15-04-2024

Store Management and Control

• The space, room and the building where various type of materials, semifinished,
finished goods and items purchased and manufactured in the organization are kept
temporarily or for sufficient time till they are moved to supply for production and
sale or used for consumption is called Store or Warehouse.

Store Store Store

Raw material Facility Part Facility Component Facility

Input Output

Functions of Storage and Warehousing

The functions of receiving and storage of materials are:

(a) Receipt, identification, and general inspection of incoming materials for quantity and
quality
(b) Storage in appropriate location using appropriate storage equipment
(c) Efficient operations and maintenance of services
(d) Retrieval and issue of materials from storage location upon demand
(e) Documentation of transactions and update of records
(f) Physical stock verification and follow-up
(g) Stock accounting systems

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Objective of Store

The objective of store keeping:

1. To procure and maintain the requirements of raw materials, components, parts,
equipment, tools and other materials required for operations and processes and to
store them.
2. To provide maintenance of materials, spare parts and office materials.
3. To store scrap, discarded and obsolete goods.
4. To receive and issue finished products as stock.

Performance Indicators for Efficient Stores Management

I. Operational efficiency
II. Material handling costs within the store
III. Material loss index
IV. Storage space utilization index
V. Service levels or % stockouts
VI. Stores safety and housekeeping index

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Key Managerial Decisions Required in Stores Management

The following decisions are important in the context of stores management:

1. Stores location and layout planning
2. Items location code or store address system
3. Design of storage systems and choice of storage equipment
4. Methods of access/storage – open, closed/dedicated, and random-access storage
5. Issuing policies – item control vs. bulk control and units of issue
6. Physical stock verification and policy for handling of discrepancies
7. Stock accounting methods
8. Automation of storage and retrieval systems
9. Organizational issues in storage and warehousing

Type of Store and Warehouse

Store

Physical Store Functional Store

In physical consideration, the stores are
located at various places and locations are of
different sizes. Depending upon quantity and
type of materials kept in them, their sizes will
be determined.
They are the places where the materials of
particular use are stored and supplied for
further production operation and process.

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Type of Store and Warehouse

Store

Physical Store

It is located at one place and serves the various sub-stores or different plant of the
Central Warehouse
factories.
The work in process inventories (WIP) or semi-finished goods are stored in such
Transit warehouse
places for further processing.
This type of stores are located near the place of manufacturing, so that they can be
Sub stores
immediately used up.
Large construction and fabrication projects needs bulk of materials of building
Storing Site
construction like steel, cement, sand, stones and other fabrication materials.

Departmental stores The organizations are having different departments and production centres.
Large companies which do not manufacture all the products which they sell have
Company Warehouses
their big group stores located at one place as company warehouses.

Type of Store and Warehouse

Store

Functional Store

The materials like pig iron used to make castings, fabrication materials used to
Raw Materials Stores
fabricate the parts are stored in the raw materials stores.
The parts which are not manufactured in the plants but they are required for
Spare Parts Stores
making the products used in assembly line.
Those materials not entering the product but are supporting items in manufacturing such as oils, lubricants,
greases, and detergents etc. are called general supplies and they are separately stored in general stores. General Supplies Stores
Cutting and machining tools like workshop tools, grinding wheels, and files are Stores for Tool Room
stored in tool room stores. Materials
Materials used for packing like, cardboards, wood boards, cartons, and various
Packing Stores
types of containers and other packing materials are stored in this type store.
Receipt stores are those warehouses where the materials are received from vendors Receipt Store and
supplied from the railway stations, airports or docks. Quarantine Store

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Type of Store and Warehouse

Store

Functional Store

The lots of one part produced is more for exam le 500 units and it is required at a
Work-in-Process Store
time in 100 units only so the remaining 400 units are WIP inventory.
The finished products before being sold are kept as stock in the finished products Finished Products Stores
stores. The distribution centres are also acting as finished products stores.
The office materials like files and other stationery items are kept here and they are
Stationery Stores
issued to various departments.
Bonded store is that where the goods on which custom or excise duty has not been
Bonded Stores
paid are kept here.
The perishable materials like vegetables, fruits, meats, chemicals and medicines etc.
Cold Storage
are kept in the cold storages or refrigerated stores.
These sheds or yards are used for storing large materials outside in open places. Open Yards Storages

Stores Location and Layout Planning

There are different models for facility location planning.
• Departmental store location should be optimal for the users within the department.
• Central store location should be optimal for the departmental stores or user points.
• There are two types of single-facility location models which can be used to determine
optimal location of central store:
(a) Location model with rectilinear mode of transportation
(b) Gravity location model

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Stores Layout Planning

• Store layout planning is the internal arrangement of a store.
• Storekeeping efficiency depends on this internal arrangement.
• Store is divided into blocks of storage space and other units.
The stores layout planning must attain the following objectives:
• Minimize material handling efforts and costs within storage area.
• Maximize space utilization of store space.
• Ensure adequacy of storage space and accessibility to the location.
• Minimize retrieval and issue time to the consumer.
• Facilitate safety and security of materials and persons within the store.

Stores Layout Planning

• Provide good working ambience – ventilation, illumination, housekeeping, and cleanliness
(concept of 5 Ss used in TQM can be employed).
• Minimize loss, pilferage, and damage of materials while in store.
• Facilitate ease of physical counting.
• Provide flexibility of arrangement for futuristic expansion/rearrangement.
• Minimize cost of store operations – manpower costs, insurances, premium, perishability,
and controlled conditions for storage space (items requiring air conditioning and those
which are hazardous materials should be separated from others).

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Store Address System

Store Address System

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Design of Storage Systems and Selection of Storage Equipment

• The number and type of storage equipment is an important decision to improve store
efficiency.
• These choices depend upon the volume and nature or configuration of the item to be kept
in store.
The following questions will facilitate the design of storage systems:
1. How much space is required to store items properly?
2. What will be the unit of withdrawals from store?
3. What is the maximum inventory level for an item?
4. Keeping in mind the physical shape, size, weight, etc., what type of storage facility will
be most appropriate?
5. How frequently the item will be withdrawn from stores? FSN analysis will be based on
this data.
6. Which type of material handling equipment will be the best to use?

Design of Storage Systems and Selection of Storage Equipment

Various types of equipment generally used for storage of materials are as
follows:
1. Pallets and Skids – flat 9. Hangers
pallet, box pallet, tray pallet,
pallet racks
2. Bins 10. Buckets
3. Open and closed shelves 11. Tanks ( for liquid storage)
4. Cabinets 12. Cold storage facility
5. Stacking boxes 13. Deep freezers
6. Gravity-fed racks 14. cans/containers/drums
7. Outdoor platforms and 15. Brackets
racks
8. Special storage racks 16. Tote pans

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Storage Methods
• Stores and warehouses should be designed to minimize deterioration and spoilage of items.
• The storage facility should enable FIFO (first-in-first-out) operation for perishable items.
• New items should be stored from one end and withdrawals from the other end to allow FIFO operation.
• Two choices of storage methods are required to be made:
• Open vs. closed storage:
• Open system is common in mass production with continuous and predictable demand of the same material.
• Open system stores material close to its point of use and allows open access to any worker without
authorization.
• Open system is justified for material that is used quickly and not subject to deterioration, obsolescence,
pilferage, theft or weather conditions.
• Closed system requires documentation and authorization for adding and withdrawing material from the store.
• Closed system keeps more effective checks on use and is suitable for items that are high valued, large, or prone
to theft, perishability, etc.

Storage Methods
Dedicated vs. random-access storage:
• Dedicated storage means that each item has a fixed space and location code in the store.
• Dedicated storage is easy to reach and identify, but has low space utilization and
flexibility.
• Random-access storage means that each item can be stored in any available space in the
store.
• Random-access storage has high space utilization and flexibility, but requires
computerized control system and database.
• An appropriate choice of storage system should be made based on the type and size of
items and the situational contingencies.

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Units of Issue: Item Control vs. Bulk Control

• Units of issue can be different from units of receipt and must be clearly defined as the
smallest quantity likely to be issued.
• Inventory control records must be maintained in terms of units of issue and marked on the
stock bin.
• Item control means counting items before issue, which may not be economical for small-
valued items issued in large numbers.
• Bulk control means dispensing items by weight rather than by count, which requires
weight-to-count conversion tables and some tolerance for errors.
• The decision of item vs. bulk control depends on the value, usage, and convenience of the
items.

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