2. Storage is the function of receiving, storing and issuing materials.
Stores ensures ready accessibility of major materials there-by efficient
service to users.
A professionally managed Stores 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.
15. A satisfactory storage system compromises between the use of
space and the use of time.
There are three basic ways of locating stock:
Fixed Location;
Random Location and
Zoned Location
16. Stock verification can be conducted in one of the three ways:
1. Periodic verification or fixed annual inventory.
2. Perpetual or continuous inventory.
3. Low point inventory.
Verification of stock when the stock is lowest is known as low point
inventory verification.
In the continuous inventory approach, at the beginning of each year
the entire inventory is divided into 52 equal groups and each group
will be physically counted each week.
In the fixed or periodic inventory method, inventory is checked
physically every year.
17. Standardization, Codification, Simplification
Advantages Of Classification & codification:
1. Correct identification of each & every item by systematic grouping of similar
items. (items kept in one place and coded with proper numbers).
2. Reduction in sizes and varieties. The usage of long description is simplified and
possible confusion avoided.
3. Duplication of stocks & Less confusion . Avoids duplication of the stocks of the
same item being held under different names, Descriptions, Brand names ,Part
numbers and different stores.
4. Standardization of Materials greatly improves and helps to finding substitutes.
5. Simpler Storage methods, Accurate & proper maintaining of records, Easy
Inventory & Accounts control Procedures etc. can be achieved
18. Principles Of Classification
Effective Classification & codification systems are based on UCUS:
1. Basis Of Classification to be made uniform (Uniformity)
2. Classification to cover full range of Items (comprehensiveness)
3. Unique one code number to each item (Uniqueness)
4. Ease to adapt by each & every one (simplicity)
19. Methods Of Classification & Codification
• Raw Material Stores
• Work-in-Process Stores
• Finished Stores
• Consumable Stores
• Tools Stores
• Packing Materials Stores
• Spare parts stores
• Small Parts Stores
• Heavy Parts stores
• Hardware Stores
• Motors
• CKD (Completely Knocked down items)
20. Classification of stores
Store can be of temporary nature which means that it has a limited life. Store can also
be of permanent nature. Stores are classified basically in the following broad categories.
•Functional stores – Functional stores are named based on the function of the materials
stored. Examples are fuels store, chemicals store, tools store, raw materials store, spare
parts store, equipment store, refractories store, electric store, explosives store, and
finished goods store etc.
•Physical stores – Physically stores can be centralized stores or decentralized stores.
These stores are named based on the size and location of the store. Examples are
central store, sub store, department store, site store, transit stores, receipt
store, intermediate store, open yard store, and covered store etc.
•Stores are also classified by naming them after the departments to which they serve.
Examples are construction stores, operation stores, rolling mill stores, blast furnace
stores, and steel melting shop stores etc.
•Stores are sometimes classified based on the nature of materials stored in them.
Examples are general store, bonded store, perishable store, inflammable store, salvage
store, reject store, and quarantine store etc.
