Mco Working New

7/28/2019 Mco Working New

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(anand dubey

JWM/OFILKN


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WORKING PROCEDURE &

FUNCTION OF MCO


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OBJECTIVES OF M.C.O.

Different types of materials / stores / items are

required to be procured for production of

PRODUCTS their accessories, Maintenance

Sections, and Offices etc.

The job of Material Control Office (MCO) is toascertain the exact requirement with correct

specifications, sizes and quality as specified.


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PRE REQUISITES

Advance regarding receipts of extract or Centraldemand. IFD from P& P and Project Office.

OFBS current year Production Program AND SIZE

DETAIL accepted by the factory.

Estimates from R&E Section formanufacture ofempty components. packing assembly etc.

Requisitions from user sections for indirect items and

ad hoc requirements.

Spot estimates/drafts received from sections.


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MCO:FUNCTIONS (summarized)

Planning of direct & indirect materials/stores asper production program and then to raise SHIS

individually for each type of material / store.

To find out the genuineness of ad hoc

requirements of production shops, maintenance

sections, offices.

To ascertain correctness of specifications, sizes,

types, quality etc To ascertain the mode of purchase i.e.

placement of IFD/Indents or through trade.


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Contd

To evolve a scientific inventory control procedure

by classifying the materials into A, B, C & X, Y, Z

types depending upon annual usage value of

the material and stock value of the material

and suggesting proper procurement plans foreach class.

Maintaining the up-to-date and accurate stocks

and dues position, Monitoring of stock items to

get the supply of correct material at correct time.


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Contd Preparing periodical reports regarding pending

orders requiring follow-up. Preparing periodical reports indicating surplus

and different items.

Preparing periodical reports about items where

stock is below a certain minimum level.

To work out the material requirements everysix month indicating the availability of alternateitems, thus enabling the factory to explore thefeasibility of utilizing available alternatematerial.

Assessing the repercussions of a changedprogramme on material stock.


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Contd

Reviewing all items for non moving, slow moving

and dead stocks.

To prepare a mutual aid list highlighting the high

value items and circulating them to all sisters

Ordnance Fys., Inspectorates and otherdepartments as prescribed for quick disposal of

surplus materials.

Budgetary estimate for Direct & Indirect

materials / Stores along with expected receiptsand issues (IFD + Trade Firms etc.) and project

the same to OFB (Fin. Sec.) for fund allotment.


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Contd

To scrutinize the tender documents at the time of

preliminary selection for the items, especially

technical side.

Supply order is to be examined before placement on

the firm for the correctness of the item, supply

schedule, advance sample requirement etc.

Audit reply pertaining to demand is to be dealt with.

Liasioning with Vetting Cell, Planning Office, Design

Office, Provision Office, Production Section, LocalAccounts Office (specially ledger section), Computer

Section and Stores.

.


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After receipt of the material, the user section is to

be intimated the position of arrival of the item and

its drawl is also monitored through material

warrants/ SWOD and in few cases Demand Note

also being cleared by MCO before drawl from

stock.


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REPORTS

MAS

A CATEGORY ITEMS

SM/NM LIST(1/3 YEARS)

ORDINARY INDIGENOUS ITEMS (6 MONTH)

IMPORTED ITEMS (12 MONTHS NSP ITEMS)

STOCK PILE ITEMS (9 MONTHS SP PERMITTED)


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WORKING OUT REQUIREMENTS

Normally provisioning should be made on the basis ofrequirement as assessed with reference to firm demands

from the services and other indenters.

As regard items of imported origin, indents may be placedunto 12 months in advance of the period of utilization

which will be 12 months i.e. for a requirement unto 24

months less stock & dues against firm demands.

As regard difficult indigenous items, indents may be placed

up to 06 months in advance of the period of utilization

which will be 12 months i.e. for a requirement unto 18

months less stock & dues against firm demands.


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For ordinary indigenous items, indents may be placed up

to 06 months in advance of the period of utilization which

will be 12 months i.e. for a requirement up to 18 monthsless stock & dues against firm demand.

Provision for general purpose stores and maintenance

stores which are not required directly against production

will normally be made on the basis of the monthly

average consumption of the preceding 24 months.

Stock pile of non-perishable imported materials shall

build up to 9 months requirements and of difficult

indigenous materials up to 4 months requirement.


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The optimum level of stock to be held by factory at any time

in respect of imported stores, the difficult indigenous itemsand ordinary indigenous items may be as follows:

a) Imported items :12 months requirement

for non stock pile items, :6 months requirement(exclusive of stock pile wherever authorized).

b) Difficult indigenous items :03 months requirement

(exclusive of stock pile, wherever authorized).

c) Ordinary indigenous items :6 months requirement.


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FLOW CHART OF MCO


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MP SHEET VIS A VIS SHIS

A)Computerized Material Planning Sheets

These are generated by factory EDP/MCO section giving

the position as on First May and First November of the

year. They show requirements, availability and deficiency

on their basesand also stock and dues of each materiel.For this purpose the following -details are required:-

Dues position of S.O, Contracts and Indents etc.

Stores transaction documents like demand Note, return

Note, Receipt voucher, Issue voucher etc. Production Programme reporting proforma (PPRP)

Wanting bills of materials as projected in PPRP.


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B) Store Holders Inability Sheet:

In such cases where MP sheet not received, this is

prepared by MCO giving details similar to MP Sheet. This

also shows last supplier and likely suppliers.

Based on the data from Bill of materials, MCO prepares a

document showing the net requirement of any item for a

particular period taking into consideration the stocks,

semis & dues, called the Store Holders Inability Sheet

(SHIS).


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REQUIREMENT WORK-OUT

Total requirement say 1090 kg. Stock on the date of SHIS say 210 kgs.

Dues against old SOs say 33 kgs.

Net requirement 1090-(210+33) = 847 kgs.

Rounded off to the nearest figure 850 kgs.

So the SHIS shall be prepared for 850 kgs. Further information required to be given in the SHIS.

Last Paid Rate (LPR).

Last source of supply (LSS).

Last Order Details.

Special remarks, if any.

Delivery Requirements.

Basis of SHIS.

Budget Code.

Extracts No.

Nomenclature, L.F No, Specification No.


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SIH

Factories are permitted to hold SIH inventory as :

Group of Factories Over-all SIH Inventory Level

AV 6 Months

OEF 3 Months

Others 4 Months


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Contd

(a) OF Board approval should be obtained for making anywithdrawal from stockpile.

(b) Stockpile is permissible only in respect of 'imported'

and difficult to procure indigenous stores, the

maximum limit for each category being 6 months' and

3 months' requirement respectively, unless specifically

authorised for higher levels.

(c) The withdrawal from stockpile will be first transferred

to Stock Ledger and issued on Demand Notes.


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PROVISIONING PERIOD

The total provisioning period normally varies from 18 to24 months depending on

I) Whether the item is a direct material used in

production or indirect material for maintenance/generalpurpose use and

II) Whether the item is imported or indigenous.

The provisioning period consists of two parts viz.

(i) lead-time and

(ii) the period of utilisation.


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a) The lead time is intended to cover all actions up to

materialization of supplies i.e. assessment of netrequirement, procurement consisting of tender action,

tender decision, placement of orders and delivery period

required by the supplier.

b) Period of utilisation is the production period during

which the entire ordered quantity will be utilised for

meeting the production target after full drawl of stock and

supplies received against dues at the time of provisioning

action. The period of utilisation covers a period of 12months.


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DETERMINATION OF REQUIREMENT

Gross requirement of direct material will be worked

out based on product estimate and quantity to be

produced during the year.

Good dues and stock will be subtracted from the

gross requirement to work out net requirement for

procurement.

If the end product is being phased out before next

procurement cycle, WIP should also be subtracted from

the gross requirement.

Requirement of indirect material normally will be

worked out based on average consumption during past

24 months.


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THANKS


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Documents

Mco Working New