Priya...Few theorotical parts on Stores Mangement
Stores Management
Stores management is an integral part of the overall function of materials management. Though today the concepts like JIT have cast aspersions about the importance of Stores Function. But in India it is a long journey and it will still take some time for all of these philosophies to get ingrained in Indian Corporate Culture.
The terms Stores, Storehouse, or warehouse all of them refer to a building or room or place where materials are kept.
An organization usually has different types of stores like which it refers by different names such as Raw Materials Store, Processed or Semi-Finishing Materials Store, Finished Goods Store, Yard Store and so on. Such stores range from ordinary ones with shelves and bins to cold or dehumidified storage’s, huge silos for storage of food grains or bonded stores for keeping goods on which customs and excise duties have not been paid. Storage is an essential and most vital part of the economic cycle and Storage Management is a specialized function, which can contribute significantly to the overall efficiency and effectiveness of the materials function.
The Job
The task of storekeeping relates to safe custody and preservation of the materials stocked, to their receipts, issue and accounting. The objective is to efficiently and economically provide the right materials at the time when it is required and in the condition in which it is required.
The basic job of the Stores Manager hence is to receive the goods and act as a caretaker of the materials and issue them as and when Production demands it. Needless to say storekeeping activity does not add any value to the product. In fact it only adds to the cost. The organization has to spend money on space ie. expenditure on land, building and roads, equipment, machinery and other facilities provided such as electricity, people ie salaries and wages, insurance, maintenance costs, stationary, communication expenses and the cost to maintain the inventory etc. All of these get added to the organisational overheads and finally get reflected in the costing of the finished product. However, it is an essential function in any manufacturing or marketing organization. This basic reason has propelled the evolution of philosophies such as JIT, JIT II etc.
The Process
Efficiency in Stores starts with planning the need for materials and this presupposes that the need itself has been forecast with a considerable degree of accuracy. The forecast also must be subjected to periodic review. The art of storekeeping is largely that of optimising the use of resources to meet actual needs in an efficient manner. Stock taking is an integral part of Stores function.
Efficiency of Stores function is measured by the number of times the stocks have turned over. That is how much time material spends in the Warehouse. The lesser time it spends the better it is. As money is a scarce resource and once it is converted into materials, it is useful only when the materials have reconverted back into money. This is the essence of stock turnover. It is an indication of agility of organisations. Agility has become a very important requirement in Organisations today. Customer demands have become very aggressive and organisations need to react, respond and immediately satisfy them in order to remain in customer’s goodbooks and get repeat orders. Agility and sprightliness of Stores Function can contribute substantially in making the whole organization flexible.
Stores is a very broad word that indicates a wide variety of materials stored such as chemical, metals, liquids, gases, spare parts, equipment, or finished goods, ranging from engineering components to drugs and pharmaceuticals. Each of these items will require a specific type of storage and their handling and preservation methods will vary accordingly. There is a high degree of specialisation required to store and handle these products and in many cases special storage licenses need to be obtained from the Government, e.g., the storage of petroleum products or explosive products. It is hence mandatory for Stores personnel to understand thoroughly all of these requirements and implications The understanding of these principles is most important in the efficient practice of the art of storekeeping.
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