Concepts and Practices of Workshop Organisation and Management

1. Cyril Potter College of Education
Technical Education Teacher Training
2014 - 2015
MODULE:
Workshop Organisation & Management
Ardith Conway

2. Inventory
Inventory or stock refers to the goods and
materials that an organization holds for the
ultimate purpose of use (or repair).
Inventory management is a science
primarily about specifying the shape and
percentage of stocked goods.

3. Essential Elements of
Inventory
1.Maintaining Enough Inventory
Your Institution’s basic stock should provide a reasonable
assortment of products and should be big enough to cover the
normal demands of your organization.
When calculating basic stock, you must also factor in lead time
-- the length of time between reordering and receiving a
product. For instance, if your lead time is four weeks and a
particular product line sells 10 units a week, then you must
reorder before the basic inventory level falls below 40 units. If
you do not reorder until you actually need the stock, you'll
have to wait four weeks without the product.

4. Essential Elements of
Inventory
2. Avoid Excess Inventory
This reduces the lost that may be incurred by the
organization due to some f the items not being used and
may pass their shelf life leading to them having to be
disposed.
3. Tracking Inventory
A good inventory tracking system will tell you what
merchandise is in stock, what is on order, when it will arrive
and what you've used.

5. Areas in Inventory
1. Replacement costs
2. Stock taking
3. Insurance
4. Fixed and moveable assets
5. Legal accountability
6. Stock control documentation
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6. Replacement Cost
Replacement cost is the cost to replace the assets of a
company or a property of the same or equal value.
The replacement cost asset of a company could be a
building, stocks or accounts receivable. This cost can
change depending on changes in market value. It may
also be referred to as the price that will have to be
paid to replace an existing asset with a similar asset.
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7. Facts of Replacement Cost
The replacement cost of an item is the amount your
business will spend to restock it after it has been sold. As
many business items are sold in bulk at wholesale prices,
the replacement cost may vary over time depending upon
your supplier pricing, any deals your business can
negotiate and the size of your orders. The market value is
the value of these same items at your retail pricing, and
will fluctuate as you change your pricing or offer special
deals to your customers.
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8. Significance of Replacement Cost
Replacement cost is used to calculate the amount your business
will spend to restock an item after it has been sold, or if it has
been rendered unsalable while in inventory.
In any profitable business, the replacement cost will be lower than the market
value, preferably much lower. The replacement cost of your inventory represents
actual money spent, and now tied up in your goods in stock. The market value is a
notional value--until the goods have been sold at retail, you cannot realize this
value from your inventory.
Identification of Replacement Cost
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9. Considerations of Replacement Cost
 Most businesses can cut costs significantly by reducing the amount of
inventory they must keep in stock; the faster you turn around your
goods between the time of purchase and their retail sale, the less of
your business capital is tied up in existing inventory. Keep track of
both replacement cost and market value of your goods in stock, to
ensure that you are making best use of your capital on hand, and
that you are maximizing your sales.
 There are a lot of implementation issues that should be
addressed. Perhaps the most persistent and fundamental
criticism of replacement cost measures is the lack of relevance
when there is little or no prospect that the existing assets will
be replaced with identical, or even similar, assets.
"Replacement Cost" in the Inventory
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10. STOCKTAKING
Stock-taking or inventory checking is the
physical verification of the quantities and condition
of items held in an inventory or warehouse. This
may be done to provide an audit of existing stock.
Regular stocktaking is an essential element of a
loss minimization strategy. The process helps you
to compare actual stock levels with the stock
levels based on your ordering records

11. Inaccurate Stock Taking
Often the effectiveness of the stocktaking process can
influence the accuracy of information it produces. This may
lead to a situation where it appears that there are stock
losses when actually the missing stock has simply been
overlooked.
This type of problem would indicate either:
•the need for staff training or
•the current stock tracking method needs to be reviewed
The first step in this process is to examine the current
stocktaking procedure used in your workplace.
Of particular importance are these two questions:
•how accurate is the information that is collected?
•how strictly is it followed by staff?
Stocktaking and Security

12. INSURANCE
Insurance is an arrangement by which a company
or the state undertakes to provide a guarantee of
compensation for specified loss, damage, illness, or
death in return for payment of a specified premium.
Insurance can help you manage the risks of
relatively rare, but expensive events, throughout
your life such as car accident, theft or fire. Without
the protection of an insurance policy, you would be
responsible for covering the loss you experienced.
Purpose of insurance

13. What should inventory
insurance cover?
This inventory insurance policy should cover direct physical
loss or damage from external causes while tools and
equipment are in the care of the institution.
Some of the causes of loss covered are:
•Damage during handling of tools and equipment,
•Theft and/or pilferage of tools and equipment.
•Damage caused by Acts of God or Natural Disasters
NB. The New Amsterdam Technical Institute does not have an
insurance policy covering tools and equipment, but since it has
been purchasing/ acquiring a lot of very expensive equipment and
machinery. It is vital that a relevant insurance plan be
established .

14. FIXED AND MOVEABLE
ASSETS
Maintaining accurate and timely data of fixed and
moveable assets is important to the maintenance of a
TVET Workshop or Laboratory since the information it
provides will be beneficial to all parties involved.
The inventory system should have two components – a
physical system of inventory and an electronic system to
“back-up” the information gathered and to protect the
integrity of the inventory system.

15. FIXED AND MOVEABLE
ASSETS
Fixed and moveable assets comprises of furniture,
tools and equipment. It is the responsibility of
Laboratory Technicians and Senior Lecturers to
ensure that each laboratory has an accurate
inventory of all the items under their control.
Accountability is a key element to having an
efficient inventory system. Apart from ensuring
that all items used at the start of every session is
accounted for upon completion of the student’s
activities, the following systems should be
followed rigidly to maintain if an accurate
inventory system is to be maintained.

16. Coding of items:
All items belonging to a section should be appropriately coded
so as to make the item easily identifiable. For example,
equipment in the carpentry workshop should bear a code which
will comprise of the initials of the workshop and possibly the
date of the acquisition of the item.
Loan of tools and equipment
Items which were loaned to another section should be properly
accounted for. These items should be recorded in a book where
the borrower sign to uplift and the Technician sign when the
item is returned.
Writing off broken or defective items
Items which are broken or has become defective should be identified
as such on the inventory and should be made to have them repaired.
If this is not possible, then the prescribed system should be followed
to have the items written off the inventory. Similarly, obsolete items
should be taken off the inventory in order to maintain clear and
accurate information.

17. Acquisition of new items
Items which were recently acquired should be immediately
coded and added to the laboratory’s inventory.
Change of location/transfer of items
When items change location or are transferred to another for
example items from the electrical workshop transferred to
the automotive workshop, this should be clearly reflected on
the inventories so the item can be properly accounted for.
It is also important for periodical inspections to be carried out
to test the validity of the information on the inventory. These
can be scheduled either quarterly or annually by stores
personnel.

18. STOCK CONTROL
DOCUMENTATION (SCD)
Stock control, otherwise known as inventory control, is
used to show how much stock you have at any one time,
and how you keep track (i.e, document) it. The following
practices may be employed:
Identify stock control documentation (SCD) terms,
principles, and objectives
 Because clear and precise definitions of terms, principles,
and objectives are necessary for effective communication,
a glossary should be prepared that concisely defines the
terms, principles, and objectives used by an institution.
 Principles should be established that promote accurate,
complete, and timely data and records

 Objectives should be identified that detect and deter the
loss, theft, and diversion of material or equipment, and
meet agreed safeguards and standards
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19. STOCK CONTROL
DOCUMENTATION (SCD)
Establish an effective stock control documentation (SCD)
organization.
The roles, responsibilities, and authorities of the SCD manager and
organization should be well defined and communicated, and
should include the authority to cease operation in the event of an
anomaly in daily schedule or happenings
Develop, implement, and validate measurement methods
capable of providing the required levels of accuracy and
precision.
Sources of measurement errors should be identified and, to the
extent possible, reduced or mitigated. Examples of this include
effects of external factors such as humans, humidity, and heat.
Measurement systems and people operating them should be qualified
and benchmarked (for example, blind samples and external sample
exchange programs).
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20. STOCK CONTROL
DOCUMENTATION (SCD)
Establish a complete, accurate, and timely record of the
entire inventory.
It should be able to provide a complete audit trail for all
equipment and materials from receipt through disposition,
including documentation of all movements or transactions.
Measures should be established and checks implemented to
ensure data accuracy and detect any unauthorized access to
data and/or equipment. Accountancy is the responsibility of
each workshop or site.
Establish a system for materials and equipment control
using well defined geographical areas within the
workshop/laboratory/site.
Each workshop and laboratory should implement appropriate
physical security and administrative controls to permit
controlled access to the area by personnel and prevent any
unauthorized access. Alarms and procedures to assess
anomalies should be established.
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21. LEGAL ACCOUNTABILITY
Stock or Inventory Control is a process all institutions perform to ensure
they manage all items owned and used by various departments. These
operations are often decided by policies of Central Ministry and those
governing the management of TVET Institutions. All forms of policy are
legally approved and accountable within the parameters of the Education
Act of Guyana.
Schools are a common user of inventory control because they typically have
limited capital resources to replace items. Capital is disbursed from
government coffers through approved institution budgets.
Inventory items include school supplies, janitorial items, audio/visual
equipment and extra furniture, among other items. In addition to
students and employees, educational institutions have outsiders on
campus---such as parents, vendors and maintenance personnel---who
may have access to school items. Developing a strong inventory control
system can is imperative and legally binding to limit or prohibit
unauthorized use or abuse of these items.
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22. References
•Retrieved from
http://www.researchgate.net/publication/223583837_Assess
ing_replacement_cost_of_conservation_areas_How_does_habit
at_loss_influence_priorities
•http://www.investopedia.com/terms/r/replacementcost.asp
•http://smallbusiness.chron.com/replacement-cost-vs-
market-value-4126.html
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