8.

Materials receipt and

Warehousing
Presentation by:
Sanket More
Nikit Choudhary
Niraj Rai
e) Storing practices and identification
of materials.
f) Centralization and Decentralization
of stores.
g) Preservation of materials
h) Issue control.
 Storage System
Any Stores system starts with planning the
need for materials. It is assumed here 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

optimizing the use of resources to meet actual
needs in an efficient manner.
 Stores:
• 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 specialization 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.
 Services in storage
The services rendered by Stores can be arranged into four broad
activities:
• To make available a balanced and uninterrupted flow of raw
materials, components, tools, equipment and any other material
needed to meet operational requirements

• To provide maintenance materials, spare parts and general stores as

requirements

• To receive and issue finished products

• To accept and store scrap and other discarded material as they arise

• To effectively dispose of the unwanted materials

Responsibilities of Store Personnel:
In the face of a challenging situation faced by
stores personnel, one of the main
responsibilities for them is to :
• Properly account for every item received in the
stores
• Preserve the material till its issue from stores
and
• Issue the material when demanded
 To have effective control and proper
accounting of materials , a professionally
managed Stores has the following main
functions :
• Receiving
• Custody
• Inventory Control
• Disposal
F) Centralized and Decentralized
Stores
 Centralized Stores

A centralized store is that store which receives

materials for and issues them to all
departments, divisions and production floors of
the company. Such a store is only one in the
company which receives materials for and issues
to all who need them. The materials required for
all the departments and branches are stored and
issued by only one store.
 Advantages Of Centralized Stores
• A better supervision of store is possible because the
store is located under a single supervision.
• A better layout of store and its control are possible.
• Less space is occupied.
• Investment in stock is minimized.
• It is economical for storing materials.
• Safety of materials is possible according to the nature
of materials.
• Trained and specialized persons can be appointed.
• Wastage of materials can be minimized.
 Disadvantages Of Centralized Stores
• Delay in sending materials to the departments
and branches.
• Increase in material handling cost.
• Greater risk of loss by fire.
• Not suitable for a large company
 Meaning Of Decentralized Stores
A decentralized store is that type of store which
receives materials for and issues them to only one
department and not to the whole company.
The decentralized store may be in many numbers in the
company, as each department has its own such store.
Purchasing and handling of materials are undertaken by
each and every department separately. If the volume of
material activities is large, this type of store is suitable
because each and every branch has their own store for
facilitating smooth operations of their production
activities.
 Advantages Of Decentralized Stores
• Controlling a and storing function can be
accomplished easily.
• Delay in material handling will be eliminated.
• Minimizes the chances of loss by fire.
• No need of internal transportation costs.
• Specific needs of individual departments can
be easily fulfilled.
• Saving in material handling cost.
Disadvantages Of Decentralized Stores

• Higher cost of supervision.

• More space is required for individual
departments.
• Higher amount of investment is required
• More time for stock taking and taking.
• Higher cost of staff and stationary.
• Improved technique is less possible for
controlling of materials.
 G) Preservation of materials
Preservation is an important part of the
storekeeping function. When materials remain
idle in the store these materials should be taken
care of and looked after properly. Otherwise
these materials may get perished due to natural
chemical reaction like rusting by moisture,
melting by heat etc and also may get affected
by insets, rats etc.
 Contd.
• Materials should be stocked free from ground. No material should be stocked on the
floor as it may be affected by dampness, white ants etc.
• Materials should be stocked in the appropriate place according to the nature of the
materials.
Eg :
– Stationery, Electrical, Civil Engineering, Cleaning and Similar items may be
stocked in the steel racks.
– Medicine items may be stocked in the fridge.
– Perishable items may be stored in the cold rooms.
– Explosive, film, fuse items may be stored in the AC room.
– Attractive items may be stored in shelves under lock and keys.
• Daily and periodical cleaning should be carried out.
• Daily and periodical verification of stock should be carried out to ensue correctness
of stock.
• Proper method of handling should be followed to avoid damages to the materials.
• Preservation materials should be applied to protect the items.
• Hazardous materials should be segregated and stocked in a separate store house
away from other store houses.
• Safety precautions should be taken and safety appliances should be provided.
H) Issue and Control
 Issuing of Materials
• Materials are kept in stores so that the storekeeper may
issue them whenever the production department requires
these. A storekeeper cannot issue materials unless a
properly authorized material requisition is presented to
him.

• Material Requisition Form

A material requisition is the most important document of an
authority to the storekeeper to issue the materials. It is a
normal request written in a paper from production
department to store department. It is signed by the
authorized person so that there may be no wrong drawl of
materials.
 Perpetual Inventory System
• “A system of records maintain by the
controlling department, which reflects the
physical movement of stock and their current
balance” Chartered Institute of
Management Accountants (CIMA), London
 The main advantages of Perpetual
Inventory System
• It provides an opportunity to verify the physical stock of materials
daily or at regular intervals without dislocating production.
• It helps in rapid stock taking which, in turn, helps in the preparation
of interim accounts.
• A moral check on the store staff to maintain proper stock records.
• The investment in materials and supplies may be kept at the lowest
point.
• It is not necessary to stop production so as to carry out a complete
physical stocktaking.
• Deterioration, obsolescence etc, can be avoided.
• Discrepancies and errors can be quickly discovered and remedial
action can be taken.
• Timely replenishment of stock is facilitated by means of reordering
the level specified in the bin card.