Many different patterns of milk collection exist in different countries. The pattern taken into consideration here is one whereby all milk is delivered by the producers to a collection and/or cooling centre. The collection centres belong to the same dairy organization as the dairy processing plant. The milk is weighed-in and bulked in cans at the collection centre. The milk is transported to the processing plant only once a day and evening milk can therefore be accepted in collection centres with cooling facilities only. Farmer accounts are maintained by the accounts section at the processing dairy. The recording system worked out below should be adjusted for other patterns of milk collection.
To facilitate the recording and accounting of milk supplies each producer should be given a code. This code should have three elements:
A code for the collection route;
a code for the collection centre. This code preceded by the code for the route identifies each collection centre;
a code for each producer supplying to a particular collection centre.
This code would also be useful in countries where a person can freely change his name. It also avoids confusion when a herdsboy or any other person supplies milk on behalf of a producer and gives his own name instead of the producer's name.
A register of producers should be kept at each collection centre for the producers supplying at that centre and one should be kept at the accounts office for all producers in the milkshed supplying to the processing plant. This register should show for each producer: his code number, his full name and any other particulars used in the country to identify a person.
The basic document for quantity control as well as for maintaining suppliers accounts is the Milk Receipt (see Form I). This document should be maintained in triplicate by the milk buyer in each collection centre. The second copy should be perforated in such a way that each receipt can be torn off to be given to individual suppliers. The first copy should be perforated so that the whole page can be torn out of the book while the third copy should not be perforated. The first and third copy should have space at the bottom for recording the total of the page, the quantity brought forward and the cumulative quantity. Each individual receipt should be numbered.
When the milk buyer at the collection centre receives milk from a producer he should carry out the usual tests and when the milk is accepted he should weigh it and record the quantity on a Milk Receipt. He should further fill in the date and the farmers code, he should also make a mark in the space after AM or PM to indicate whether it was morning or evening milk. The milk buyer should then sign the Milk Receipt, tear off the second copy and give it to the producer. When the milk buyer has made an error while filling in the quantity supplied he should not be allowed to alter the figure but he should cancel the receipt and write a new one. The second copy of a cancelled receipt should remain in the book.
Whatever system is used for recording milk purchases one should always avoid that the milkbuyer has to record the quantity supplied twice; once on a record kept by the producer and once on an accounting record. If the milk buyer writes a different figure on each of the documents this will create problems when the producer is paid and he could lose confidence in the whole dairy organization.
Every time the milk buyer has completed one page of milk receipts, he should add the quantities supplied recorded on that page and fill in the amount in the space “total of this page” the cumulative total of the previous page should be entered in the space “brought forward” and the new cumulative total should be calculated. The cumulation of totals should start from the first receipt made after the lorry transporting milk to the processing plant, has left the collection centre. For cooling centres collecting evening milk, the accumulated quantity should include the evening milk of one day and the morning milk of the next day.
When the purchase operations are closed the milk buyer should cancel the unused milk receipts of the last page used during the day and he should calculate the grand total of milk purchased ready for dispatch to the processing plant. Each milk can to be dispatched to the processing plant should be marked with the collection centre's code.
Accurate handing-over of milk from the milk buyer to the driver from the processing plant would be time consuming. The value of the milk lost during the process could be considerably higher than the benefit obtained from a very accurate handing-over, especially when there are several collection centres without cooling facilities along the same route.
If the milk buyer has filled the cans to capacity, only the number of full cans need to be counted and multiplied with their capacity. The volume of milk in the one can that is not full should be estimated or measured with a dipstick, if available. This should be recorded on a Delivery Note (see Form II) made in duplicate. The milk buyer should record the various capacities of the milk cans in the column “litres per can”. Since the capacity of milk cans is usually given in litres, it is easier if this part of the delivery note is completed in litres. The work of the milk buyer would also be simplified if a standard type of cans could be used. The one can that is not completely full should be recorded as a can with a different capacity than the others. The milk buyer should further enter the number of cans of each capacity and calculate the total litres by multiplying the litres per can with the number of cans. He should then add the figures in the column “total litres” to obtain the total number of litres handed over to the driver. This last figure multiplied by 1.0321 should give approximately the number of kilograms obtained on the last used page of the milk receipts.
The driver should sign the delivery note after checking that the number and types of cans loaded on the lorry agree with the entries on the delivery note. The first copy of the delivery note and the first copy of all used milk receipts should be handed over to the driver.
On arrival at the processing plant the driver should give the milk receipts and delivery notes to the receptionist. The milk cans should be off loaded on to the platform or a chain conveyor, taking care that the cans from each collection centre remain together. The milk which is accepted is tipped in the weighbowl and the quantity in kilograms should be recorded by the receptionist on the delivery note of the collection centre from where the milk originated. The volume of the weighbowl is usually larger than the content of one can; more cans may be tipped in the weighbowl before the quantity need to be recorded, as long as the milk from different collection centres is weighed separately. The receptionist should also count the number of cans received from each collection centre and this number should agree with the number of cans dispatched by the collection centre as recorded on the delivery note.
The quantity of rejected milk should be recorded in the appropriate space of the delivery note. The receptionist should then calculate the total fresh milk and the total milk received at the processing dairy. He should also convert the “total litres received by the driver” to kilograms. The total milk received at the dairy (including rejects) should be compared with the total kilograms received by the driver at the collection centre.
1 Or preferably by exact specific weight in the
The delivery note only allows to check on the drivers, but it is even more important to know if there is any difference between the quantity of milk purchased at each collection centre, which will be paid for, and the quantity of milk received at the processing dairy, which will eventually become available for sale.
This should be controlled by using the “Reception Quantity Control Sheet” (see Form III) to be maintained in duplicate by the receptionist. When the number of routes and collection centres is not too large only one sheet would be sufficient. In this case the form should be subdivided to allow space for totals of each collection route. When the number of collection centres would result in too large forms one reception quantity control sheet should be kept for each collection route. Whether one or more forms need to be used each day the procedure remains the same.
Before completing the reception quantity control sheet the receptionist should check the calculations made by the milk buyers on the milk receipts. He should then transfer the quantity purchased at each collection centre from the milk receipts to the reception quantity control sheet. The figures for the columns: “delivered to driver”, “total received at dairy” and “reject” should be obtained from the delivery notes. The delivery note number should be entered in the appropriate column to facilitate any verification required later on. The receptionist should then calculate the difference between the milk purchased and the milk received at the dairy. Because the figures used to calculate this difference are both obtained by weighing it gives the most accurate base for evaluating the efficiency of the purchase and transport operations. When the difference between the quantities purchased and received at the dairy for any one collection centre is important, all calculations on the milk receipts and delivery note for that collection centre should be checked before any conclusions are drawn. If after checking the difference is still significant it should normally be a shortage. If a surplus is found it would indicate that milk was bought at the collection centre but that no receipt was issued for it.
The difference between the milk purchased and the milk delivered to the driver need to be calculated only when the difference between milk purchased and milk delivered to the dairy is of any significance. In case such an important shortage occurs the reception quantity control sheet allows to identify who should be held responsible: the milk buyer at the collection centre or the driver.
The receptionist should further calculate the quantity of fresh milk available for further processing. This is obtained by deducting the quantity of rejected milk from the quantity of milk received at the dairy.
When the receptionist has entered the figures for all collection centres on the reception quantity control sheet he should calculate for each column sub totals per route and the grand total for the day. The difference between the milk purchased and the milk received at the dairy and also the daily total quantity of rejected milk should be calculated as a percentage of daily total quantity of milk purchased.
Because the measuring devices on the storage tanks in the processing sections usually show litres and because sales of most products are made in litres it is necessary that the receptionist converts the daily total of fresh milk from kilograms to litres. He should also calculate the total fat in the fresh milk using the average fat percentage obtained by the laboratory.
The daily totals should then be transferred to the reception control summary sheet (see Form IV). This document should be kept by the receptionist and covers the milk purchase and reception for a whole month. This document gives a better idea in the change taking place from day to day in the purchase and reception operations than could be obtained by looking through a file with the daily reception quantity control sheets.
On completion of these documents the receptionist should forward the milk receipts and one copy of the reception quantity control sheet to the accounts office where the accounts for the individual producers are kept. After copying the quantities recorded on the milk receipts to the appropriate producer accounts a total of all entries on the producer accounts should be made and this total should agree with the total milk purchased as recorded on the reception quantity control sheet.
At the end of the month the total quantity purchased as recorded on the producer accounts should agree with the monthly total of milk purchased as recorded on the reception control summary sheet. No payment calculation should be made before both totals agree.
In the dairy plant under consideration the pasteurisation section is responsible for the following activities:
The pasteurisation section receives in the first instance raw milk from the reception. Since the milk flows through a closed system from the dumptank in the reception to the storage tanks in the pasteurisation section the quantity weighed in at the reception should normally agree with the quantity of raw milk received by the pasteurisation section. The total quantity of milk received in litres as calculated on the reception quantity control sheet should be entered on the pasteurisation control sheet (see Form V). The readings on the storage tanks should only be used as a control. Only when a flow meter is available should the quantity measured by this device be recorded on the pasteurisation control sheet. The figures for fat content and total fat should be obtained from the reception quantity control sheet.
In many countries the raw milk supply does not meet the demand for liquid milk, at least at certain times of the year. Where this is the case, liquid milk has to be produced from milk powder and butteroil. The pasteurisation section being responsible for reconstitution, irregular mixing of the milk powder should be shown in the final result of this section.
The total volume and the quantity of fat in the butteroil used for recombination should be recorded on the “in” side of the pasteurisation control sheet. The opening stock to be recorded is the closing stock of the previous day.
After pasteurisation the milk is immediately distributed to the reception tanks of the processing sections and the quantity “out” should be read on the measuring device of these tanks. The fat content of the whole milk on the “out” side of the pasteurisation control sheet should be the same as that for the raw milk recorded on the “in” side. The fat content for cream and for recombined milk should be obtained from the laboratory and the total quantity of fat should be calculated.
The closing stock of the pasteurisation section should only consist of unpasteurised products since all pasteurised milk is stored in the processing sections.
At the end of each day the columns “litres” and “fat kg” should be totalled and the difference between “in” and “out” should be calculated for the total volume and the total quantity of fat. The % of loss or surplus should be calculated in function of the total intake. This last figure indicates the efficiency of the pasteurisation section.
The two main functions of the liquid milk section are the standardisation of the milk so as to obtain the fat content required in the final product and packaging that product in containers.
For the purpose of this publication the dairy plant produces two types of liquid milk; standard milk with 3% fat and low fat milk with 1.5% fat. Part of the milk is packed in single service containers of 1L and ½L and these packages are delivered in returnable crates. Another part of the milk is packaged in returnable 45L cans for distribution to hospitals, hotels etc.
The opening stock to be entered on the “in” side of the liquid milk control sheet (see Form VI) are the quantities of pasteurised milk left over-night in the storage tanks of the liquid milk section. The quantities to be entered as “received from pasteurisation section” should be read from the measuring device on the storage tanks of the section. These quantities as well as the fat content should be the same as the entries “to liquid milk section” on the “out” side of the pasteurisation control sheet.
On the “out” side of the liquid milk control sheet the number of units of each size and type should be recorded and converted into litres by multiplying the number of units with the corresponding unit size. The units should be counted at the time they enter the coldroom when they come under the responsibility of the storekeeper.
At the end of each day the difference between total “in” and total “out” should be calculated and the loss or surplus should be calculated as a percentage of the total “in”. This last figure for the number of litres as well as the quantity of fat indicate the efficiency of the liquid milk section.
The fermented milk section receives various types of milk from the pasteurisation section to be blended to the correct composition for producing the type of fermented milk required. The fermented milk section may also receive buttermilk from the butter section.
If any stock is carried over-night by the fermented milk section this should be entered as opening stock on the fermented milk control sheet (see Form VII). On the “in” side of the control sheet should further be recorded: the volume and fat content of the various types of milk received from other sections, starter and the volume of non-milk additives such as sugar, fruitpulp etc.
The figures to be recorded on the “out” side of the fermented milk control sheet should be obtained in the same way as for the liquid milk section as well as the difference and the loss/surplus percentage.
In the processing sections studied so far the total volume and the total fat used should also be found in the final product. This is not the case in the manufacture of butter, cheese, ghee etc. In these processes only part of the input is found in the final product and byproducts are produced, some of which can be marketed.
The documents to be used for the quantity control of these processes would be similar, they would have three sections: inputs, manufacturing and packaging. Butter making has been used as example in this publication. As far as quantity control is concerned three stages in the butter manufacturing are important: cream ripening (inputs), churning (manufacturing) and packaging.
In dairy plants where butter making is a daily operation there should always be ripened cream, prepared the previous day opening stock. During the day the butter section receives fresh cream from the pasteurisation section to which starter is added. The addition of these inputs gives the total available. The ripened cream transferred to the butter churn should be deducted from the total above to obtain the closing stock.
Each time the churn is filled with ripened cream the quantity should be recorded in the churning section of the butter control sheet (see Form VIII). The quantity of butter and butter milk obtained should also be recorded for each churn. The daily totals should be calculated for: cream used, butter and butter milk and the yield can then be calculated. The butter milk is issued to the liquid or the fermented milk section depending on the way it will be used. The quantity of butter milk issued by the butter section should also be found on the “in” side of the control sheet of the receiving section, in this example the fermented milk section.
The total quantity of butter produced should be entered as received on the packaging side. This quantity added to the stock of bulk butter not packaged the previous day gives the total available for packaging. The number of units packaged should be counted when entering the coldroom and should be multiplied by the unit weight to obtain the total kg packaged. To this should be added the closing stock of bulk butter and this should be compared with the total available. When the bulk butter kept over-night does not fall under the responsibility of the butter section, the headings opening and closing stock on the butter control sheet should be replaced by “received from coldroom” and “issued to coldroom” respectively. The coldroom control sheet should then also have space for recording the reception and issues of bulk butter.
The system for sales control described below is generally known as the pegboard system. It requires a board with a line of pegs at the top. Most boards available in commerce are also equipped with a sliding ruler and a device to put the board at different inclinations to facilitate the reading of the documents placed on the board. The documents to be used with the system need to have holes punched at the top so that they can fit in the pegs of the board. Because many calculations need to be made horizontally when using the peg board system the use of an adding machine or a calculator is necessary.
All products sold by the dairy plant should be printed on the documents, one line should be used for each unit size of each product. The documents should be printed in such a way that when the documents are fitted on the peg board the line for one particular product and size is at the same level on all the different types of documents. When putting these documents on the peg board each document should cover part of the previous one and only the column with the figures required should remain uncovered. When the figures that remained uncovered are added horizontally they give the total product by product.
The main advantage of the peg board system is that the figures of the original document need not to be copied on a summary sheet; a source of errors is thus eliminated and time saved. An additional advantage of the system is that, since all products are printed on invoices and delivery notes, the customers are constantly reminded of the full range of products offered for sale by the dairy plant.
The dairy plant for which the system is worked out in more detail employs its own sales-men who sell to retail shops not owned by the dairy organization. Although the subject of this publication is quality control, it would be unrealistic not to link quality control with the financial control when dealing with sales operations. The salesmen should at the end of each day inform the sales manager of their requirements for the next day. The sales manager should prepare one store issue voucher (see Form IX) in triplicate for each salesman. The last copy of the store issue voucher should remain in the book, the two other copies should be forwarded to the storekeeper who should prepare the consignments for each salesman as indicated on the issue voucher. The storekeeper should record the number of returnable crates and cans in the appropriate space of the issue voucher. When the goods are handed over to the salesman he should sign the two copies of the issue voucher, one of these copies should remain with the storekeeper. The salesman should keep the other copy for control at the gate of the dairy plant. No products should leave the plant without a store issue voucher. The sales manager may delegate the responsibility for completing the store issue voucher to an other staff member but this responsibility should never be given to a storekeeper because the store issue voucher is an authority for the storekeeper to issue the products recorded on it.
When the goods are delivered to the customer the salesman should prepare a delivery note (see Form X) if the customer is allowed to buy on credit or a cash sale. These documents should be made in triplicate. The customer should sign all three copies of the delivery note while the salesman should sign all copies of the cash sale when he has received the payment. The first copy of the delivery note or cash sale should be given to the customer, the other copies should remain in the book.
When the salesman has completed his route he should bring the unsold products to the coldroom and give his copy of the store issue voucher to the storekeeper. The storekeeper should record the returned products and containers on the two copies of the store issue voucher and he should calculate the net sales of each product.
One copy of the store issue voucher should remain with the storekeeper and the salesman should take the other copy together with the delivery notes and cash sales to the sales manager. The sales manager should first check if no alterations were made on the salesman's copy of the issue voucher by comparing it with the copy that remained in the book.
The sales manager should then take the second copy of the delivery notes and cash sales out the book and put them on the peg board with the quantity column uncovered. He should add the quantities recorded on the delivery notes and cash sales for each product (line by line) and these totals should agree with the net quantity for each product recorded on the store issue voucher. The delivery notes and cash sales should then be replaced on the peg board so that the columns with the amounts remain free. The amounts should be added line by line and the results recorded on the store issue voucher.
The following checks should then be carried out:
The net quantity of each product as recorded on the store issue voucher multiplied by the unit price should equal the amount obtained by the addition of delivery notes and cash sales.
The addition (vertical) of the amounts per product on the store issue voucher should agree with the addition (horizontal) of the total amounts of all delivery notes and cash sales.
The net quantity of containers can be a negative figure when more containers were returned than delivered. This should be clearly indicated, e.g. by making a ring around negative figures. The sales manager should further calculate the total amount of credit sales and the total amount of cash sales and record them in the appropriate space of the store issue voucher. To avoid confusion between cash sales and credit sales the documents may be printed on different colours of paper.
The salesman should pay the cash collected during his tour to the cashier who should issue a receipt. The salesman should bring his copy of the cash receipt to the sales manager who would record the amount of the receipt on the store issue voucher. If this amount agrees with the total of the cash sales as calculated previously the process is completed. When there is a difference between the two amounts action should be taken depending on the policy of the dairy organization in such matters. On the store issue voucher (see Form IX) space has been provided for showing an eventual shortage or overage of the salesman. This is necessary in cases where shortages are deducted from the salesman's pay. Surplusses could be used for offsetting shortages made by the salesman or they could be considered as miscellaneous revenue for the dairy plant.
When all salesmen have returned to the plant and their store issue vouchers are checked the sales manager should put all store issue vouchers on the peg board and calculate the daily sales summary (see Form XI). These daily sales summaries can later be used for preparing weekly and/or monthly summaries.
The store issue vouchers should be filed per salesman. At the end of a week or a month each salesman's vouchers should be put on the peg board to calculate his total sales, shortages or surplusses. The monthly total sales can be used for comparing each salesman's performance with that of his colleagues or with the performances of previous periods. It can also be used as a basis for calculating each salesman's sales commission where this is applicable.
When besides the wholesale operations described above, the dairy organization also operates its own retail outlets the procedures would be similar. The main difference would be that no delivery notes or cash sales are used and the control of this operation should be done with the store issue vouchers only. Daily, weekly and monthly sales summaries should be made separately for wholesale and retail operations otherwise the control based on the quantity-price relation would be lost.
For dairy plants that bring a large range of products on the market the documents used with the peg board system may become too long. In this case each sales document presented in this publication should be split into two similar documents each with different products. Products with a long shelf life would in most cases be distributed less frequently than products with a short shelf life and this could be used as a criterion for separating the products.
The coldroom receives products from two sides: the production sections of the plant and unsold returns from the salesmen. The entries into the coldroom from the production sections should be the same as the quantities “out” recorded on the control sheet of each production section.
The quantities returned by the salesmen can be obtained by adding the return column of the store issue vouchers of all salesmen. The storekeeper should put the copy of the store issue vouchers that remained in the coldroom on the peg board to make this addition. The returns should be recorded separately from the fresh products on the coldroom control sheet (see Forms XII-XIII-XIV). This is necessary because it is usually not the storekeeper's responsibility to decide what should be done with the returns, but as long as they remain in the coldroom he is responsible and they need to be recorded.
When a decision has been made as to how the returns will be used, normally the next day, the quantities that can still be used should be recorded as “other issues” on the coldroom control sheet and as received in the section where they will be used. If the returns would be used by more than one production section this should be specified on the coldroom control sheet and more lines should be provided for “other issues”. Returns that cannot be used should be recorded as leakages.
If the keeping quality of the product allows the returns to be sold as fresh products the quantity of these returns should first be recorded as “other issues” in the return column and entered as received in the fresh product columns of the coldroom control sheet.
The sales issues of fresh products should be obtained by adding the “quantity issued” column of all store issue vouchers issued during the day. “Other issues” of fresh products may be products taken for laboratory tests or products distributed free of charge to visitors or staff.
When all figures are filled in on the coldroom control sheet, the storekeeper can calculate the total intake, issues and closing stock in units and in litres.
Regularly a senior staff member should do a physical stock-taking and record his findings on the line “physical stock”. If there is any difference between the physical stock and the calculated stock this should be recorded on the coldroom control sheet and appropriate action should be taken. When stock-taking has been done the physical stock should be carried forward as opening stock for the next day and not the calculated stock, otherwise the difference would accumulate.
