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Certificate III

in
Retail
Learning and Assessment Material

SIRXINV002A
MAINTAIN AND ORDER STOCK

SIRXINV002A

Maintain and order stock

January 2008

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Contents
What Does Receival Involve? .4
What about stock integrity? .4
What documentation is involved with receiving stock? 5
Delivery Note .5
Invoice.5
Manifest .6
Consignment note 6
Internal packing note 6
Electronic data systems ..7
The receipts area ..7
Physical Checking.8
What do I do if deliveries are incorrect or damaged?..9
Do some goods need to be handled carefully?9
What types of goods does your warehouse receive? .9
Putting goods away 10
Supervising the despatch of stock ..10
How do you maintain stock levels?..10
Planning for periods of PEAK ACTIVITY 12
What are stock discrepancies? 12
How do you know there is a stock discrepancy? ..13
Types of record keeping discrepancies .13
The impact of discrepancies or variances on warehouse operations 14
How do you deal with discrepancies? .14
Workplace procedures for reporting major Discrepancies ..14
How do you adjust inventory records? 15
What is an inventory report? .15
Stocktaking .15
Physical Stocktakes ..16
One person Stocktakes 17
Two person stocktakes .17
Counting system 17
How do you organise a stocktake? .18

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Things to consider when planning or organising a stocktake..18


Communicating with purchasing and management about re-ordering .18
What documentation is required for re-ordering? .19
How do you handle receipt/despatch documentation? 19
Security of material in storage ..21
Security of Items Requiring Special Handling 22
Distribution of Receipt Documents and Material ..22
How are internal movements and records managed?..24
Supplier Performance Selection Criteria 25
Scoring System Evaluates Performance 25
Supplier Performance Linked to Bid Evaluation and Selection...26
TRAINING AND ASSESSMENT ACTIVITIES AND QUESTIONS 27
Assessment task 28
ASSESSMENT MODE A - Oral questioning .29
ASSESSMENT MODE B - Skills observation checklist ..30
Participant survey of materials .34
Suggested Answers35

SIRXINV002A

Hinson Institute of Training

Maintain and order stock

January 2008

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SIRXINV002A

MAINTAIN AND ORDER STOCK

Element of competency:
1. Monitor receipt and dispatch of goods
2. Maintain stock records
3. Coordinate stocktake or cyclical count
4. Identify stock losses
5. Process orders
6. Follow up orders

What Does Receival Involve?

Arrival

Unloading

Unpacking

Checking

Entry in System

Goods may arrive at the warehouse in many ways. They may arrive on trains,
aircraft or trucks, and they may be packed in containers, cartons or simply on
pallets. Road trucks are the most common form of transport for the distribution
of goods. Some road trucks are enclosed containers and are loaded/unloaded
from the rear. Other types are loaded/unloaded from the side.

What about stock integrity?


At receival it is important to make sure the quality and quantity of goods is
what is expected. Goods must be received properly and put away in the
correct place. If you dont get it right here the whole supply chain is incorrect.
It is also very important that the integrity of stock is also protected.
The warehouse where you work is a critical link of goods exchange. Goods
exchange involves many different groups:

Suppliers

Purchasers

Carriers

Distribution Centres

All these groups work together in a system to guarantee the customer gets
what they want, when they want it and at the right cost. Receival at a
warehouse must ensure that goods flow through the warehouse as smoothly
as possible, not making mistakes and not causing delays.
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What documentation is involved with receiving stock?


To make sure the flow of goods through a warehouse is smooth and effective,
we need a method of recording and tracking goods between all groups
involved in the exchange process. We need a way to show that suppliers,
purchasers, carriers and distribution centres have all played their part
correctly. This is necessary to show exactly what goods have been given to
who, and as evidence of work and receipt of goods on which payments will be
based. Individual warehouses will have different systems for recording the
movement and storage of goods. These systems can be manual or
computerised. Making sure the system works involves many different types of
documentation.

Delivery Note
A delivery note is usually supplied with the goods at the time of delivery. It will
state what the supplier has actually delivered to the store. This is probably the
most important receipt document of all. Goods delivered are checked against
the delivery note to confirm the delivery is correct.

Invoice
Invoices are used for the same purpose as the delivery document. However,
invoices are used in situations where the distribution centre actually
purchases the goods rather than just distributing them for somebody else.
Goods received are checked against the amount and description stated on
the invoice. The invoice may contain:

A single item or

Many items.

Invoices are normally:

Sent with the load of goods.

Invoices are a very important document as they are

Used to bill the receiving company.

Great care must be taken to make sure that goods received are accurately
checked against the invoice.

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Manifest
Some warehouses are Care Takers of goods, (that is they do not actually
purchase the goods). These warehouses receive goods using a document
called a manifest. The manifest is similar to an invoice. They are used mostly
when importing or exporting goods. The information on a manifest is used to
check the delivery and make sure all the goods consigned have arrived. A
Delivery Note, Invoice or Manifest are used at different times to check that the
goods delivered are the right goods and the right quantity.

Consignment note
A consignment note is used when the delivery is contracted out to a private
carrier. They show what is to be receipted and are usually issued by the
carrier of the delivery, as a record of what has actually been sent.
In some cases, the goods on a consignment note may be checked with other
delivery documents (invoice, manifest etc). A consignment note usually does
not give a product description, but will give information like how many boxes,
pallets, bags, bales etc. The important sections are:

Pallet control information.

Number of items.

Description.

Receiver.

Signature of receiver.

If you are not sure why the points listed above are important to receiving
goods, please discuss consignment notes with your supervisor.

Internal packing note


The internal packing note is used to carry out a more detailed check of the
stock delivered, once the outer containers, such as cartons, drums, boxes and
pallets have been broken down and the stock is ready for inspection and then
storage. The packing note lists what is actually within each unit delivered. It
should give specific information regarding quantity, type, size, specifications,
colours etc.

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Electronic data systems


Many warehouses today use special computer systems in the receival of
goods. This is called an automated system. Automated systems cut down on
paper work and are very quick when it comes to checking and transfer
information. The main parts of an automated system are:

Consignment notes sent through a computer as proof of delivery.


Barcodes used on consignment notes.
Bar-coded delivery labels.
Speedy pricing.

Sometimes with automated receival systems, computers can be used to


provide extra information. Daily dispatch details can be looked at for numbers
of:

Deliveries

Amounts

Weights

Money charged

The receipts area


The receipts area is a special area within the warehouse for the receival of
goods. It is a separate area away from all existing stock. Sometimes this area
is called the quality control area or QC. This is because all incoming
deliveries must be carefully checked before the goods are mixed with stock on
hand.
The receival area is usually located close to loading and unloading docks.
This helps to save handling time and allows forklifts, trolleys etc, to be used.
The receival area should be large enough to allow goods to be carefully
checked.
When doing a first check, look for pallets with product overhang or wet and
damaged stock. Some warehouses only accept single item pallets. If this is
the case in the warehouse where you work, pallets with mixed items will also
need to be labelled Return. If mixed pallets are accepted, then they should be
referred to the receival supervisor.
It is also important to check any security or quality control devices. In many
warehouses, loads or containers that are delivered must be sealed. This may
be done using some type of plastic tag or even a key and lock system. These
load security procedures are used to prevent consignments from being
tampered with during transportation.

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When checking a load, if you notice that the seal or lock is broken, you should
immediately notify your work supervisor. Usually the carrier is asked to verify
the damaged seal and the sender or client is notified before the stock is
checked. In some situations it may be warehouse policy to actually collect
photographic evidence of damaged deliveries.

Physical Checking
After goods are unloaded, physical checking is carried out to make sure the
goods delivered are what is described on:

Manifests

Consignment notes

Invoices.

Deliveries are checked against delivery documentation to make sure:

The total count is correct.

Individual product count is correct

Any damage is recorded and reported immediately

Goods may be checked by:

Counting

Weighing

Measuring.

Quality may be checked by:

Colour

Size/Weight

Specification

Packaging.

Best by dates.

Once the goods have been checked, they are entered into the system and
recorded as goods in stock.

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What do I do if deliveries are incorrect or damaged?


A damage or shortage report must be completed when:

Goods arrive damaged

A shortage occurs in delivery

Goods fail to arrive at the stipulated time.

There are also correct procedures for cases of wrong and surplus
delivery.

Do some goods need to be handled carefully?


Sometimes cartons come with special signs or instructions on how they
should be handled. Care must be taken because these instructions relate to
the goods inside the cartons. Failure to follow carton instructions may result in
damage to the goods. (In the case of dangerous goods, workers may be
injured if these instructions are not followed).
Shrink/stretch film wrapping is commonly used to secure loads. It may be
used at times when the load will not tolerate tight or heavy strapping, or when
loads include unusual shapes. Shrink-wrap can also be used for pallets that
contain a lot of small items. It may not be suitable for loads that are heavy, or
those, which require heavy holding power.
Clear and black wrap is available. Black to conceal the contents from the
public eye. E.g. TV sets.
In some circumstances you may be required to remove the shrink-wrap before
the goods are put away. However this is unlikely in cases where loads are
unstable.

What types of goods does your warehouse receive?


As mentioned previously, loads may be delivered as single items or as
multiple product delivery.
The source of the goods may also differ. Goods may come from a local, or an
Australian source, or may even be imported from overseas. Goods that are
sourced from different places may require different receival procedure. Also,
certain types of goods may require special delivery procedure. Chemicals,
petroleum products, unusual sizes and shapes, are some examples where
special arrangements for receival would be made. Some products by their
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nature may require special and expert handling to reduce risk of accident or
damage.

Putting goods away


Once the goods have been checked and accepted as scheduled, they are
formally entered onto the stock on hand record system. This system is used
to produce a Put away label. Manual labels can also be used to trap the
inventory but do not produce a put away label.
Not all computer systems can provide information such as locations of goods.
If your warehouse does not use locations for slotting of goods, ask your
supervisor to explain how do you know where products are?
Of the many different lines in a warehouse, some will move through the
system quicker than others. Generally, goods are classified as fast moving,
medium moving, slow moving. What and how many people buy in the
supermarkets and shops will determine how fast any goods move through the
warehouse system. Most times it is necessary to keep a reserve supply of fast
moving goods. Reserve items are usually stored in a distinct location and are
often called piggy backs, which means that many pallets are stacked one on
top of each other. Reserve items are stored on the high slots on most
occasions.

Supervising the despatch of stock


A supervisor in a Despatch Section is always on the alert for problems that
might slow down the flow of stock. Good supervisors need problem solving
skills to deal with day-to-day problems, but they also have a responsibility to
look for long-term ways to improve their section's performance.

How do you maintain stock levels?


Stock levels need to be maintained so that you can fill orders with a turn
around time that satisfies customers.
On the other hand, you do not want to hold excess stock unnecessarily. Some
of the disadvantages of holding excess stock are:

Having money tied up in inventory

Operating expenses, rent, rates, repairs, heating, cooling, lighting, etc

Valuable space taken up by extra storage

Chance of stock becoming obsolete or expiring

Deterioration of stock

Insurance cost of stock

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Stock checking

Recording of stock.

However, there are also some advantages to holding large quantities of stock:

You may receive discounts from suppliers for ordering large quantities

You have a buffer for when delivery cannot be exactly matched with
daily usage

You reduce the risk of being unable to fill orders if there is a breakdown
or interruption to supply

You can cash in on fluctuations in the price of the commodity it can


be an advantage to have a large quantity of stock if the price is about
to rise

Some items appreciate in value during their time in storage, (for


example wines and spirits).

As you can see, it is difficult to run a warehouse on a very tight basis and still
take into account all of these needs. As the warehouse supervisor you will
sometimes have to make decisions about required stock levels.
When deciding what level of which stock lines should be kept, you will need to
balance the advantages of holding large quantities of stock against the
disadvantages.
The level at which you decide stock needs to be replenished will depend on a
number of factors. Besides the advantages and disadvantages discussed
previously, you will also need to consider:

Minimum re-order quantities or standard units of issue (pallet load,


items per box, etc)

History of demand for a product

Legislative demand to hold stock (e.g. spare parts) even if there is little
or no customer demand for the product

Seasonal demand for a product

Frequency of delivery or availability of supplies, especially from


overseas (fluctuations in the money market)

Taking care not to carry too much stock in high value items

Taking care not to carry too much stock in items that might become
obsolete (computer chips or some machine parts) or if the item has an
expiry date.

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Many companies have a computer system built into their stock control that is
activated when stock needs to be purchased. This can be done on a weekly
or monthly basis, or at any time that suits the organisation.
Other companies have a system that will requisition stock on a day-to-day
basis and again this will automatically raise the orders for the purchases.

Planning for periods of PEAK ACTIVITY


However busy a warehouse or distribution centre normally is, most have
periods when the demand for goods climbs to a peak. For a grocery
distribution centre the peak periods often occur before Easter and Christmas.
Public holidays can also mean a higher workload for warehouse staff because
they must fit five days work into four.
It is the supervisors responsibility to make sure that the warehouse continues
to carry out its work efficiently during peak periods. Luckily, in many
warehouses the peaks are predictable.

What are stock discrepancies?


A discrepancy occurs when there is either more or less stock than the amount
recorded. This might be because there is an incorrect quantity of stock or
because the records are incorrect.
When there is more stock than recorded there is a stock surplus. When there
is less stock than recorded there is a stock deficiency. Deficiencies are often
referred to as shrinkage. Discrepancies can be caused by:

Data entry errors

Under or over supply

Pick errors

Theft

Waste by:
Damage
Incorrect storage
Contamination
Expired use-by dates

Buyers errors

Coding errors

Changes in the number of items in a pack. For example from packs of


12 to packs of 10

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Stock returned from customers for replacement

Incorrect checking

Work in progress

Incorrect allocations.

How do you know there is a stock discrepancy?


One way to identify stock discrepancies is to compare stocktake results with
inventory. Sometimes you do not need to wait for a stocktake to identify
discrepancies. For example, shrinkage due to damage can be recorded as
soon as the damage occurs by filling out a form or immediately updating the
inventory.
Companies involved in quality assurance systems must record all damage
and disposal details on a nonconformance report.
No inventory control system is perfect and some discrepancies between
physical quantities and inventory records can be expected. Where this
happens, the inventory records should be altered to show actual physical
quantities.
However, it is a good idea to re-check the count first before altering records.
Major discrepancies or a high incidence of minor discrepancies could be an
indication of breakdown in control and should be investigated.
Many businesses take careful steps to guard against theft, but inventory
shortages can arise for a variety of other reasons. Frequently, shortages are
because of inadequate receiving, despatch-in, and issuing procedures and
controls.

Types of record keeping discrepancies


Record keeping discrepancies might include:

Inaccurate data entries

Keyboard mistakes

Human error

Inaccurate documentation:
Receiving or packaging slips
Despatch documents.

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The impact of discrepancies or variances on


warehouse operations
Discrepancies or variances can cause:

A need for more stock takes or cyclical counts

Inaccurate records for:


Pick slips
Inventory lists
Customer inquiries about stock availability
Re-ordering procedures.

How do you deal with discrepancies?


If the discrepancy is large, it is worth investigating:

Examine stock cards, computer records and figures to check for


calculation errors
Verify the correct quantity of the discrepancy
Check basic documents such as receipts, issues, transfers, delivery
documents, return to store notes, etc
Examine previous stocktake results to see if there were any
discrepancies
Make inquiries into other departments in case there has been an issue
or return to the warehouse without documentation, outside normal
working hours.

Workplace procedures for reporting major


Discrepancies
Your workplace will have its own procedures for reporting major
discrepancies. Some of the things you will need to ask yourself when
reporting major discrepancies are:

Should the report be made verbally or in writing?

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What documentation should be used? For example damage reports,


stock adjustments, stock transfer, quarantine reports etc.
What personnel or departments should receive the report?

How do you adjust inventory records?


You may find that after the stocktake your inventory records do not match the
amount of stock that is held. If so you will have to adjust your records. You can
do this by:

Manually adjusting it on the cards


Producing an audit report
Reviewing all journal adjustments
Adjusting the amounts on the computer.

Stock can also be reviewed on a monthly basis and the marketing department
will write down the value of the stock, for example clothing garments that
might have gone out of fashion. The stock will then be sold at a sale price.
Other stock can be looked at during the year, and written down and off-loaded
at sales. These will all cause the inventory report to be adjusted.

What is an inventory report?


An inventory report tells you what stock is available and what stock is
required. This can be achieved in different ways:

With an on-line computer display


By numbers on bin cards
By running a range of reports on the computer.

Stocktaking
Stocktaking is the process of physically checking the quantities and condition
of goods held in the warehouse.
There are two main types of Stocktakes:

Ongoing
Periodic (monthly, quarterly, annual).

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Periodic
Periodic stocktaking involves counting all of your stock at the end of a given
period, usually the end of the financial year.
When doing an annual stocktake, the warehouse might need to be closed for
a certain period of time so that all stock can be checked. If this happens, the
production department will have to be informed well in advance so that they
can stock up on supplies before the stocktake.

Ongoing
Nowadays, with all the computer systems operating in warehouses, a
stocktake can be carried out at any time with little interruption to productivity.
Some companies do a monthly stocktake, using their computer to show the
amount of stock that should be held, while the warehouse staff physically
checks the stock against the computers figures. They may even decide to do
a weekly stocktake on high turnover items. Other companies do twice yearly
Stocktakes that are done manually, using the computer to assist the count
while warehouse personnel physically count each item on the stocktake. The
physical count can be checked against the figures on the computer system.

Physical Stocktakes
Periodically, it is important to physically check inventory for three reasons:

To determine whether inventory records are accurate

To confirm physical quantities so they can be valued for financial


accounting purposes

To determine if effective control is being maintained.

Stocktaking can be a laborious and time consuming activity, but it can be


made more efficient if you:

Count items of highest value and importance approximately every three


months, and items of low value and importance about every six months

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Count high value and important inventory items by units, and low value
inventory in bulk by containers or weight

Count inventory when it has reached re-order levels as quantities will


be low and less counting will be required

Use experienced and responsible staff on high value and important


items and less experienced staff on other items.

When doing a physical stocktake, your method of counting will depend on the
number of workers you have available.

One person Stocktakes


One person counts the goods by description and quantity from start to finish
by:

Using a blank piece of paper to record all details

Double-checking the figures by repeating the stocktake in reverse order


without using the first stocktake figures as a guide

Comparing the figures on both sheets and double checking any


differences

Comparing findings with the computer or paper based records

Recording any adjustments or transfers.

Two person stocktakes


This method is the same as above except one person counts while the other
writes. When counting the second time, you should swap roles so that the
writer is now counting and the counter is now writing. Compare this count with
the previous count and double check any differences.

Counting system
The computer system will be used to show the quantity of stock that should be
held. However, this should only be used as a guide because all stock will have
to be checked physically with stock cards for all items.
In some warehouses the stock is stored so that it can be counted with ease
in packs of a set quantity, in boxes with set numbers in it, or on pallets of set
amounts.
Real time information from computers is critical for accurate stocktaking and
reporting.
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How do you organise a stocktake?


Organising a stocktake is important not only to your warehouse and its staff,
but also to your customers. Customers need to be notified well in advance if
there is going to be a disruption to supply.
As discussed earlier, the type of stocktake you do depends on the policy of
your company and the resources available. Company policy will dictate
whether you have an annual stocktake where the warehouse shuts down for a
period of time, or ongoing cyclic stocktakes, with less interruptions but a little
less accuracy.

Things to consider when planning or organising a


stocktake
When planning a stocktake you need to:

Have sufficient resources to conduct the stocktake

Draw up a stocktake program and get everyone, including the finance


department and auditors, to agree to it

Prepare stocktaking sheets, cards or other documents in advance

Instruct everyone involved about his or her duties

Inform customers so that they can stock up during the stocktake time.

Communicating with purchasing and management


about re-ordering

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The amount of capital tied up in inventory will always have to be carefully


balanced. As the warehouse supervisor you should work very closely with the
purchasing department at all times.
Company policy will dictate the amount of inventory that should be held to
maintain supply to the customer while not overstocking.
Purchasing will be working with senior management to decide on the amount
of stock needed to keep the customers supplied. During abnormal times you
will have to provide purchasing with up to date figures on the quantity of stock
held and whether more stock needs to be brought in. The importance of your
accuracy in running the warehouse is crucial.

What documentation is required for re-ordering?


It is the warehouse supervisors job to regularly check the quantity of stock
held and to assist the purchasing department with re-ordering. The warehouse
supervisor will have to raise a requisition which will show what stock is
required, and its colour, size quantity and so on.
The requisition will then go to the warehouse manager who will check that
everything is correct, and forward it on to the purchasing department. The
purchasing department will ask the supplier if the stock is available and when
it can be delivered. When all of these issues are settled, they will then raise a
purchase order and number before sending it off to the supplier. Other
companies may have a different re-ordering system from the one mentioned
above.

How do you handle receipt/despatch documentation?


Many documents are used in the receival of goods. The main ones are:

Re-order notification

Purchase order stores copy

Advice note

Delivery note

Consignment note

Internal packing note.

Re-order notification
The re-order notification is usually issued by the stock record section, and a
copy is sent to the purchasing department who will place an order with the
supplier. The stores department will now know that a delivery will take place.

Purchase order stores copy


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The purchasing department is responsible for issuing stores orders and


seeing that a copy comes to the stores department or warehouse. The
purchase order stores copy is usually a carbon copy of the order placed on
the supplier. This copy is kept on file in the store and is used when deliveries
have to be checked.

Advice note
The advice note is issued by the supplier of the goods ordered by the
purchasing department. It is usually issued when goods are dispatched by the
supplier and will show:

That the order will be delivered

When the delivery is to be made

How it will be delivered.

Delivery note
The delivery note usually comes with the goods when they are delivered. It
usually tells what the supplier has actually delivered to the store. The delivery
note is probably the most important receipt document of all, and it is the store
manager who must see that he or she, or someone he or she delegates,
checks goods against the list on the delivery note.

Consignment note
The consignment note is issued by the carrier of the delivery. The
consignment note is written out when the delivery is contracted out to a third
party for delivery, for example rail, post or a carrying company.

Internal packing note


An internal packing note is used when you carry out a more detailed check of
the stock delivered. You make this check after you remove the goods from
their outer containers such as cartons, drums or boxes, or you unload them
from pallets.
The internal packing note lists what is actually within each unit delivered. It
should give specific information about:

Quantity

Types

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Sizes

Specifications

Colours

Other identifying features.

Security of material in storage


As a general procedure, material in storage must be kept under lock and key
when practicable. Protecting material in storage and preventing internal
pilferage are two of the functions of a storage operation. Preventing loss of
material can save dollars and time.
If not properly secured, material losses in such proportions could jeopardize
the profitability of the business.

Control Measures
Specific measures for preventing pilferage may vary in different activities. The
most practical and effective method used for controlling pilferage is the
establishment of physical security and psychological deterrents. These can be
accomplished in a number of ways as described in the following:

An aggressive security program is an effective means of convincing


personnel that they have much more to lose than they do to gain by
engaging in theft.

The supervisor must set the proper example and maintain a desirable
moral climate for all storage personnel.

Let storage personnel know that it is their responsibility to report any


loss to proper authority.

Institute adequate inventory and control for accounting material in


storage.

Establish and monitor lock and key control procedures.

Perform an investigation about suspected losses quickly and efficiently.

Establish a material control system to include inspection of delivery and


vendor vehicles.

Establish accurate methods of taking physical inventories and


accounting of material procurement, usage, and salvage.

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Security of Items Requiring Special Handling


Classified items should be kept separate from other material. The most
satisfactory method is to store these items in a separate building with a higher
degree of physical protection. Where a separate building is not available, a
room, cage, or crib may be constructed within a storage building. Spaces
containing classified material must be secured by means of an approved
locking system.
Pilferable and sensitive items should be stored in a secured area to prevent
theft. The storage area could be a vault, cage, or fenced and locked security
space. Normally these items will not be stored with classified material.
However, when instances require these items to be stored with classified
material, the storage area will be classified. In this case, the control applied to
these items is equivalent to the highest security classification of any item in
storage.
In some cases, pilferable items may require storage in general-purpose
spaces. For example, items were received in large banded containers for
which secure storage space is not available. In this case, storage in a
general-purpose space is permitted. However, when containers are opened to
make issues, the residual quantities should be transferred to the specified
secured area.

Distribution of Receipt Documents and Material


The movement of stock receipts direct from the receiving area to the storage
area depends upon the knowledge of the established storage positioning plan
for the material concerned. Some activities position stocks by group and
class, others by symbol and by group and/or class within the symbol.

Reporting Discrepancies
The categories of material receipt discrepancies may be caused by shipping,
transportation, packaging, or material quality deficiency. Discrepancies such
as overages, shortages, damages, incorrect, or non-receipt of material are
attributable to the shipping activity or transportation system.

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SHIPPING AND PACKAGING DISCREPANCY.- Shipping discrepancies and


packaging discrepancies that are attributable to the shipper need to be
reported.

Purpose of Report of Discrepancy. - The ROD is used to support the


adjustments of inventory and financial records. Shipping-type discrepancies
are variations in the quantity or condition of goods as shown on the shipping
document. These discrepancies include the following:

Excess or insufficient quantity, because of an incorrect count

Damage caused before shipment

Incorrect item pulled from the warehouse and shipped

Item is not identifiable because the proper paperwork is missing

The packaging discrepancies include the following:

Improper packing

Improper marking

Improper unitization

Improper preservation

NOTE: The ROD should not be submitted for discrepancies caused by the
requisitioner. In this case, the material must be turned in under the Material
Returns Program and the correct item reordered.
File Requirements. - Retain closed ROD case files for a period of 1 year after
receipt of reply from the action activity. Maintain a separate case file by fiscal
year. Maintain an outstanding ROD file for monitoring purposes.
Control System. - Maintains a control system for monitoring RODS. This may
be accomplished using either the manual or mechanized method. At a
minimum, the record should include the following information:

Report number assigned to the ROD

Date of submission

Action activity

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Requisition or contract number

Extended money value

Discrepancy cited

Action requested

Date reply received

Reply

Follow-up date

Follow-up or Cancellation. - Action activities are required to reply within 45


days after receipt of ROD. Follow-ups should be numbered as first follow-up,
second follow-up, and so on. The first follow-up should be submitted to the
action activity 60 days after submission of the original ROD. Submit
subsequent follow-ups at 30 day intervals.
Cancellation of ROD by the submitting activity requires a copy of the ROD,
marked "CANCELED," to be forwarded to the action activity. The ROD copy
must be annotated with clarifying data in the remarks block and signature and
the date the person submitted the cancellation.

How are internal movements and records managed?


The receiving area provides the greatest opportunity for error, pilferage and
theft. Set routines are used to help deal with these problems.
The following is an example of a set routine for receiving material into a
warehouse:

Set time slot for receiving goods (avoid receiving unannounced goods,
if possible)

Allocate the arriving vehicle to an unloading point

Brace the trailer before unloading for safety and security

Check load seals record their numbers and note any that have been
tampered with

Unload

Check numbers carefully while unloading

See that numbers tally with the shippers notes (sometimes you will also
have to tally against purchase orders, delivery notes or advance
notices)

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Record discrepancies note if numbers are over or under and tell if,
and how many, goods are damaged

Photograph anything that looks suspicious

Carry out appropriate quality control checks

Assign stock to appropriate place or places.

Above all it is essential that you always count twice before signing once.
This example might be used with either a manual or a semi-automated
receival system.

Supplier Performance Selection Criteria


As an example, Winnipeg Division determines best value by evaluating
suppliers on the following performance criteria each month:

On time delivery

AOG (Aircraft on ground/spares) on time delivery (Purchased Detail


Suppliers Only)

SOSs (Shop out of Stock)

Quality

Cost

Supplier Change Requests (Purchased Detail Suppliers Only)

Customer Service (includes response time to buyer requests and


corrective action as well as packaging and shipping requirements)

Scoring System Evaluates Performance


Supplier performance is not only critical as Winnipeg Division strives to meet
and exceed our customers' needs, it affects their bottom line. Each month, in
an ongoing effort to work together with suppliers to gain overall best value,
Winnipeg Division Procurement Agents discuss and review supplier
performance data in each category to determine supplier ratings. Suppliers
earn points based on their performance. As in golf, suppliers strive to achieve
the lowest score possible; the lower the score, the better their performance.
Suppliers can achieve gold, silver, bronze or "other" status, depending upon
points earned during the last 12-month period.

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Supplier Performance Linked to Bid Evaluation and


Selection
As Winnipeg Division strives to strengthen partnerships with suppliers,
supplier performance will be used to evaluate and select successful bidders,
effective January 1st, 2003. Under the program, existing suppliers may have
as much as 9% added to any new bid they submit, depending upon their
performance over the previous 12-month period.
NOTE: For first-time bidders and suppliers under contract to Winnipeg
Division where 12 full months of performance data is not available, supplier
performance will be based on other external measurements including
affordability.
Suppliers achieve an annual performance rating of Gold, Silver, Bronze or
"Other" based on the number of points earned in the previous 12 months. The
points, status categories and bid penalties are shown in the table below.
The percentages added to each bid represent an estimate of additional
administrative costs Winnipeg Division incurs to determine, administer and
monitor supplier corrective action. Performance rating encourages suppliers
to work together with Winnipeg Division to achieve overall best value for the
Boeing Company.

Status
Category

Points Earned

Percent Added to
Bid

Gold

84-87 Points in a 12
month period

0%

Silver

88-91 Points in a 12
month period

3%

Bronze

92-95 Points in a 12
month period

6%

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96+ Points in a 12 month


period

Other

9%

Here's a fictitious example of how performance rating can affect a supplier's


bid:

Supplier
Name

Quote

Current
Rating

Percent
Added

Lowest Best
Value

Supplier A

$317,000 Gold

0%

$317,000

Supplier B

$317,000 Silver

3%

$326,510

Supplier C

$317,000 Bronze

6%

$336,020

Supplier D

$317,000 Other

9%

$345,530

Although supplier performance rating is not the only factor used to evaluate
and select bidders, it can dramatically affect a supplier's competitiveness

SIRXINV002A

MAINTAIN AND ORDER STOCK

TRAINING AND ASSESSMENT ACTIVITIES AND QUESTIONS


The Trainee will be required to demonstrate competence on the job, in
practical demonstration; observation, question/answer and role-play
situations, incorporating verbal questions and written work, including
completing workplace forms, either to the RTO Trainer or Supervisor, under
the guidance of the RTO Trainer.
Element of competency:
1. Monitor receipt and dispatch of goods
2. Maintain stock records
3. Coordinate stocktake or cyclical count
4. Identify stock losses
5. Process orders
6. Follow up orders
1.

What does receival involve?

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2. Why do stock levels need to be maintained?

3.

What do you need to consider when planning a stocktake?

4.

Why are set routines important when receiving goods?

Assessment task
Provide your workplace assessor with a written report that identifies how you
are able to:

Monitor receipt and dispatch of goods

Maintain stock records

Coordinate stocktake or cyclical count

Identify stock losses

Process orders

Follow up orders

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Provide samples and examples where appropriate.

ASSESSMENT MODE A - Oral questioning


Trainee name:
Name of Workplace:
RTO Trainer name:
Unit/s of competency:

SIRXINV002A

Unit Name:

MAINTAIN AND ORDER STOCK

Date of training/
assessment visit:

Instructions: In addition to written answers provided above, the trainee is required to


provide verbal answers to the following questions that will be asked by the RTO Trainer.
Read the questions prior to the Trainers visit, and be prepared to answer them, obtaining
help where necessary.
Did the trainee satisfactorily answer the following questions:

Yes

No

1. What does receival involve?

2. Why do stock levels need to be maintained?

3. What do you need to consider when planning a stocktake?

4. Why are set routines important when receiving goods?

5. How do you identify losses?

6. How do you maintain stock re-order cycles?

The trainees underpinning knowledge was:


Satisfactory

Not Satisfactory

Notes/comments :
Question 1:
Question 2:
Question 3:
Question 4:
Question 5:
Question 6:
RTO Trainer signature:
Trainee signature:
Date of assessment:
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ASSESSMENT MODE B - Skills observation checklist


Trainee name:
Name of workplace:
RTO Trainer name:
Unit/s of competency:

SIRXINV002A

Unit Name:

MAINTAIN AND ORDER STOCK

Date of training/
assessment visit:

During the demonstration of skills, did the trainee:

Yes

No

N/A

Responsibility for receipt and dispatch of goods delegated to


appropriate staff.

Store procedures implemented in regard to receipt, dispatch and secure


storage of goods.

Staff functions observed to ensure store procedures are followed and


documentation is completed correctly.

Store procedures implemented to ensure goods inspected for quantity


and quality on receipt.

Variations to quantity and quality of delivered goods acted upon


according to store policy.

Safe handling and storage of goods supervised in line with store policy.

Stock levels monitored and maintained at required levels.

Stock reorder cycles maintained, monitored and adjusted as required.

Team members informed of their individual responsibilities in regard to


recording of stock.

Stock storage and movement records maintained in line with store


policy.

Stock discrepancies recorded and procedures followed according to


store policy.

Stock performance monitored and fast/slow selling items identified and


reported according to store policy.

Policies and procedures in regard to stocktaking and cyclical counts


interpreted and explained to team members.

Staff rostered according to allocated budget and time constraints.

Stocktaking tasks allocated to individual team members.

Team members provided with clear directions for the performance of


each task.

Team members allocated to ensure effective use of staff resources to


complete task.

Accurate reports on stocktake data, including discrepancies produced


for management.

Losses accurately identified, recorded and assessed against potential


loss forecast on a regular basis.

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Avoidable losses identified and reasons established.

Possible solutions recommended and implemented.

Orders for stock processed/raised as requested according to store


policies and procedures.

Ordering and recording system accurately maintained.

Availability of sample range ensured according to buying plan.

Pricing materials ordered as required.

Negotiated purchase and supply agreements recorded accurately and


filed for retrieval.

Delivery process monitored to meet agreed deadlines.

Routine supply problems handled or referred to management as


required by store policy.

Continuous liaison with buyers, store/departments, warehouse and


suppliers to ensure continuity of supply.

Stock distributed according to store/department allocation.

The trainees performance was:

Not Satisfactory

Satisfactory

Feedback to trainee:
-----------------------------------------------------------------------

-----------------------------------------------------------------------

-----------------------------------------------------------------------

Trainee signature:

RTO Trainer signature:

I confirm competence for this unit SIRXINV002A

_________________
(Manager signature)
_________________
(Date)

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COMPETENCY RECORD - SIRXINV002A

Assessor Comments

Assessment Strategies

After assessment the assessor, the supervisor and participant should sign the competency record. If competency is not achieved at the first attempt, strategies to
address the performance gaps need to be identified and a time for re-assessment organized.
C U R R E N T

C O M P E T E N C I E S

Oral/written questions

_____________________________________________

Activities

_____________________________________________

Workplace project

_____________________________________________

Supervisor/3rd party report


Self-Assessment

_____________________________________________

Other

_____________________________________________
_____________________________________________

The evidence supplied is:


Valid

Sufficient

Authentic

Current

The participant is competent has shown competence in all of the following


elements:

Monitor receipt and dispatch of goods


Maintain stock records
Coordinate stocktake or cyclical count
Identify stock losses
Process orders
Follow up orders

Trainee Signature:
Supervisor Signature:
Trainer Signature

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

D A T E _ _ _ _ _ _ _ _ _

NOT YET COMPETENT:

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

D A T E _ _ _ _ _ _ _ _ _

Strategies to address gaps in


trainee performance:

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

D A T E _ _ _ _ _ _ _ _ _

The Trainee is

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R E A S S E S S M E N T :

_ _ _ _ _ _ _ _ _ _ _

Off-the-Job Training Log


Trainee Name: ____________________________________

Supervisor signature: _________________________________

Company: __________________________________________________________________
Certificate:

II

III

IV

Date: ______/______/200____

in

Business (Office Admin/Admin)

Civil Construction

Extractive Industries

Food Processing

Hospitality

Process Manufacturing

Retail Operations

TDT (Road Transport)

TDT (Warehousing)

Telecommunications (Call Centres)

_________________

List below the times allocated to Off-the-Job training for:

Date

Activity
code

Duration

Date

Activity
code

Duration

SIRXINV002A Maintain and order stock

Date

Activity
code

Duration

Date

Activity
code

Duration

Activity Code
1.
3.
5.
7.

Read self-paced guides


Met with Workplace Coach
Discussion on phone
Researched store policy and procedures
9. Researched workplace policies and procedures
11. Observed other staff member/s maintaining and ordering stock
13. Other research
15. Staff training
17. Complete appropriate paperwork relevant to task

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2. Developed knowledge of use and safety requirements


4. Worked on assessment tasks
6. Discussed assessment tasks
8. Researched legislative requirements
10. Researched industry codes of practice
12. Performance appraisal
14. Read relevant industry publications
16. Talking to the supervisor
18. Other: (specify) __________________________________________

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Participant survey of materials


Unit code: SIRXINV002A

Unit name: Maintain and order stock

Date..
Instructions:
Please complete the questionnaire by circling the one number that best describes your answer to each
question. Please read each question carefully. For mailed surveys, place the completed questionnaire in
the enclosed reply paid envelope and post it back within seven days

Q1.

Thinking in general about the material you were given for this unit, how would you
rate it overall?

Circle only one answer


Poor .... 1
Fair .. 2
Good ... 3
Very Good .. 4
Excellent ..... 5
Dont know ........ 6
Q2.
How strongly do you agree or disagree with the following statements about the unit
material?

Neither Agree nor


Disagree

Agree

Strongly Agree

Dont know / NA

1
1
1
1
1
1
1
1
1
1

Disagree

a. The layout of the reading material made it easy to use/read


b. The layout of the assessment material made it easy to use/read
c. The font size of the material was large enough
d. The reading material assisted me to complete the assessment
e. The material was easy to understand
f. The graphics/pictures were useful
g. The graphics/pictures were sufficient in number
h. The graphics/pictures were legible
i. The materials was free from typing errors
j. The material was relevant to my job/workplace

Strongly Disagree

Circle one answer only for each statement

2
2
2
2
2
2
2
2
2
2

3
3
3
3
3
3
3
3
3
3

4
4
4
4
4
4
4
4
4
4

5
5
5
5
5
5
5
5
5
5

6
6
6
6
6
6
6
6
6
6

Comments: Please expand on the above points if you rated any of them less than 3

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______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

Suggested Answers
SIRXINV002A

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1. What does receival involve?

Arrival

Unloading

Unpacking

Checking

Entry in System

2. Why do stock levels need to be maintained?


Stock levels need to be maintained so that you can fill orders with a turn around time that
satisfies customers.
3. What do you need to consider when planning a stocktake?
When planning a stocktake you need to:

Have sufficient resources to conduct the stocktake

Draw up a stocktake program and get everyone, including the finance department
and auditors, to agree to it

Prepare stocktaking sheets, cards or other documents in advance

Instruct everyone involved about his or her duties

Inform customers so that they can stock up during the stocktake time.

4. Why are set routines important when receiving goods?


The receiving area provides the greatest opportunity for error, pilferage and theft. Set
routines are used to help deal with these problems.

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