are:
i.
Raw materials e.g. Cotton, Sugarcane etc
ii.
Consumables e.g. fuels, petrol, rivets etc
iii.
Machinery and equipments e.g. Bench vice, grinder, wheel barrow etc
iv.
Inflammable stores e.g. methylated spirit, thinner – paint solvents etc
v.
Chemicals e.g. Acids, elements like potassium etc
vi.
Furniture e.g. Desks, tables, shelves etc
vii.
Scrap Materials e.g. residual value engine parts, fish and chicken from firms
viii.
Packaging materials e.g. Paper, wood, straw etc
ix.
Fuel Stocks e.g. Coal, crude oil etc
x.
Defective Goods e.g. Bata Mini Shops products
xi.
Dead Inventory e.g. John Deere Tractor Spare Parts in Mumias Sugar Company
Books etc
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11. xii.
General Stores e.g. Uniforms, brushes etc.
CONDITIONS OF STORES / MATERIALS: WHAT ARE THEIR STATES?
•
Serviceable and unserviceable
•
Finished, semi-finished and unfinished
•
Dead Stock items or obsolete stores
•
Unused Stock
IMPORTANCE OF CLASSIFICATION: WHAT IS THE NEED FOR?
It helps the firm in these areas:
i.
Controlling stock
ii.
Purchasing
iii.
Selling / Distributing
iv.
Storing
v.
Accounting
CODIFICATION
Advantages /Merits/ Benefits of Codification
•
Helps to avoid the long and unwieldy description,
•
Provides accurate and logical identification,
•
Prevents duplication and repetition,
•
Helps in standardization,
•
Reduces varieties,
•
Helps to create an efficient purchasing function department,
•
Simplifies and facilitates the mechanical recording,
•
Creates an efficient accounting system; accounting is the systematic recording of
items in the monetary terms e.g.in Kshs, In Euros etc
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12. •
Simplifies and facilitates the pricing and costing,
•
Ensures a proper system of location and indexing,
•
Ensures a correct and efficient inspection,
•
Ensures the production plan is implemented as required.
Disadvantages / Demerits of Codification
•
Mistakes in coding
•
Herculean task to detect the coding mistake
•
Misunderstanding the codification
•
Challenge of the choice codification e.g. numbering often large numbering in one
group
•
Use of dummy codes
CODIFICATION SYSTEM
Characteristics
A code system should have the following characteristics to be scientific and easily adoptable:
•
Simple to use: easy to understand with minimum and /or no need for training,
•
Flexible: ease to expand and accommodate more codes,
•
Good formulation: adopted system should be able to be used in all functional areas in
the entire organization.
Common Codification Systems
i.
Alphabetical – the use of the letter of the alphabet as the basis e.g. Iron ore rep. I-O
etc
ii.
Numerical – the use of the numbers as the basis of the codes e.g. simple number 01,
02, or complex systems which combines “/” – strokes or “–“ dashes e.g. 1-100, 2-200
etc
iii.
Alpha-numeric – the combination of alphabets and numbers. This is the mixing of
numbers and letters of the alphabets e.g. SP-11 etc
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13. iv.
Decimal – the use dash or stroke in the coding e.g. Main, Sub I, sub II an sub III e.g.
47.1.1 etc
v.
Brisch – this is the use of numeric system. It combines numbers and decimals. E.g.
47.002
vi.
Kodak – this originated by Eastman Kodak Co. of the USA. This system borrows all
the good points from all other systems. It is much based on the numerical codification
system and in the place of decimals hyphens are used in the Kodak System.
Marking of stores / materials
This is another method of codification. There are two types of marking of stores:
Types
i.
Color marking – this is used to supplement the other codification systems e.g. use of
paint such as blue, red, aluminum etc
ii.
Secret Marking – expensive stores items are highly susceptible to theft and pilferage.
These are discreetly marked to help detect / identify from where they have been sold
out. The secret marks are not easily visible.
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14. LECTURE NOTES III: TOPIC: RECORDS AND RELATED SYSTEMS
Bin card
Bin Card is also called as Cardex, Tag Card etc. The detailed information about the materials
is contained in the Bin Card. Normally Bin Card Consists of the information like Qty
Received, Qty Issued, Minimum Stock Level, Maximum Stock Level, Reorder Level, Re
Order Quantity, Closing Stock, Opening Stock etc. Maintenance of Bin Card System is part
of perpetual inventory accounting system.
Bin card is a record of receipt and issue of materials Quantity of store received is entered
with receipt column and the quantity of store issued is recorded in the issue column of Bin
Card. Balance of quantity of stores is ascertained after every receipt or issue. It shows the
balance of the stock at any moment of time. Bin Card is maintained by the store-keeper. He is
answerable for any difference between physical store and the balance shown by the Bin Card.
Thus Bin Card does not only records the receipt an issue of the stores but also assist the store
keeper for control of the stock. For each item of stores minimum level maximum level, and
ordering level are shown in the part of the Bin Card. A bin card is also known as bin tag or
stock card and is usually hung up or placed in shelf, rack or bin where the material has been
kept. Bin cards can also be in the form of loose sheets which can be maintained in a ledger
kept in the stores.
Figure 3: Sample of BIN Card
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15. Figure 4: Sample of an Electronic BIN Card
Figure 5: Sample of an Electronic BIN Card
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16. STOCK - ACCOUNTING
This is the process of recording details of stock movement and balances both in value and
quantity.
Documentation
The documents used for stock accounting varies depending on the levels at which it is done.
At the Central and Branch stores the Stock Record Card is used to record the stock movement,
annual consumption and records of the orders placed.
Stock Record Card (SRC)
SRC shows the basic information contained in a Stock Record Card. This document
can be made available in various sizes, shapes and the information on it varied to suit
the needs of Companies / Institutions. Standard Stock Record Cards are also available
in the market and Companies / Institutions can adapt them to their needs. These cards
can also be modified so that they are suitable for recording information on permanent
(durable) items which have more particulars to be recorded than the consumable items.
Posting of Stock Record Cards
Stock Record cards contain vital information on stocks and are a source of data on various
aspects of stock items and their consumption pattern. In order to make this information readily
available the following points should be noted by those responsible for entering information to
these cards:-
•
•
•
•
Cards to have printed serial numbers for accountability. A register to be maintained for
them to indicate where they are issued to.
Cards to be maintained neatly and figures clearly written during posting, wrong figure(s) to
be crossed neatly and correct ones entered on the next line.
receipts should preferably be posted in red ink and issue in blue or black.
information on orders placed should be posted on cards before the order is despatched to
the supplier. The total quantity issued in a year to be entered in the card at the end of that
year.
Keeping of Stock Record Cards
Stock Record Cards contain vital information on stocks and hence should be kept safely and
treated as accountable documents. The following are some of the systems that can ensure
safety and easy posting of these cards:-
•
Binders
• Various forms of binders exist which offer protection to stock record cards. These
binders also enable the cards to be arranged either in alphabetical order to any coding
system that may exist. Binders may also be available with standard cards. Safety of the
cards is ensured by locking the binders in cupboards or cabinets. These binders also
have facilities to allow removal or addition of Cards as the need may be.
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17. •
Visible Recorder Systems
• This system offers adequate security as it lockable. It is available in different sizes and
Companies / Institutions can buy the size that suits their requirements. The cards can be
arranged in the trays according to alphabetical order or any coding system to ease
posting.
•
Wooden Trays
• Stock-Record Cards which are made of Hard Manilla Paper can also be safely kept in
wooden boxes which can be provided with locks or locked in lockable
cabinets/cupboards.
•
Other Stock Records
• At the lower levels of the logistics and supply system, simplified forms of stock records
are maintained. These are may be simple ledgers, registers or cards that have adapted to
suit the needs of the information required. The staff who maintain these records are
also pre-occupied with their areas of specialisation and hence the maintenance of the
stock information should take minimum of their time.
CONTROL AND MAINTENANCE OF DURABLE EQUIPMENT
Financial Accounting of Durable Equipment
It is required that fixed assets, which include durable equipment, be capitalised and
depreciated over their estimated economic lives. The capitalised value is based on the
cost of the item i.e. purchase cost or the full C.I.F. cost to the port of entry if imported.
Issue and Documentation of Durable Equipment
Distribution
Normally durable items are supplied to Companies / Institutions as a result of a
Commodity Budget request and so the Companies / Institutions has already decided
where such items are to be used. Each item can therefore be despatched to its place of
use once the appropriate receipt and recording procedures have been completed.
If durable items have been requested in anticipation of an increased programme
activities or a new project which has not started before receipt of the item, it should be
held in the main store and only distributed when the need arises subsequently, should
the need cease to exist the item should be reported to the Provincial Office for disposal
instructions.
Documentation
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18. Issue document
Durable equipment are issued with the same document as consumables (using for
example - Requisition/Issue Voucher). The full details of the equipment e.g. make and
model number, manufacturer's serial number, etc. should be indicated under "item
description."
ASSETS RECORD CARD (REGISTER)
The Assets Record Card will be used for taking individual durable equipment on charge and
issuing it. In addition to this record, durable equipment Holding Record Cards should also be
maintained for all equipment held at each establishment. These cards will contain the
following information:-
•
•
•
•
The make and model of the equipment, manufacturer's serial numbers, initial cost,
maintenance/repairs/overhauls etc.
Establishment (Headquarters Office, Branch Office or Clinic) Storing or using the
equipment and any subsequent charges.
Depreciation details and the final disposal particulars.
A typical Durable Equipment Record Card, can be maintained in the forms
recommended for the Stock Record Cards.
Durable Equipment Holding Record
Every establishment (Headquarters Office, Branch Office, Clinic, etc.) storing or using durable
equipment should sign and keep a Durable Equipment Holding Record.
This document is usually prepared in three copies. The original copy is retained by the
Custodian (holder of the equipment) and is normal to display this document in the office for
ease of checking the equipment held by each office, the duplicate should be held by the
supplies Officer and the triplicate by the Senior Officer responsible for Administration.
Loan List
Certain Companies / Institutions may find it useful to install a "loan Property list" System to
record, allocate responsibility and control issues of Durable Equipment to Headquarters
Department, Branches, Chapters, Clinics etc. Who require them for regular use or need to keep
them outside the store rooms.
A separate loan list is to be prepared for headquarters department and for each branch and or
clinic.
Two copies of the loan list ledger pages are to be prepared by the Stores Office using the
carbon method. It is useful to prepare different pages for each type of item and keep each set
forms arranged alphabetically in separate folders with the loan list certificate attached inside.
The Departmental Head at headquarters delegated as the authorising controller for a particular
range of equipment should decide the allocation of the equipment held. He/She should
authorise the Stores Officer to issue Vouchers for each Loan List, obtain signature of receipt on
17

19. the form from the custodian appointed, and use these to credit the main stores ledger and debt
the relevant loan ledger page.
Additional items, quantities or replacements are to be requested by the Requisition form
process: SIVs or SRVs for returns are to be prepared by the Stores Officer, signed by the Loan
List Custodian, and used to adjust the records (SIVs to Credit the Stores Ledger and Debt the
Loan List, SRVs to credit the Loan List and Debit the Stores Ledger). For all these transactions,
subsequent to initial compilation, the Custodian is to make the relevant entries in the duplicate
copy of the Loan List from his/her copy of the issue or Receipt Voucher.
The Custodians should count the items recorded in their Loan List every six months and initial
and date, in the columns provided, each page in the Loan List as proof that this action has been
carried out. Every twelve months the stores office should compare the two copies of each Loan
List and ensure that they agree, complete his section of both certificates and obtain the
Custodian's signature on both copies.
The Stores Officer should keep a record of the Loan Lists raised and the dates that they are due
for annual inventory check. This will assist at audit and ensure that comparisons are carried out
before the Loan List is due for signature.
On change of Custodian the same procedures as described for the annual check is required.
The certificate is completed to show that the new Custodian signs accepting responsibility.
Care of Equipment
General
•
useful life of all equipment can be considerably prolonged if care is taken to use it and
maintain it correctly. Manufacturers' handbooks and operating manuals usually
provided with the equipment contain useful hints on how to care for the equipment.
•
in general equipment must be kept clean, dry and cool when not in use. When in use
they must be protected against dust and damp and physical shock. Careful maintenance
is an essential element in prolonging the life of equipment.
•
when selecting equipment for supply, purchasing and supply department takes into
account as far as possible the availability of local facilities for maintenance and repair.
Companies / Institutions should arrange maintenance contracts with local agents
because regular skilled maintenance prevents breakdown. The cost of maintenance
contracts is attributed to the Companies / Institutions administration expenditure and
provision should be made in the Cash Grant request each year and not the Commodity
Budget.
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20. Vehicles
•
•
•
•
Instructions in Handbooks to be carefully followed.
Periodic maintenance, recommended by the manufacturer, is an essential part of vehicle
care.
Companies / Institutions to contact local distributor/agent upon delivery of the vehicle
in order to comply with warranty agreement.
When not in use, vehicles to be under cover and protected from weather. Where
garages are not available, awnings to be constructed over the parking space to protect
vehicles from direct sunlight and from rain.
Daily Check-list on Vehicles
•
•
•
•
•
•
•
•
Tyres should be checked visually for wear, damage, the presence of Stones and correct
air pressure. Incorrect inflation is the most frequent cause of unnecessary tyre wear.
Oil, coolant and accumulator (battery) acid levels should be correctly maintained.
Inspection of the ground where a vehicle has been parked may show traces of oil or
coolant leaks.
Windscreens, windows, lights and mirrors should be cleaned.
The fuel level should be checked for correct working.
All lights should be checked for correct working
FIre extinguishers and First Aid Kits should be provided in each vehicle.
Ensure seat belts are operating correctly.
A check list may be issued to each driver to remind him to carry out these checks.
Vehicle Movement Control Sheet
A daily vehicle movement control sheet should be maintained for each of the Companies /
Institutions Vehicles. At the end of each month, a summary is prepared and analysed. The
Companies / Institution will find the information from these summaries very useful in
monitoring and controlling expenditure on vehicles.
Audio Visual Equipment
Most Audio Visual Equipment includes electronic devices, and damp, particularly in
high temperature, and physical shock are the main causes of the breakdown of
electronic equipment.
Storage
•
•
•
When not in use projectors, tape recorders and public address and amplifiers should be
stored in dry cool conditions preferably in an air conditioned place.
To reduce the risk of damage to delicate mechanisms they should be stored in such a
way that they do not need to be moved in periods between use and are not subject to
being knocked.
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21. •
•
•
If projectors are to be out of use for more than seven days and are not stored in an air
conditioned space the lenses should be removed, carefully wiped with dry cloth and
stored in as dry condition as possible to prevent the lens being damaged by fungus.
If battery operated recorders are to be out of use for more than seven days, the batteries
should be removed. In any case batteries should be regularly inspected as damaged
batteries can cause corrosion.
If for any reason electronic equipment is to be out of normal use for more than 14 days,
in humid conditions, it is advisable to switch it to regular intervals to allow it to run for
a few minutes to dry out.
Transporting Equipment
All electronic equipment must be transported with great care. If it is carried in a vehicle it
should be wrapped in some soft packing material and so placed in the vehicle that it cannot
move, or be subject to vibration. Preferably well padded boxes or shelving should be
constructed to hold equipment steady. Projector lamps should always be removed during
transportation and carried separately.
Before and during use
•
•
•
•
•
operators should ensure that equipment is securely placed before use.
tape recorders should be placed on hard smooth service during use as the ventilation
system may become blocked if the recorder is placed on soft material.
operators should ensure that the correct voltage is available before connecting
equipment to mains. They should also check that plugs and leads are in good condition.
earth wires, where provided on equipment, must be correctly connected.
lenses should be cleaned thoroughly before use.
After Use
It is important that projectors are allowed to cool thoroughly before they are moved.
Movement of the projector while the lamp is still hot very considerably shortens the life of the
lamp. (In one case this precaution has resulted in lamp life increasing form an average of four
to an average of over 60 hours).
Office Machinery
•
•
•
covers are initially provided for most items of office machinery and should be used
whenever the item is not in use. Covers when not provided should be made.
working parts of all machines should be kept free of dirt and lubricated in accordance
with the manufacturer's advice.
machines must be disconnected from the electricity supply before cleaning operations
begin particularly if cleaning involves removing any part of the machine casing.
Clinic Instruments
20

22. •
these should be sterilized after use and preferably stored in a special medical instrument
cabinet/drawer.
Computer Equipment
•
•
•
cover Computer Equipment (including printers and keyboards) when not in use to
protect from dust. High temperatures can contribute to problems, though airconditioning is not essential, ensure that venting is enough to remove the extra heat
generated by the computers themselves.
follow manufacturers' instructions about moving computers to protect components.
cleaning needs care and internal cleaning should be undertaken only by persons trained
in Computer maintenance.
Disposal of Durable Equipment
Durable equipment (DE)provided under the IPPF Commodity Grant Scheme is placed on
inventory on receipt by Companies / Institutions and Continuing possession of such items is
accountable annually to International Office.
•
•
removal of DE from Inventory may be achieved by mutual agreement between the
Companies / Institution concerned, its Provincial Bureau and International Office.
the written proposal to remove DE from inventory is initiated by the Companies /
Institution.
Circumstance occasioning removal
Proposals to adjust commodities on inventory charge may be made on Inventory Adjustment
Certificate for the following reasons:(i)
Item no longer required.
(ii)
It is beyond economical value.
(iii)
It is no longer of use.
(iv)
The item has been lost; or
(v)
The item has been lost or damaged due to staff negligence.
(vi)
Donation by Government.
NOTE: Requests for disposal may be originated by the Medical Superintendent, having
consulted the Executive Committee if he is required to do so.
The Inventory Adjustment Certificate is required to be sent through the Provincial Bureau for
information and in certain cases the Purchasing and Supply Department will need the advice of
the Provincial Director (or Provincial Officer Supplies). Should the "write-off" be agreed, the
21

23. Companies / Institution will be informed by means of a Removal of item from Inventory
Certificate issued by the Purchasing and Supply Department.
Disposal By Sale
When disposal by sale is approved by the International Office, the Companies / Institution
should consider whether local laws necessitate inclusion of the following safeguard clauses in
the Bill of sale.
Inspection
"The goods shall be open to inspection before any offer to purchase is made the purchaser is
made the purchaser shall be deemed to have inspected them and should he/she purchase
without previous inspection he/she shall do so at his/her risk".
Condition
"The goods are sold on "as is where is" basis and the purchaser shall have no claim against the
Companies / Institution concerning any faults".
Risk
"The Goods shall be and remain in every respect at the risk of the purchaser from the date of
purchase and the Companies / Institution shall not be under any liability for the safe custody or
preservation of the goods thereafter".
Removal
"Goods shall be removed by and at the expense of the purchaser and such removal shall be
completed within Seven (7) days of the date of sale".
Repairable Durable Equipment
For all unserviceable DE which have not been surveyed as "Beyond economical
repair" the following action should be taken without delay:Condition:
Repairable locally
Action:Obtain a quotation for the cost of repair. If this sum is not available from your
cash budget, inform the Companies / Institution . Always give the Identity Number and
Programme Year for the item concerned.
22

24. Condition:
Repairable locally with spares from International Office.
Action:List,Make/Model and Serial Number of equipment for which the Identity
Number and Programme Year for the item concerned.
List the actual spares required quoting markers part/reference order number where
available. If numbers are not available, a full description of the part required should be given
including photographs/drawings where possible.
The above information is essential if lengthy correspondence is to be avoided.
Spares Provision
It is planned as far as possible not to provide equipment to the Companies / Institution
unless there are local agents or facilities for maintenance in the country of that Companies /
Institution. Because of the need to standardise when purchasing equipment to achieve the
lower cost of bulk purchase this plan is not always achievable.
By providing equipment which is locally maintainable the Companies / Institutions hope to
ease the problem of obtaining spare parts.
When purchasing the following items an initial provision of spares and consumable
items will be included in the order:Projectors-
spare lamps and drive belts
Mimeographs (duplicating machines) - small stocks of ink and stencils.
Photocopiers - Paper and toner.
The Companies / Institutions are responsible for subsequent purchase of spares
locally. Some maintenance contracts may include provision of spares.
In some cases Companies / Institutions may be unable to purchase spares or consider the
local price too high. If the Ministry of Health is ready to assist in such cases and request for
assistance should be made to the Ministry Purchasing and Supply Department. When such
requests for assistance are made on the grounds that the local cost is to high, that cost should
be included in the request. Although the cost of direct supply from a manufacturer may
23

25. appear low, administrative cost and freight may bring the two prices to much the same. It is
essential that Companies / Institutions keep a separate note of the model numbers of
equipment, bulb references, chassis/engine numbers, etc. so that this necessary information
can be readily passed onto the Purchasing Manager and Supply Department when requesting
spares to be procured.
The cost of locally purchased spares and accessories are payable from the Companies /
Institution's cash budget and provision should be made in the appropriate place within the
Companies / Institution's annual budget.
Some Provincial Field Offices carry stocks of basic spare parts of A/V Equipment which can
be despatched to a Companies / Institution in need.
Maintenance contracts should be entered into wherever possible with the relevant
agent when vehicles are received. The cost of such contracts is attributable to the Companies
/ Institutions cash grant.
24

26. LECTURE NOTES IV: STOCK TAKING AND STOCK CHECKING
•
•
•
Stocktaking is the process of the physical verification of the quantities and conditions
of goods, usually on a periodic basis for the purpose of ensuring that an appropriate
figure appears in the organization accounts.
Stock checking is similar but may be done on an d hoc basis for operational reasons.
Stock audit involves an external agency and the purpose is verification.
VALUATION PROCESS
•
Materials that are used in too small a quantity to be worth identifying with individual
products, e.g. glue, string, are usually described as "supplies' or "indirect materials"
included in departmental or Companies / Institution overheads.
•
In budgeting for direct material costs it is necessary to consider separately the quantities
and qualities , varieties and unit prices of the materials to be used.
•
Issues to note:
1.
Choice of materials.
2.
Control of usage: is established by:
(a)
Measurement of the quantity of each materials used.
(b)
Counting or measuring the quantity or volume of output by products,
and multiplying by standard quantity of raw material per unit (from product formulae or
specifications).
(c)
Calculating the budgeted or standard usage of materials from (b) and
comparing with actual usage.
3.
The Price Factor.
4.
Pricing Material Issues.
25

27. LECTURE NOTES V: STOCK CONTROL
DEFINITION
Stock control or inventory management can be defined as the principles and procedures
necessary to regulate the amount of stock of items in order to meet economically the
demand for them. In Companies or Institutions, sound stock control ensures that the
stock of items at all levels of the logistics and supply system; is regulated so as to meet
the demand of the acceptors economically. It can be regarded as the "nerve centre" of
the logistics and supply system.
The application of sound and effective stock control principles and procedures aims to maintain
optimum stock levels, at all times, and within all levels, by considering and trying to
balance the following costs:i.
Ordering Cost – refers to the cost of placing an order and securing the supplies
includes the clerical costs and telecommunications cost (e-mail, fax and telephone).
ii.
Inventory Carrying Cost or Holding cost– refers to the cost of keeping the materials in
the storehouse. These include capital cost – cost of capital tied in, storage and
handling - warehousing, cost of deterioration and obsolescence, Insurance and other
related expenses.
iii.
costs of not holding stocks / Inadequate Inventory - This does not directly affect EOQ
but certainly affects the operation of the organization which may be stopped or
disrupted because of non-availability of materials either in required quantity or quality
or not available at all.
Terminologies
a). Costs of Holding Stocks
Some of the costs incurred by Companies / Institutions to maintain stocks of drugs and
other items include.:i.
ii.
iii.
iv.
v.
vi.
Loss of interest on cash invested in stocks.
Risk of obsolescence.
Cost of storage space. This includes costs of utilities (water, lighting)
maintenance, handling equipment etc.
Risk of theft, loss or damage during storage. The magnitude of this cost will
depend on the security, safety and preservation measures implemented by
Companies / Institutions.
Insurance. The bigger the stock-holding the higher the premium to be paid.
Personnel costs. People are needed to receive issue and maintain the stock
records.
These costs will increase as the value of stock-holding rises. It is estimated that these
costs combined could amount to as much as 20% of the stock value per year.
26

28. b). Costs of not-holding stocks
By not holding any or inadequate stocks, Companies / Institutions will incur some costs
which will include:i.Loss of quantity discounts because of not buying in bulk.
ii.Extra purchasing costs arising from emergency purchase which may necessitate use of
telephones, telex, fax, etc. and which may also lead to higher transportation costs.
iii.Disruption of programmes/activities due to lack of drugs and other requirements.
Although these costs are not easy to quantify in monetary terms their adverse affects to
Companies / Institutions activities could cause considerable indirect costs through
failure to achieve the set objectives.
Forecasting of requirements
"Forecasting" is predicting future events and is a primary component of logistics
management since other components of the logistics system depend on the quantities of
supplies to be managed.
There are three main methods of forecasting requirements:
i.Historical or consumption-Based: In order to ascertain forward requirements of
commodities, quantitative estimates are calculated based on the past consumption
rate. This method is suitable for old programmes where historical data and
consumption trends are available.
ii.Target- Based:
iii.Combination of Historical and Target -Based.
d). Lead Time
This is the length of time from the ordering of Drugs to the time the replacement stock is
available in the store ready for issue. It is made of the following elements:Administrative Time i.e. time taken to process the order document.
Delivery Time i.e. it includes shipping and transit time for goods purchased overseas
Receipt time i.e. time taken to receive, check and account for the items.
e). Safety (Buffer) Stock
This quantity is kept to meet possible increase in the consumption rate, unforeseen
eventualities, lengthening lead time, etc. It is normally calculated on a number of months
consumption rate usually depending upon the worst foreseeable lead time position.
f). Outstanding Orders
These are quantities that have been ordered but no deliveries have been made.
27

29. LECTURE NOTES VI: ECONOMIC ORDER QUANTITY
EOQ is refers to the size of the order that gives maximum economy in purchasing the
materials. EOQ is also called Optimum or Standard Order Quantity.
The investment in inventory accounts for a significant portion of the Working Capital in any
enterprise. It is therefore, imperative that management should exercise a special care in planning
and controlling investment in Inventory. The objective of Inventory Management is to ensure
adequate supply of inventory, with least possible investment in it. The larger the inventory the
more convenient it would be for Companies / Institution planning, but an increase in the
Inventory Carrying Costs. Buying in bigger lots would reduce the frequency of buying. This
would in turn reduce the total cost of ordering and also enable obtaining more advantageous
terms of supply. At the same time, bigger orders lead to bigger Inventories and higher carrying
costs. It therefore becomes necessary to balance the costs and benefits of buying the inventory
in several possible lot quantities and then to evolve the most Economic Order Size or Quantity
(EOQ).
The following formula is used for computing the EOQ:EOQ = 2CD
IP
Where:C – Delivery Cost per batch
D- Annual Demand for product
I – Stock Holding cost per annum (expressed as a fraction of stock value)
P – Cost Price per item
Illustration I
A Company’s annual demand for material is 25,000 tonnes per annum. The cost price per
tonne is Kshs 2,000 and the Stockholding is 25% per annum of the stock value. Delivery cost
per batch is Kshs 400.
Required Calculate the EOQ for the Company and explain your answer.
28

30. = 200 units
It means that 200 units must be purchased at one time. If the batch size is more than or less
than 200 units then stock holding and ordering costs will be vary unfavorably to the bottom
line..
Illustration II
Assume that D=2,000 units, C =Sh.98/-;I=20%, P=Sh.4,000/-.
The Economic Order Quantity is computed as follows:
EOQ =
2CD
IP
EOQ =
√2 x 2,000 x 98
= √392,000
0.2 x 4,000
800
29
√490 = 22 Units

31. EOQ formula with a worked Example – llustration III
30

32. LECTURE NOTES VII: STOCK LEVELS
Figure 6: Stock Levels
Four stock-levels need to be constantly monitored, at all levels, in a logistics system:•
•
•
•
maximum stock level
minimum stock level
Re-order level
Average Level
Maximum stock level
This is the greatest quantity of an item that may be held at one time at any of the stockholding levels within the logistics system.
Though, usually, this upper limit is at times allowed to be variable, the existing
guidelines on maximum stock recommend as follows:-
31

33. •
•
•
•
•
•
•
Companies / Institutions Headquarters to hold stocks adequate to sustain services
during lead time of 9 months.
Branches to take into account the following factors in order to determine their
maximum stock levels; which in any case are not expected to be above 3 months'
requirements:lead time from the central store
available storage space
personnel to manage stocks
geographical location and other constraints e.g transportation.
Clinics to hold 1 months' stock depending on storage facilities, location and issue
rate.
Minimum Stock Level
This is the quantity of an item that should be held as a Cushion to guard against delayed
delivery of replacement order. This quantity enables the normal issue rate to be
sustained pending the replacement order. The determination of quantity is dependent
on the lead time from the source of supplies.
Maintenance of Stock-Levels
Stock levels are maintained by scheduled reviews which should be carried out as per the
following guidelines:•
•
headquarters to have two stock reviews in a year; one in June during the preparation of
half year reports and other in September during preparation of annual budgets.
the other stock-holding levels to carry out stock reviews on monthly basis at the item of
preparation and analysis of monthly stock returns.
Lead Time (Already discussed under the terminologies)
This is the length of time from the date the order is raised to time replenishment stock is ready
for issue. This time is made up of various elements, some of which are within the control of
Companies / Institutions, as follows:•
•
•
•
administrative time taken to finalise the order and despatch it to the source of supply.
production or manufacturing time (in case of orders)
delivery time which will includes shipping (in case of goods purchased from overseas
and clearing through ports and customs authorities.
receipt time, which involves receiving, checking (quality & quantity) and supplies
accounting before they are ready for issue.
32

34. LECTURE NOTES VIII: WAREHOUSING LOCATION AND SECURITY
Definitions
Warehouse is derived from a combination of two words. “Ware” and “house”. Warehouse –
is the place where the goods are stored. It means:
1. granary, barn, silo, grain elevator, storeroom, hayloft.
2. store, depository, depot, stockroom, repository, storeroom
Warehousing
This is the process which involves holding and preserving of goods between the time of their
production and the time of their utilization.
Types of Warehouses
1. Private – These are owned and operated by individuals. This is for their personal storage
needs or as a business to lease-out to those who require.
2. Public – these are specialized business establishment; common are Co-operative Societies,
Parastatals etc that provides storage facilities to the general public for a charge or fees.
3. Bonded – these are licensed by the Government to accept imported goods for storage until
payment of Customs Duty and other related levies – KEBS, Port Health etc. Bonded
warehouses are operated by the Government Agencies and /or if privately owned under the
control of Customs Authorities and Port Police.
Functions of Warehouses
1. To regulate Production – i.e. store when there less demand or high supply,
2. To utilize time – by bridging the time gap between the production and
consumption,
33

35. 3. To store surplus produce,
4. To stabilize price – release the goods at optimum demand and supply levels,
5. To minimize the risk goods are exposed to such as bad weather conditions, theft,
damage and fire.
6. To facilitate packing and grading. Example the pack-house of fresh produce
warehouse,
7. To accumulate asset to be use in business finance – stocks are accepted as
collateral security by Banks or Lenders.
Factors to consider when selecting the location of warehouse
1. The number of markets to be serviced
2. The location of the production centre
3. Quality of Transportation
4. Quantity of Transportation
5. Versatility (adaptability) of transportation system.
CHECK LIST FOR A WAREHOUSE SECURITY MEASURES
A case of Preventing Food Contamination
a). OUTSIDE PREMISES
i.
Have the boundaries of the facility been clearly identified as to areas within
which access should be limited or controlled?
ii.
Are measures in place (e.g., fencing or other barriers) to prevent unauthorized
access within the boundaries of the facility?
iii.
Are all structures within this boundary (and their contents) identified as appropriate?
iv.
Are outside lighting levels adequate?
v.
Is access to this restricted area controlled, e.g., guards, access cards, etc.?
34

36. vi.
Are after-hours (including weekends and holidays) security measures in place?
vii.
Are there areas within the restricted boundaries that are of greater concern than
others, e.g., outside storage tanks for cleaning chemicals, coolant, ingredients, etc?
viii.
If so, is access to these areas limited or monitored? Is the frequency of
monitoring sufficient to detect any abnormalities?
ix.
Has responsibility for monitoring and controlling these areas been clearly defined?
Do the individuals performing this monitoring have authority to take immediate
action if there are signs that may indicate a problem?
x.
Are specific procedures outlined for investigating any food security situation that
might be identified outside the facility?
xi.
Are there procedures in place for handling deliveries to this area?
xii.
Are incoming transport vehicles inspected for evidence of possible product
contamination?
xiii.
Have the normal routes for personnel entry to/exit from the facility been assessed?
Are all points monitored or controlled? Can the number of entry/exit points be
reduced without violating the National Fire Codes or otherwise hindering building
egress in case of emergencies?
xiv.
Are there restrictions on the entrances to certain areas or zones for different
employees?
xv.
Are there other entrances to the facility that are not normally used as points of
entry/exit, i.e., escape doors, equipment room entrances, heating/ac ducts,
windows, trash ducts, pipes, lines, etc?
xvi.
Is access to these areas restricted to certain individuals or otherwise controlled?
xvii.
Has the proximity of loading docks for receiving and shipping to restricted areas
been assessed? Is access to these areas restricted?
xviii.
Are procedures in place for the trucks entering the facility boundaries?
xix.
If there is a waiting room for drivers, is access from there to other parts of the facility
controlled?
xx.
Are there documented procedures for the inspection of deliveries prior to entering the
facility?
35

37. b). INSIDE PREMISES
i.
ii.
Are specific procedures outlined for investigating any food security situation
that might be identified inside the plant?
Is there a program in place that identifies how restricted areas (zones) within
the plant are segregated and how access is controlled?
iii.
Are plans available that identify all entrances/exits, as well as connections to other
areas through openings for vents, air circulation lines, pipes, electrical lines, drains,
etc.?
iv.
Are areas of concern identified and programs in place to prevent security breaches
with respect to control panels, air circulation lines, electrical boxes, gas or pressure
valves, etc?
v.
Is consideration given to the potential for certain equipment to be clandestinely
accessed for the purpose of introducing a contaminant?
vi.
Is there an emergency plan that identifies all areas in which products and ingredients
are handled and stored (e.g., off-site warehouses, product chillers, controlled
atmosphere storage facilities)?
vii.
Are lines that handle and transfer products, water, syrup, oil, etc. inspected and/or
monitored?
viii.
Are computer hardware and software and paper records that document food
production controls backed up and secure? Are passwords used? If so, is access to
these passwords controlled and are they changed periodically?
c). Incoming products and supplies
i.
Do you know your suppliers? Do you buy only from contracted suppliers or do you
buy some products from the open market? Have food security controls been
addressed with the suppliers, i.e., have suppliers been made aware of food security
issues and implemented appropriate controls?
ii.
Are incoming ingredients, supplies and their shipping containers inspected?
Are lots of ingredients and supplies uniquely identified?
iii.
Are tamper-evident packaging features used when available for certain ingredients
and supplies? Are packages inspected prior to opening?
iv.
Are records of previous products transported in tankers, railcars, shipping
containers, etc. maintained? Are the records reviewed?
v.
With respect to farm practices, have your suppliers instituted food security programs
to address potential risks on the farm? Are your suppliers vigilant for unusual traffic,
flyovers or occurrences?
36

38. vi.
If off-site facilities (e.g., controlled atmosphere rooms) are used for holding
products or ingredients prior to processing, are they configured and monitored to
handle and hold products securely?
vii.
Does the plant have a program in place to identify all sources of water used in the
facility (both potable and non-potable sources) and are security measures associated
with each source of water? Does this program include a procedure for testing
potable water with respect to federal/state/local water quality standards?
viii.
If a municipal water supply is used, are there predetermined procedures for prompt
two-way communications with responsible municipal officials in the event of any
abnormalities in this supply?
d). Transport Security Procedures
i.
Have security procedures been developed and implemented for drivers when docking
or stopping for meals, gas, breakdowns, etc.?
ii.
Are there predetermined protocols for drivers when faced with suspicious
circumstances?
iii.
Is there a requirement that drivers keep trailers locked down at all times?
iv.
Is there a capability for verification of driver location and load at any time?
e). Product Batching and Work Areas
i.
Are there areas where employees mix or batch products or ingredients by
themselves without supervision or a coworker present?
ii.
What types of controls are in place during batching of product to prevent employee
tampering?
iii.
Have points where clandestine access to product is possible been identified? Can
these points be minimized or monitored?
iv.
Are there specific procedures that define how product is to be reworked? Are
products to be reworked and related records/documentation properly identified
and handled securely?
v.
Are programs in place that identify procedures to follow in the event an intentional
contamination occurs during the production process? Does this program include all
product involved, i.e., finished product rework, any ingredients and product
identified as seconds? Are specific areas, transportation and other handling
concerns discussed as a part of this program?
vi.
Are procedures and physical barriers (e.g., locks, keyed access by authorized
personnel only) in place to restrict access to hazardous compounds such as nitrite,
cleaning and sanitizing chemicals, pesticides, etc? Are these materials properly
37

39. labeled?
vii.
Are areas in which large amounts of product are exposed, (e.g., vats, kettles,
tanks, chillers, cooler, etc.) restricted?
viii.
Are controls in place for contract workers, i.e., sanitation crews, pest control,
etc., to prevent intentional contamination of product?
ix.
Is access by contractors and their employees to the facility limited to only those areas
of the plant relevant to their work?
x.
Are programs in place for instruction/training when contractors must work in
sensitive areas?
xi.
Are protocols in place for segregating unprocessed products from processed
products? Is there a plan that addresses the deliberate mixing of processed and
unprocessed product (e.g., retort bypass)?
xii.
Are processing systems, including automatic control systems, secure? Are
individuals with access to control systems identified?
f). Warehousing and labeling
Are labels held in a secure area to prevent label theft and misuse?
Is there a plan in place to identify and contain mislabeled products?
Are warehouse employees trained to recognize suspicious activity? Do employees
report suspicious activity to management?
Are there documented procedures for handling damaged and/or returned products?
Is there a recall plan in place?
Are raw materials traceable into finished products? Is an inventory kept of product in
the warehouse (including location)?
g). Other
i.
If the firm has a laboratory that works with food pathogens, are there identified
procedures for control of pathogenic cultures?
ii.
In the event of a food security situation involving potentially infectious or toxic
substances, are specific procedures outlined to isolate the substances and protect
safety of personnel?
38

40. h). PERSONNEL
i.
Does the facility follow a prescribed procedure for obtaining applicants for
potential employment?
ii.
If an outside hiring source is used, are its recruitment methods known?
iii.
Is facility access restricted for applicants?
iv.
Are there specified procedures for screening employees working at this facility?
Are work references, addresses and phone numbers supplied by the employee on
the application form verified by management? Are there other protocols in place
such as drug testing, criminal background checks?
v.
Are uniform screening procedures applied to all personnel, including seasonal,
temporary or contract workers?
vi.
Are employees allowed to work prior to verification checks?
vii.
Is there a system for employee identification, such as photo IDs?
viii.
Does the new employee orientation program include emergency procedures for
dealing with various situations? (Evacuation routes, bomb threats, chemical spill,
etc?)
ix.
Does the orientation program include instructions for employees that may be
threatened, or that suspect wrong doing or product tampering by other employees?
x.
Are there specific clothing or protective gear requirements for personnel working in
the facility? Have handling procedures for clothing and protective gear been
considered, e.g., are smocks or other outer garments taken home by the employee?
xi.
Are utensils such as knives distributed and accounted for on a daily basis?
xii.
Does each department keep a roster of employees working on any given day?
xiii.
Are there methods in place, such as color-coded uniforms or coded badges, to make
it obvious when employees move to areas of the facility other than where they
normally work?
xiv.
Is there a specified procedure for entrance into the facility by employees reporting for
work?
xv.
Are there restrictions in place for employees exiting the facility during
normal hours of employment?
xvi.
Are there restrictions or other specified procedures with respect to employees entering
or exiting the facility outside normal hours of work?
xvii.
Are there procedures or restrictions on employee visitors?
39

41. xviii.
Are there rules prohibiting employees from bringing certain types of personal items
into the facility or into certain areas within the plant? Are there procedures in place
for enforcing these rules?
xix.
Are storage facilities provided for employees’ personal items? If lockers are
used for this purpose, are they secured with employee locks or are companyowned locks provided? Do company procedures permit access to these lockers?
xx.
Upon the termination of an employee, are procedures in place to immediately
restrict access to the facility by this individual?
xxi.
Is access to any company provided parking facility monitored? Is the area
segregated from production areas, storage, utilities, fuel tanks, etc. by adequate
security fencing or otherwise?
Are employees trained in the security policies and procedures of the company?
xxii.
i). EMERGENCY PROCEDURES
i.
Do company procedures for evacuation of the facility if necessary (bomb threat, fire,
tornado, flood, chemical spill, etc.) include provisions to prevent product tampering
during the evacuation process?
ii.
Have procedures been established with community emergency personnel to assure
proper access to the facility during an emergency while still preventing public
access?
iii.
Are there provisions in the programs to deal with onlookers or media representatives
that may be present during an emergency situation?
j). CONFIDENTIALITY
i.
Are there procedures to ensure that food security details are kept confidential?
40

42. REFERENCES
Jessop David & Morrison Alex (1994), Storage and supply of Materials 6th Edition, Pearson
Education Ltd. England.
Lysons Kenneth and Farrington Brian,( 2006), Purchasing and Supply Chain Management,
Pearson Education Ltd. England.
Republic of Kenya, Public Procurement and Disposal Act of 2005
Republic of Kenya, Public Procurement and Disposal Regulations of 2006
Rushton Alan, Croucher Phil & Baker Peter, (2009), The Handbook of Logistics and
Distribution Management, 3rd Edition, Kogan Page Limited,
Saleemi N.A. (2007), Store keeping and Stock Control Simplified, Saleemi Publications Ltd.,
Nairobi.
Saunders Malcolm, (1997), Strategic and Purchasing & Supply Chain Management 2nd
Edition, Pearson Education Ltd. England.
www.cips.org – Official website of The Chartered Institute of Purchasing and Supplies of
United Kingdom (UK)
www.kism.or.ke – Official website of the Kenya Institute of Supplies Management
http://www.finance.go.ke/ - Official website of The Ministry of Finance
http://www.planning.go.ke - Official website of The Ministry of Planning and Vision 2030
http://www.ppoa.go.ke - Official website of The Public Procurement Oversight Authority
en.wikipedia.org- Official website of Wikipedia - The free encyclopedia
41