To satisfy the customer/consumer/user, it is essential for the stores function to systematize its working.
The factors that have to be considered while designing a storage system are the type of material, volume of transaction, physical facilities, receipt, issue, documentation, flow of materials, and the warehousing manual.
Raw material stores
Proper control of raw material is one of the major factors that influence the profitability of a company.
A stock out in the raw material will reflect by an idle manufacturing line.
External factors in the supply such as availability, lead-time, seasonality, staggered deliveries, and credit conditions all combine to influence the stocking of raw material. Transactions of raw materials need tight control to affect an uninterrupted supply to production lines.
Packaging material and consumables
Generally, the consumable and packaging materials do not cause any supply problems, but occasionally some of them can become scares. The general characteristic of these items are voluminous. Depending on the demand and availability of their storage space, the stocking policy controlled. They require protecting from moisture and excess heat, their aesthetic character is most important in view of the marketability.
Machinery spares
Machinery spares pattern of consumption is rather unpredictable. The obsolete inventory in most cases comprises only the spare parts.
A proper coordination, planning, procurement, issue, monitoring, and control can give better results. Regular collection, collation and analysis of consumption data reduce the problem of a stock out.
The damage due to non-availability of a part is several times more than the cost of the part itself; leading to hoarding of machinery spares stock.
A collaborative approach between purchase, stores and engineering departments will save a lot of money in this area.
Finished goods
The input to the stock is as per the production schedule, while the output depends on market conditions in a consumer-oriented industry. A slack market leads to stockpiling and a buoyant market leads to scarcities. Shelf life is an important consideration. Storage space should be adequate to meet these extreme conditions. The system of control should be oriented towards coordination not only within an organization but also with the competition and consumer profile.
Finished goods to be as near to the consumer as possible, in order to reduce transportation time, cost, double handling, etc. Periodic meetings with the users help identify problem areas and increase the service facility of stores. The guiding factor in all cases must be the cost of capital and benefits arising there from.