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111 Town Square Pl, Jersey City, NJ 07310, U.S.
111 Town Square Pl, Jersey City, NJ 07310, U.S.

The management of inventory in order to meet the competitive requirements of the operation. Inventory can impact the five performance objectives: 1) Cost 2) Quality 3) Flexibility 4) Dependability 5) Speed
Inventory is stored at the warehouse and there are security guards that will patrol around the Kian Ann Building, including the warehouse. There will be a security guard at the warehouse to inspect the goods against the Pick Notes when goods are transferred out of the warehouse to the export area. However, there are locations in the warehouse allocated to Kian Chue Hwa to store their stocks. Furthermore, due to the different kinds of stocks that KCH and KAE hold, stocks of KCH and KAE will not be mistaken for one another.

Stock Count
Stock Counts are performed quarterly at March, June, September and December month end. management information system (MIS) Department will run the inventory system to select 600 items to count at every stock count. At least S$2 million worth of stocks will be counted at each stock count and average inventory of KCH is S$9 million. Stocks selected to be counted for this quarter will not be selected to count in the next quarter. The stock listing will be based on the previous day evening after all transactions have been concluded. There will be six teams doing the stock count. One team is made up of a counter and checker. The counter is from the Warehouse Department and the checker will be any personnel from the office. Upon completion of the stock take, the stock count sheet will be submitted to management. Subsequent to the stock count, stock count reconciliation list will be generated with the stock items with variances. Management will investigate the discrepancies with Warehouse Supervisor. Noted that after reconciling the variances, the stock quantity will be finalised and management will post the finalised stock count reconciliation quantity into the system and print out the stock count reconciliation list for filing purposes.
Noted from management that KCH does not perform 100% stock take as at Year End. 600 items will be selected from the system to count based on the item value.
The company produce the goods 2million items and every month replenish. They are controlling by Enterprise resource planning (ERP) system.
Delivery of Goods
The salesperson will send the (Pick Note/ Picking List) to the Warehouse Department via the sales system when goods are to be delivered to the customer. The Warehouse Department will be automatically notified when the Pick Note is released. The Warehouse Department will initiate the printing of Pick Note from the system and 3 copies of Pick Note will be printed out. The warehouse staff will indicate the items and quantity picked on the Pick Note and sign on it. After the Warehouse Department has picked the goods, the goods will be delivered to the outbound area together with the Pick Notes. The Pick Note will be signed by the warehouse security when the goods leave the warehouse. The goods will then be released to the outbound area and the Export Department will sign on the Pick Note to acknowledge the receipt of goods from the Warehouse Department.

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The original copy of Pick Note will be then be passed to the salesperson. The salesperson will update the items and quantity picked as indicated in the Pick Note into the system to generate the Delivery Order (DO). Individual salesperson will also need to update the Customer Shipment Checklist to track the date for Pick Note received from warehouse. The salesperson will then print 3 copies of DOs. After DO has been signed by salesperson, the DO will be handed to the export department to pack the goods. Salesperson will need to update the Customer Shipment Checklist to track the date of DO/Packing List (overseas sales) to the export department.

After the goods are delivered to the customer, customer’s acknowledged DO will be handed over to the Sales Department to issue invoice to the customer. Inventory is deducted from the system when invoice is raised after receiving the acknowledged DO.

Receipt of Goods
The Warehouse Department will acknowledge receipt of the goods on the Delivery Order (DO) when goods are delivered to the warehouse. The DO will then be passed to the Purchase Department who will generate and print out the Goods Received Note (GRN) based on approved Purchase Order (PO) and pass the GRN to another warehouse staff who will check the item description and quantities of goods received against the GRN. In the event that the quantity delivered is different from the PO, the Purchasing Department will raise a Goods Return form in the system and this will reduce the amount in the PO and GRN.

The Warehouse Department will reprint an updated GRN with the same GRN number. The Warehouse Department staff will sign on the GRN after inspection that goods are received in good order. The Warehouse Department will then pass the GRN to the Purchase Department who will transfer the GRN to inventory status in the system upon receipt of confirmation from Warehouse Department that goods are received in good order and condition. The Purchase Department will also monitor the receipt of original supplier’s invoices. The supplier’s invoices, DO, GRN and PO will then be forwarded from the Purchase Department to the Finance Department.

KCH’s policy in assessing allowance for slow-moving stocks is to identify stock items that are aged more than 4 years and requires more than 15 years’ time span for the stock to be completely sold. The 15 years future sales projection is based on the past 2 years sales trend extrapolated forward on a straight-line basis. All identified stock items, excluding those that are less than one year old, that are projected not to be sold beyond the next 15 years, will be fully written down.

General provision for stocks is provided every month based on stock aging report extracted by MIS Department. Every half-yearly, on September and March, KCH will reverse out the general stock provision provided up to date and make specific provision for the inventory. The specific provision will be made based on an inventory report generated by the (MIS) Department (IT Department). Noted that once a specific provision is made, it will not be reversed out unless the inventory is sold subsequently or written off.

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