Location Approaches to stores

The problem of the materials inside the store room is tackled with the help of the following three approaches:

(1) Fixed location; (2) Random location; and (3) Zoned location.

Fixed location: Under this approach, a specific fixed place is assigned to each item of the materials. The allocation of the space is made on any of the following basis:

1) On the basis of supplier
2) On the basis of similarity of the item
3) On the basis of the joint issue of the items
4) On the basis of the size and frequency of the use.

The last is more efficient and economical. Under this approach, the fast moving items are stored nearest the point of issue, and the slow moves in the remote areas.

Random location: Under this approach, the materials are stored at any vacant place available in the store room. This approach is workable where the store function is operated by one or two persons and the storing is required for only few items. The location is memorized by he store keeper. This is the most unscientific method with its many drawbacks.

Zoned location: This approach divides the total storage space into different zones. Popularly there can be three zones – (1) for bulk stock, (2) for reserve stock and (3) indirect materials like spares and consumable stores.

Zones can be devised on certain other basis also like, liquid materials, metal bars, inflammable materials costly materials, dangerous materials etc. zone approach attempts to avail the maximum benefits out of the available space and other storing facilities.

Location coding: As the materials’ codification helps in identifying and describing various items of the materials, similarly the location coding also helps in locating the specific material item min stores area. Location coding is desirable especially when large number of items are stocked in big godowns located at different places. The same principles of code classification are followed while constructing the location code. The location is identified in terms of number of warehouse (if more godowns are maintained) row, column, racks, shelf, bin etc.

Storing of materials:

It is commonly observed that a store room is a place for everything and everything at its place. As we have noted that there exists a time gap between the point of receiving and the point of the issue of materials, it becomes inevitable to store the materials. The materials are stored in the store room and the store space may be in the form of constructed godown, temporary structures or even open yards. Various types of stores equipment such as pallets, skids, shelves, bins, boxes, drums, tanks, racks are used for the purpose of economic use of the storage space and efficient handling of the materials. The materials are stored till they are requisitioned by the production departments or the specific jobs. The stored materials are issued to the respective production department or job against the authorized materials requisition.

The stored materials are pending for issue. They should be preserved till they are issued. The materials represent the money value, so they should be safeguarded against fire, deterioration of quality, mixing, evaporation, theft, pilferage etc. Proper and adequate storage facilities should be provided for all types of materials according to their specific requirements.

The materials should be physically verified periodically with the stores records, the storage.

Space should be cleaned regularly, the storage facilities should be checked frequently and the entry to the storage area should be restricted to the authorized persons only.

Record keeping of Materials:

Materials represent the money value. It is nothing but the application of financial resources and hence their proper records as regards the quantity as well as value should be maintained properly and efficiently. Proper record keeping becomes inevitable even for accounting and costing purposes. Up to date stores records help in determining the quantity of respective material items on particular point of time which provides the guideline for the fresh purchase or disposal of the materials, the valuation of stock on any particular point of time representing the asset value locked up in stores items and provides the basis for charging the various production departments or jobs who have received the material from the stores room against materials requisition.

The store records can broadly be classified into two:

(1) The bin card (2) the stores ledger