System Flow
Stores department sends purchase requisition note or purchase indent to purchase department.
Consolidate all such indents.
Make enquiry in the market for the suppliers who can provide best solution. Refer available price list and catalogs.
Accept quotations from suppliers - prepare comparative statement for suppliers to select vendor / supplier.
Negotiate with suppliers for rates and other terms and conditions.
Raise purchase order in name of supplier with all terms and conditions and dispatch schedule.
Within stipulated time cancel the order or amend the order (if necessary)
The order may be for the subcontracting where one have to give raw material (DC) and drawing specification (subcontracting specifications)
Receive order acknowledgement form supplier.
Meanwhile supplier sends material at stores - prepare GRN - Material inspection - Prepare GRIN
Inspection department gives GRIN - accept it and cross check - update the records
Have a liaison with accounts department to keep track of payments made to supplier and with stores for the pending orders.

Refer DFD & ERD

Materials Management and Inventory Module

• Inventory control includes control over raw materials, stores, supplies, spare parts tools components, assemblies, finished goods.
• Each job requires some material - material can be raw material, semi finished material or finished goods.
• Receiving documents (request) from Production or assembly department - 3 documents.
  BOM (Details of the items required to manufacture 1 finished product)
  Conversion sheet
  Material requirement note

If material is available (in stock) then
Issuing the required material along with a document called as MIN (Material issue note) to the production or assembly department.
Production department produces the finished goods and sends it back to stores with a document called production note. This note includes details of finished products, semi finished goods (WIP) and byproducts. - Receiving the finished products, WIP and byproducts from production department.
Receiving back the excess, damaged or faulty material along with MRN (material return note) from production
Else
Raising a purchase indent against purchase department to purchase the material.
Purchase department consolidates all such purchase indents - makes enquiry in the market - accepts quotations from various suppliers - selects the supplier and raises the purchase order.
Receiving the material against the purchase order along with DC (duplicate) from supplier.
Preparing GRN (Goods Receipt Note) and sending it to inspection department along with goods.
Inspection department inspects the goods considering quality aspects and prepares GRIN (Goods receipt inspection note) in triplicate. GRIN shows quantity received, quantity accepted and quantity rejected.
One copy and the inspected material comes back to stores to update the stock, second copy to purchase and third goes to accounts for payments to the supplier.
Preparing Material rejection note in name of supplier and sending back the faulty material to supplier .
In some cases supplier makes replacements for which again inspection and updation of stock.
Issuing material to subcontractor
Issuing the products to customer as per sales order
For each receipt and issue updation of stock for raw material, WIP and Finished products.
End if

• Material Scrap
• Finding out average consumption
• Determining cost and usage of each material
• Identifying the class (ABC) for various items.
• XYZ analysis
• Identification and Management of various levels of item i.e. Max level, min lavel, danger level, reorder level
• Identification reorder quantity - EOQ
• Consideration of lead-time.
• Implementation of LIFO & FIFO methods
• FSN Analysis (Fast / slow / non moving items)
• Maintaining various types of inventories
  Raw material : unfabricated materials which haven't undergone any conversion.
  Finished goods : produced products
  Work in progress : partially completed products
  Tools : standard tools used for machines & hand tools
  Machinery spare : components required for upkeep of machines such as oil, ball bearing etc.
  Consumables : items required in running the plan but which do not themselves go into the final products for eg brooms, cotton waste, brushes etc.
• Consideration of costs related with inventory
  Inventory carrying cost : cost of handling the stock.
  Capital cost : capital for inventory
  Storage cost : cost of space, building, maintenance
  Deterioration cost : reduction in inventory value as some parts may have limited self life and may deteriorate if stored for a long time.
  Material handling cost
  Obsolescence cost : items becomes useless due to change in design or specifications
  Procurement cost
  Set up cost
• Implementation of concepts like Bin Card and stores ledger

Generation of various reports and outputs.

Purchase Order Processing Module

• Receiving purchase requisition note or purchase indent from Stores department .
• Consolidation all such indents.
• Making enquiry in the market for the suppliers who can provide best solution. Refer available price list and catalogs - use past experience.
• Accepting quotations from suppliers - preparing comparative statement for suppliers to select vendor / supplier.
• Negotiating with suppliers for rates and other terms and conditions.
• Raise purchase order in name of supplier with all terms and conditions and dispatch schedule.
• Within stipulated time cancel the order or amend the order (if necessary)
• The order may be for the subcontracting where one have to give raw material (DC) and drawing specification (subcontracting specifications)
• Receive order acknowledgement form supplier.
• Inspection department gives GRIN - accept it and cross check - update the records
• Have a liaison with accounts department to keep track of payments made to supplier and with stores for the pending orders.
  
  Production planning & control
  Preparation of production plan considering resources, manpower, machine availability etc.
  Preparation of production schedule - shifts - work order break down into job orders.
  Making available all resources
  Assigning the targets - verification or variation of actual with standards.
  Quality inspection - quantity verification