SUBJECT: PRODUCTION AND MATERIAL MANAGEMENT
TOPIC:
WAREHOUSING AND STORES MANAGEMENT Presenter Sr. No. | NAMES | ROLL NO. | 1 | | | 2 | | | 3 | | | 4 | | |

GROUP NO: 07

INTRODUCTION Receiving and storing are important flow control activities in the materials management chain. In industries, materials have to be stock to meet the consumption requirements during the lead time or during extension of lead time due to delays by suppliers or due to unexpected increase in the consumption rate.
WARE HOUSING Ware housing is not the simple act of storing materials, but rather a package of services which enables the smooth flow of materials through the production department without causing stoppage of production due to shortage of materials.
STORE MANAGEMENT Store keeping is a primarily a service function in which the store keeper acts as a custodian of all items carried in the store. Store management should aim at providing the service as efficiently as possible with minimum possible cost. Store keeping may be defined as a function of receiving, storing and issue of raw materials, bought-out parts and components, spare parts, tools, consumables, supplies and stationery items etc. to the user departments.
FUNCTIONS OF STORE MANAGEMENT * To receive raw materials, components, tools, equipments and other items and account for them. * To provide adequate and proper storage and preservation of various kinds of materials. * To meet the demands of the user departments by proper issues and keeping account of items used b user departments. * To highlight accumulation of stocks, discrepancies and abnormal consumption and implement proper control measures. * To ensure good housekeeping to facilitate proper material handling, material preservation, receipt, stocking and issue of materials.
OBJECTIVES OF STORES MANAGEMENT * To facilitate a balanced and smooth flow of raw materials, components, tools and any other items necessary to meet production requirements. * To maintain optimum stock of raw materials to compensate for irregular supplies by the suppliers. * To achieve efficient utilization of storage space. * To reduce usage of materials handling equipments. * To enable flexibility in production schedule.

PROBLEMS DUE TO INEFFICIENT STORE MANAGEMENT * Failure to locate store rooms properly and the inefficient use of available store rooms store rooms space can increase the storage cost. * Excess handling of materials, need for more persons and equipments for materials handling. * Problems in material control and time involved in supplying materials when needed because of improper store room and location and use. * Inventory carrying cost due to deterioration, damage and pilferage of materials and related indirect labor cost.
LOCATION OF STORES The determination of location of stores area will depend upon the need of the plant and will vary from plant to plant. Certain basic factors to be taken into account to determine the best location for the stores are: * Material Classification: Materials of the same classifications may be stored together regardless of differences in size, weight, and destination. Example separate storage areas may be designated for raw materials, purchased parts, supplies, semi-processed parts, finished products, packing materials, inflammable materials, spare parts for maintenance departments etc. * Similarity of Materials: Items of similar size, shape, and weight may be stored together even though they may be classified differently or be required at different production location. According to this approach, all small parts may be stored in one place, bar stocks in another, castings, forgings and bulky items on another place, raw materials such as steel, aluminum, and brass sheets etc, in yet another place. * Point of Use: It is sometimes desirable to locate all materials to be used at each production centre as close as possible to that particular centre. This approach may result in decentralization of stores, creating holding stores for each production division or centre. * Materials Handling Considerations: Materials which require similar handling equipments may be grouped together. For e.g. Materials in the form of liquids may be stored together. Also ,items which are to be frequently handled because of greater frequency of requisition may be placed at more accessible locations then less frequency handled item. * Special Requirements: Some items may be fragile, explosive, extremely valuable or may require special atmospheric conditions for storage. Such materials will have to be stored in locations which provide proper facilities.

STOCK VERIFICATION No matter how diligently a storekeeper performs the custodial job or how carefully a ledger clear maintains records some discrepancy between the actual and book balances of inventory is bound to occur. The system is operated by people do commit mistakes. For this reason, every inventory item should be physically counted and checked against its book balance at least once in a year. The books are subsequently adjusted to match the actual count. Most companies create an’ inventory discrepancy’ account to absorb such discrepancies. This account is eventually closed by the transferring the balance to manufacturing overhead account.
Stock verification can be conducted in of the three ways: 1. Periodic verification. 2. Perpetual or continuous inventory. 3. Low point inventory.
Under low point method, companies take physical inventory when the stock is the lowest, irrespective of the period. Stock taking is naturally irregular. The low point approach minimizes the time required for actual inventory work because of the small quantities of materials involved. However, it has the disadvantage of production and irregular inventory schedule which tends to peak the load for stores personnel. In the continuous inventory approach, at the beginning of each year some firms divide their inventory into 52 equal groups and assign one of them to be physically counted each week. Thus, the physical inventory operation goes on without interrupting production operation or upsetting store room activities. This approach has three advantages. It can be planned and worked into scheduled activities without a shutdown. It can be conducted in an orderly and relaxed manner; these conditions are also conducive to accurate work. Secondly, there is the possibility of detecting and eliminating causes for discrepancies without allowing them to continue throughout the year. Finally, these approach facilities utilization of stores personnel. In many storerooms, withdrawals are heavy early in the day and are much lighter later on. Thus, when the issue clerks busy work slacks off, he will have backlog of inventory work to do. In some companies, separate staff are appointed for the purpose if continuous stock taking. This approach involves extra cost and only very large companies can afford it. In the fixed or periodic inventory is taken once a year, generally coinciding with the financial year. This necessitates shutting down the production operation and organizing a special crew for the inventory job. This approach is ideal for seasonal businesses. It is troublesome because it is a major task which must be accomplished in a short time, interrupting production operation.