Stores management anil

Stores management

1. STORE MANAGEMENT

1 | P a g e P r o f . ( D r . ) A n i l M i s h r a

Store is a place where excess material is kept which will be used as and when required. Loss of items,
deterioration, obsolescence and inadequacy [of what is stored to what is needed] are treated as ‘part of
life’. Store management is “to receive materials, to protect them while in storage from damage &
unauthorized removal, to issue the material in the right quantities, at the right time to the right place
and to provide this service promptly and at least cost”.
Stores management is part of the overall function of materials management. In order, therefore, to
understand the function of the former it is desirable to have a clear understanding of what materials
management stands for.
According to Alford and Beatty “storekeeping is that aspect of material control concerned with the
physical storage of goods.” In other words, storekeeping relates to art of preserving raw materials,
work-in-progress and finished goods in the stores.
Storehouse is a building provided for preserving materials, stores and finished goods. The in-charge of
store is called storekeeper or stores manager. The organization of the stores department depends upon
the size and layout of the factory, nature of the materials stored and frequency of purchases and issue
of materials.
Objectives of store management:
In the chain of internal customers and suppliers, a store has several internal customers. As a matter of
fact all functions of management are internal customers to stores. Customers as usual expect Quality
Cost and Delivery from every supplier. Stores also have to deliver these customer expectations. In the
process of discharging this obligation Stores perform some activities that are functions of Stores.
Following are the main objectives of an efficient system of storekeeping:
1. To ensure uninterrupted supply of materials and stores without delay to various production and
service departments of the organization.
2. To prevent over-stocking and under-stocking of materials.
3. To protect materials from pilferage, theft fire and other risks.
4. To minimize the storage costs.
5. To ensure proper and continuous control over materials.
Functions of store management:
1. Receipt: Any item of goods or material that enters the organization always enters through the stores.
Similarly, every item unless specifically excluded, has to leave through the store. Stores are the final
account keeper of all materials. Material sent by any supplier after the security clearance comes to the
stores. Stores check the document carried by the carrier, known as Delivery Challan, against the copy of
the Purchase Order placed on the supplier by the organization. Once the adequacy is established and
quantity is verified the material is sent for testing for quality parameters. Sometimes quality control

2. STORE MANAGEMENT

2 | P a g e P r o f . ( D r . ) A n i l M i s h r a

tests are elaborate and time consuming. If the policy of receipt is to unload the material subject to
quality control acceptance, it is cleared for unloading. Unloaded material is kept on the hold if it not yet
cleared by quality control department. If the material is rejected it is sent back to the supplier after
clear.
So receipt is the process of checking and accepting, from all sources (vendors, production units, repair
units etc.), all materials and parts which are used in the organization. These include supplies for
manufacturing or operating processes, plant maintenance, offices and capital installations.
2. Storage: The store room should be located at a convenient and appropriate place. It should have
ample facilities to store the materials properly viz. bins, racks and shelves etc. There can be a single
store room in case of a small organization, but a large scale concern can have different or multiple stock
rooms in addition to general or main store. The separate stockrooms may be used for different classes
of inventories. The material should be stored in such a manner as to protect it against the risks of
damage, destruction and any kind of loss. Storage plan is made keeping in mind, a). Nature of the
product- physical state, toxicity, inflammability and other hazards. b). Volume and weight- heavy or light
c). Movement frequency- fast moving or slow moving d). Point of use.
3. Retrieval: Retrieval helps to easy accessibility to materials and ensures optimum space utilization.
Materials can be retrived with ease. It is common knowledge in many of the companies that after hours
of searching for the item is declared to be out of stock. This causes hold up of production process and
avoidable urgent purchase of out of stock material. This function takes place as per established retrieval
system.
4. Issue: The materials should be issued to respective departments on receiving duly authorized
requisition slips. It satisfies the demand of consuming departments by proper issue of inventories on
receiving the requisition.
5. Records: Various records are used in the stores.
Bin cards: These cards are very simple, giving the description of the item including the code no., the unit
of issues, the quantity of the item, etc.
Stock cards: These are kept in the stores office. There are various kinds of stock cards- Showing the
quantity only, Showing the quantities and unit price, Showing the quantities, unit price, value of stock,
value of the balance in stock.
6. Housekeeping: The space is kept neat and clean so that material handling, preservation, storage,
issue and receipt is done satisfactorily. Good housekeeping ensures satisfactory work practices.
7. Control: Taking measures to ensure material plan is being adhered to. Any changes in consumption
pattern or replenishment pattern are closely monitored for corrective action. Material movement is
watched to identify nonmoving material for disposal. Effective control puts into effect management
objective of ‘no shortage and no excess’.

3. STORE MANAGEMENT

3 | P a g e P r o f . ( D r . ) A n i l M i s h r a

8. Surplus Stock: A surplus is the amount of an asset or resource that exceeds the portion that is
utilized. A surplus is used to describe many excess assets including income, profits, capital and goods.
Scrap and surplus disposal management is a function of stores. Effective disposal system for unneeded
material to reduce inventory cost and proactive measures to eliminate deterioration and obsolescence.
Obsolete items are good in all respect but have no useful role in the company due to changes that have
occurred in the course of time. Surplus items are those that have accumulated due to faulty planning,
forecasting and purchasing. Hence a usage value is associated with these items. Scrap is wastage
generated due to processes like turning, boring drilling etc. and also due to bad manufacturing. It is said
that in India nearly Rs. 2500 crores are tied up as obsolete, surplus and scrap items.
9. Verification & packaging: physical verification and purchase initiation to avoid stock-outs. Materials
dispatched to customers from the finished goods store or from one store to another at different
location require to be packed. Materials required packing according to their nature and this may vary
from heavy wooden crates to ordinary paper cartons.
10. Interaction &coordination: Coordination and interaction is used to interface with production and
inspection department. Very close interaction between Purchasing, production, quality control and
engineering functions is obviously needed in the discharge of the functions discussed so far. It also
becomes necessary to coordinate the flow of material samples and information through a network of
departments for performance of stores functions. Besides, every management function being an
internal customer interaction is very important.
Types of stores:
Stores may be centralised or decentralised.
1) Centralised: Centralised storage means a single store for the whole organization. Centralised
storekeeping ensures better layout and control of stores, economical use of storage space, lesser
staff, saving in storage costs and appointment of experts for handling storage problems. It further
ensures continuous stock checking.
Advantages of centralized store: The variety of goods can be supplied to all users from one small
location. Less manpower will be required. Better control of materials is possible. Material handling
will be easy. Wastage and deterioration of materials will be less.
Drawbacks: It leads to higher cost of materials handling, delay in issue of materials to respective
departments, exposure of materials to risks of fire and accident losses are practical difficulties in
managing big stores.

4. STORE MANAGEMENT

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Features of centralized stores organization:
a. Effective supervision and control. b. Issue at single point reduces cost of issue. c. Reduced
personnel requirement. d. Efficient layout for stores. e. Better handling technology. f. Better
inventory checks. g. Maintenance of optimum stores. h. Elaborate documentation.

2) Decentralized: Decentralized storage means independent small stores attached to various
departments. Decentralised stores involve lesser costs and time in moving bulky materials to
distant departments and are helpful in avoiding overcrowding in central store.
Advantages of decentralized stores: Reduced material handling and associated cost. Less chances of
bottlenecks and delays. Convenient for every department to draw materials. Less transportation
time.
Drawbacks: uniformity in storage policy of goods cannot be achieved under decentralised
storekeeping, more staff is needed and experts may not be appointed.

Features of decentralized stores organization:
a. Reduced handling. b. Customer friendly. c. fewer production stoppages. d. Visual management
is easier.
Centralization or Decentralization then is a matter of convenience. However, one basic organizational
feature must be observed. The entire Stores setup should be under the unified control of one
department with Senior Controller of Stores in charge, in order to efficiently achieve the objectives of
the function of stores.

5. STORE MANAGEMENT

5 | P a g e P r o f . ( D r . ) A n i l M i s h r a

Stores fall into broadly two categories contingent on the following considerations:
1) Functional: depending on the use to which the material is put chemical, tools, raw materials
stores, etc.
Eg: Raw material store, Production Store, General Store, Tools Store, Salvage Store, Packing
Store, Spare Store, Receipt Store, Quarantine Store, Finished Goods Store.
2) Physical: depending on its size and location, central stores, sub-stores, sites stores, etc.
Eg: Central Store, Sub-store, Departmental Store, Group Store, Site Store, Transit Store, and so
on.
Some other types of storage:
As per types of the materials stored:
 Raw Materials store
 Components store
 Work in process store
 Finished goods store
 Semi finished goods store
 Tools store, die crib
 Consumable materials store
As per nature of the materials stored:
 LPG store
 Chemicals store
 Hazardous materials store
 Refrigerated materials store
As per function of the storage:
 Receiving store
 Central store
 General stores
 Sub stores
Stores Layout
Physical arrangement of storage facilities for efficient receipt, storage and issue of materials is called as
layout of stores. In a properly arranged store, the materials are properly maintained. It involves
minimum of handling and optimum utilization of space.

6. STORE MANAGEMENT

6 | P a g e P r o f . ( D r . ) A n i l M i s h r a

Factors affecting stores layout
 Type of Stock
 Volume of stock
 Availability of space
 Physical factors
Store System
Closed door system: the stored material is held under lock and key. Entry into the store is restricted
authorized persons only. Physical movement of the material is only with authorized documents only.
Maximum security and tight control on movement are features of this system.
Open stores system: In this system material is stored near point of use and there is restriction on
consumption. Control passes on to the operations department
Flows are two types like U-Flow & - Through Flow (from side to side)












Number of possible lay-outs most common being U-flow and through-flow
Through flow (particularly in manufacturing)
Raw materials and finished products arrive and depart from different areas in the store.
Most important objective is reduce time taken to pick stock.
U-flow













Through-flow













Low usage items


Medium usage items



High usage items


Goods-In Dispatches

Low usage items


Medium usage items


Goods-In High usage items Dispatches


Medium usage items


Low usage items

7. STORE MANAGEMENT

7 | P a g e P r o f . ( D r . ) A n i l M i s h r a

i.e. High turnover items easily accessed (close to hand). Travelling distance for staff minimised.
AUTOMATED STORAGE, HANDLING AND RETRIEVAL SYSTEMS
Robots, A-frames, automated stacking cranes
Constraints need to be clearly identified before investment
Will expensive automation resolve?
What will be the impact on processes? (Dispensary example)
ADVANTAGES
• Space. Smaller footprint required than for manual processes but beware capacity
• Speed
• Accuracy
DISADVANTAGES
• Cost
• Power or system failure. Goods difficult to retrieve in event of breakdown. Anyone been in?
What other options are available for you to embrace automation?
• Ward order assembly