In the process of material control, after any purchased materials are received and checked, the next step is the storage of materials, also known as storekeeping.
Store keeping is the task of maintaining safe custody of all items of supplies, raw materials, finished parts, purchased parts, and other items. These items are held in a storeroom for which a storekeeper acts as a trustee. As such, storekeeping can be defined as process of receiving and distributing stores or supplies.
According to Alford and Beatty, “storekeeping is that aspect of material control concerned with the physical storage of goods.”
In the words of Wheldon, “storekeeping is the physical storage of materials carried into the store-room in a scientific and systematic manner with a view to (i) saving them from all kinds of damages and losses, and (ii) exercising overall control over their movement.”
In short, storekeeping refers to the art of preserving raw materials, work-in-progress, and finished parts in the stores in the best possible manner.
Generally, in small businesses, storekeeping is a minor task. However, it is always worth remembering that careless handling of materials, material pilferage, and deterioration of materials can lead to reduced profits and even losses.
Therefore, to ensure maximum efficiency, it is important to maintain a well-equipped storekeeping department.
Spriegel and Lansburgh rightly remarked: “Poor control of materials is frequently accompanied by poor store-room administration in a way that may easily throw out of balance any operation programs which have been adopted.”
Objectives of Store keeping
An efficient system of storekeeping has the following objectives:
- To ensure uninterrupted supply of materials and stores without delay to various production and service departments of the organization.
- To prevent over-stocking and under-stocking of materials.
- To check all materials in terms of quality and quantity.
- To minimize storage costs.
- To ensure effective and continuous control over materials.
- To ensure optimal utilization of available storage space and workers engaged in storekeeping processes.
- To protect materials from loss and wastage due to defective storage.
- To identify and locate materials in storerooms without delay.
- To protect and safeguard material items from pilferage, theft, fire, and others.
- To develop a system that provides complete and up-to-date information about all stored items.
Store Keeping Functions
The main functions of storekeeping are performed in an organization’s Stores Department. They include:
- Issuing purchase requisitions when material is required.
- Receiving purchased stores from the Receiving Department and verifying that every lot of stores is supported by an indent, a purchase order, and an inspection note.
- Preparing Goods Received Note in accordance with the different stores lots received.
- Ensuring that all the Goods Received Notes are regularly posted to the Bin Card.
- Placing and arranging stores received in suitable places and adhering to the golden principle of storekeeping: “A place for everything in its place.”
- Minimizing storage, handling, and maintaining costs by preserving and handling materials in the most economical and efficient manner.
- Issuing stores to various business departments and ensuring that all issues are properly authenticated and accounted for.
- Ensuring adherence to issuing procedures and organizational systems and guidelines.
- Periodically reviewing the inventory by initiating inventory control systems (e.g., perpetual inventory control system and ABC system of inventory control).
- Disclosing fullest and up-to-date information about the availability of stores whenever required. This depends on maintaining proper stores records with the help of Bin Cards and a Stores Ledger.
- Safeguarding materials from theft, pilferage, fire, and others.
- Supervising and coordinating the duties of different staff working under the direction of the storekeeper.
- Preventing the entry of unauthorized persons in the stores.
- Maintaining proper stock levels, which are fixed in respect of every item of stores, and replenishing them when necessary.
Store Keeper’s Duties
In a manufacturing setting, stores or materials represent an equivalent amount of cash. For this reason, there should be a well thought out system of storekeeping.
The storekeeping system should be designed to ensure the safe custody of materials, easy access to items, economic usage of storage space, regular and efficient flow of materials, maintenance of reliable stores records, and an efficient assessment of stock position.
For efficient storekeeping, a separate Stores Department under the direction of a storekeeper is set up. The storekeeper is an individual of broad experience in the area of stores routines.
To carry out their duties, the storekeeper receives assistance from several staff members. The storekeeper is responsible for the safe performance of his duties.
In addition, the storekeeper’s main duties and responsibilities are:
- To issue requisitions on the purchase department to ensure materials are purchased in a timely way.
- To accept into stores any materials received from suppliers or returned by the production department.
- To check in all materials in terms of quality and quantity.
- To hold all materials in a safe and convenient manner in appropriate bins and containers.
- To issue materials against proper authorization.
- To maintain records of receipts, issues and balance of materials.
- To watch levels of stock and replenish materials when necessary.
- To prevent the entry of unauthorized persons into the stores.
- To advise management on the day-to-day affairs of the stores department.
- To dispose of scrap or obsolete materials.
Location of Stores
Here, location refers to the site for a particular store. The location of stores should be carefully planned.
An important factor to consider when establishing a store setup is the question of where to locate it for an optimal effect.
It is crucial to set up stores in a convenient and safe place near to the Receiving Department. It should also be accessible from all parts of the factory and be free from the risk of fire, theft, and other hazards.
The general principle used to determine the location of a Stores Department is to minimize the total cost (i.e., in terms of kg/km) of transporting materials.
Determinants of the Location of Stores
The main factors that determine the location of stores in a manufacturing operation are outlined as follows:
1. Minimization of Material Handling Efforts: The raw material store should be near the production shops, and the finished goods and packing materials stores should be near the assembly shop. The stores should be easily accessible by transport.
2. Nature of the Materials: The nature of the materials to be stored influences location. Weather-resistant materials can be stored outdoors, while materials such as cement and plaster must not only be protected from the weather but also be stored in a dry place.
3. Quantity, Weight, etc., of Materials: The quantity of each of the goods to be stored must be considered to choose the location. When the quantities are known, adequate provision may be made for immediate and future storage needs.
4. Flow of Materials: The location of stores should be convenient, enabling the steady and regular flow of store items without obstruction.
5. Free from Risk of Loss: Stores must be set up in a safe location that is free from the risk of loss due to fire, theft, moisture, and other hazards.
6. Flexibility: The location of stores must leave open the potential for future expansion.
Layout of Stores
The layout of stores refers to the physical arrangement of storage facilities or the internal arrangement or placement of materials inside the stores.
Layout of stores aims at the effective utilization of available space for storage of materials. It seeks to make the receipt and issue of stores convenient, improve the appearance of the stores, and minimize the chance of damage, wastage, pilferage, and accidents.
When designing the layout of stores, another important aim is to reduce the operating cost of storage. The layout of stores should be chosen based on the class and quantity of the materials to be stored, as well as the general nature of the business.
Different materials should be separately stored, paying due attention to the viewpoints of space economy, effective supervision, minimum wastage, and convenience. The materials should be kept in bins, racks, shelves, drawers, drums, packages, and containers.
Factors to Consider to Decide Stores Layout
1. Similarity: Items of a similar nature should be stored in one place for the sake of convenience and easy identification.
2. Popularity: The turnover of each item should be considered to enable fast-moving items to be stored near the point of issue/usage.
3. Size of Item: Items that are large or bulky in nature should be stored near the point of use.
4. Nature of Materials: The nature of the materials to be stored is important in determining the layout of stores. Hazardous, sensitive, and perishable goods should be stored separately in safe places.
5. Physical Movement of Materials: Strictly adhere to the principle of ‘first in, first out’ in the matter of physical movement of materials.
6. Physical Facilities: To create an efficient layout, it is important to consider physical facilities such as lighting arrangements, ventilation, wall paint, availability of cranes, and other handling equipment.