Stores Management

Store is a place where goods/items are preserved. Storing the goods in a store is regarded
as storage. Storage is also sometimes called as store keeping.
Store or storage deals with receiving the materials, storing them and issuing them to
production departments or assembly lines as per the requirements. In other words, storage
is concerned with physical management and well being of the stocks.
Stores are not only used for stocking purchased materials but is also used to stock finished
goods, semifinished goods, consumables, spare parts etc. An effective management of
stores lead to successful functioning of the organization.
Objectives of Stores Management
The various objectives of stores management are as follows,
1. To protect the goods available in storage against the losses.
2. To make the goods available for on time delivery.
3. To provide low cost services of store keeping to the sales and manufacturing
department.
4. To ensure that the facilities of storage are located near the operating department.
5. To maintain the required material in adequate quantities.
6. To ensure that materials are not available in excess quantities than required.
7. To buy the materials as per the principle of economic order quantity as it helps in
minimizing the associated costs.
8. To ensure that the stores are maintained in clean and good condition.
9. To ensure that unauthorized persons do not enter the stores.
Requirements for an Efficient Stores Management
The various requirements of efficient stores management are explained as follows,
I. Stores Layout
The stores layout is one of the important requirement for the efficient stores management.
The following factors needs to be considered while planning the stores layout.
(a) Easy receipt, storage and issue of materials.
(b) A place which is near to the point where materials are
utilized.
(c) Flexibility in arrangement.
(d) Protection of stores from damage, wastage, pilferage
and deterioration.
(e) The design and physical appearance of buildings for
creating goodwill and attracting business.
(0 Installation of lighting system for avoiding theft and
stocking errors.
(g) Effective storage arrangement for processing the
customer orders easily and promptly.
(h) Effective use of floor space and height.
All the above factors needs to be considered while planning the stores layout for efficient
stores management.
II. Stock Verification
Even though, the storekeeper takes significant care in managing the stores or the clerk
carefully maintains the records, some variation occurs between the book balances and
actual balances of inventory. Hence, the need to verify each inventory item arises. Every
inventory item must be counted and verified against its book balance once in a year. The
books dealing with the items should be adjusted consequently for matching it with the
actual count. The verification of the stock is done in the following three ways,
1. Low Point Inventory
In this method, the firms verify the inventory when the stock is in low quantity. When the
process of stocktaking is irregular, the low point method reduces the time needed for the
work of actual inventory due to the involvement of materials in small quantities.
2. Continuous Inventory
In the beginning of the year, some companies make division of their inventory into 52
equal groups and one of these group is assigned for physical counting every week. This
type of approach has two advantages. Firstly, this approach can be planned easily and
worked as per the scheduled activities without any interruption or shutdown It can be
carried out in an orderly trimmer. Secondly, discrepancies can be identified and
eliminated through this approach.
3. Fixed Inventory
In this method, verification is done once in a year (starting with the financial year). This
requires the shutdown of production operation and an arrangement of special crew for
inventory job. This type of approach is suitable for seasonal business.
All these aspects of stores verification helps in the efficient stores managements.
III. Classification and Codification
Effective classification and codification of different items which are stored in the stock is
one of the important requirements of efficient stores management. The various advantages
of classification and codification are as follows,
1. The classification and codification groups similar
items systematically for identifying all the items accurately.
2. The chances of duplicate stocks of same item held
under different descriptions, name or different stores can be avoided with the help of
classification and codification.
3. It helps in decreasing the varieties and sizes.
4. The materials can be standardised and substitutes
can be detected easily through classification and codification.
5.
It assures accuracy in maintaining records, posting of receipts etc.