Storage and Warehousing

This chapter is concerned with physical custody of materials after these are procured till they are issued for consumption. It looks routine if managed well, otherwise it can be a very critical function in the entire materials management chain. The performance indicators of storage and warehousing functions are average time taken to supply the material after getting the indent, % indents pending at the end of the day, % material wasted in store, space utilization of the storage facility, handling cost within store, quality of housekeeping, and safety/security of goods and personnel in store. Choice of storage equipment must depend upon the nature and volume of the stock to be kept. Store address system or location code will enable to reduce retrieval time to improve operational efficiency of store. FIFO is a preferred policy for physical issue, whereas LIFO could be a preferred basis for stores accounting under inflationary environment. Physical stock verification policy should depend on the situation. Automated storage and retrieval (AS/R) systems offer opportunity to reduce space required for storage, reduce manpower requirements, and improve store’s operational efficiency but are very capital intensive. For manual operations, dedicated storage space is preferred. For big-size organizations, a two-level storage structure – a central store supplying to various departmental stores located closer to point of consumption – may be desirable.