Stores ….Where materials are managed
The very essence of Materials Management gathers its relevance from Stores, a place that keeps the materials in a way that the materials are well accounted for and are maintained safe.
A typical Store has a process and a space within, to receive the incoming materials (Receiving Bay), keep them for as long as they are required for use (Custody) and then to move them out of stores for use (Issue). In a manufacturing firm this process forms a cycle to maintain and run the activities of Stores.
The basic responsibilities of stores are to act as custodian and controlling agent for parts, supplies, and materials, and to provide service to users of those goods. Well-designed systems provide flexibility to absorb the shock demand variation, and enable purchasing to plan ahead, practice forward buying, and so forth.
Types of Stores
- Closed stores – Closed systems are utilized when close control and accounting for inventories are desirable. In such cases, storage areas are kept locked and entry is limited to stores employees or to others only on an authorized basis. Goods enter inventory through a formal receiving process and leave through an authorized requisition or bill of materials. Closed systems typically include industrial or business stores operations, and involve repair parts, consumables, tools, and materials or components for assembly where ongoing control and accuracy is essential
- Open stores – There are instances where the cost of closely controlling inventories outweighs expected losses in an uncontrolled environment. In such cases, inventory storage areas may be left open or kept close to the point of use for efficient user access. Such inventories are available for use as needed, with emphasis on expediting production, or operations rather than on security.
- Random Stores: – In random access systems, goods are stored without regard for commodity groupings. Instead, goods are stored in the next or nearest available space of suitable size. However, it is good planning to select from available storage spaces with consideration for the anticipated frequency of issue. Locating items in random access storage usually requires a computerized system. Random access systems tend to be used in conjunction with a closed stores system
- Automated warehouse – A large variety of automatic storage and retrieval systems (ASRS) are being used today. ASRS systems have the capability of bringing goods from storage or placing goods into storage upon computer entry of the item identification and/or storage location. Such systems may range in size from small rooms to whole warehouses, and may handle items ranging from small parts in tote pans to large materials on pallets.
- Contractor operated system, Or integrated supplier systems – Where business volume is sufficiently large, suppliers may operate a firm’s Supply or inventory storage facility using supplier personnel, under contract with the using organization. Depending on the agreement, a contractor may either acquire on-site inventories or just manage them.
In some cases, supply contractors have branches built next door to industrial plants, for the sole purpose of supplying all needs of the plant. In some cases, the two facilities are separated by a common wall and supplies are issued through an opening in the wall. This is an emerging trend for MRO and office supply goods.
Stores Management
A professionally managed Store has a process and a space within, to receive the incoming materials (Receiving Bay), keep them for as long as they are not required for use (Custody) and then to move them out of stores for use (Issue). In a manufacturing firm this process forms a cycle to maintain and run the activities of Stores. The basic responsibilities of stores are to act as custodian and controlling agent for parts, supplies, and materials, and to provide service seers of those goods.
- Of incoming consignments (goods)
- Safe keeping of goods (Custody)
- Disposal of undesirable goods
- Inventory Management
- Housekeeping and record maintenance
It all starts with a suitable lay out design of stores. Depending upon the nature of items used for processing by the organization the lay out and type of stores are selected. For example, a process that requires use of raw materials, not costly enough, an open and nearby stores with truck / rail inside movement possibility can be adequate. Similarly, for storing costly material, a closed and restricted type of stores shall be needed. However, irrespective of the type and lay out, any Stores would have, as its starting activity, receiving and accounting of the incoming goods. This part of Stores is known as.
Receiving Bay
Once the material has been received and cleared through inspection and accepted for use, it needs safe custody till it’s actually used. It calls for a separate physical storage space, open or closed, as per need. It maintains all documents that are able to trace an item, show all its details and preserve it up to its shelf life in the manner prescribed or till it is issued for use. This part of Stores is called Custody. Thus the role of Custody is to receive and preserve the material and then to issue it to the user, as and when needed.
A stage comes when the material is needed for use. Stores thus release the material from its custody to the user department and the process is called ‘issue of goods. It might also happen that after partial use, some materials having useable value in future are returned to the stores and thus they also become part.
In the long drawn process of preserving the materials till its use, some materials might get obsolete and unserviceable and may require removal from stores, in order to clear space for other incoming goods. This activity is known as Disposal of goods for which auction etc is done.
Since the material has a cost, the organisation would definitely like to incur optimum cost on this account and thus there is a need to manage the materials within stores such that the total cost of maintaining materials remains optimum. The materials, lying unused but have future economic value are said to form inventory which needs professional handling. Inventory control / management thus is a vitally important aspect of any stores function. One of the basic functions of stores is to account for every material received in Stores by maintaining proper records of all the incoming, stored and outgoing materials so that proper accounting and audit trail is maintained. Hence, record keeping is a vital function of stores. Of course, it also goes along the various activities and with development in the information technology domain, the record keeping in stores too is through electronic medium making the whole process smooth and efficient.
Any Stores as such is a physical entity which deals with material receipt, preservation and issue. Material handling therefore is another vital function. Just as Lay out of a Stores is designed considering the nature of material Stores has to handle, material movement equipment and implements also are important. Within a typical manufacturing organisation, its Stores is seen having Forklifts, Over head Cranes, Trolleys etc inside the Stores and trucks, Dumpers and Railway wagons as outside Stores equipment to handle materials.
