To further strengthen material control, purchase control must be matched by equally effective stores control to avoid losses from misappropriation, damage, deteriorations evaporation and carelessness. The investment in materials constitutes a major portion of current assets, so there should
be a separate Stores Department to exercise stores control.
It is an amazing fact that in many industrial organisations while a most rigid control over cash exists, little or no attention is paid to materials. It is not desirable. Materials to become cash on the sale of the finished products represent an equivalent amount of cash, so it is desirable to have an
efficient and well-equipped stores department to exercise an
effective material control,
Stores Department Location And
Layout The location of the Stores Department should be carefully planned out and it should be housed in a position which is very near to the Receiving Department so that transportation charges are at a minimum. At the same time,
there should be an easy access to all other departments of the factory, roads, railway siding and wharf so that the minimum of expense is incurred in unloading. It is very important that bulky and heavy stores should be stored nearest to the department requiring them in order to minimise
the labour and transportation charges. In this way, planned location of the Stores Department will avoid delay in the movement of materials to the departments in which these are needed.
The layout of the Stores Department needs careful consideration. The store should be divided into racks which should be further sub-divided into small spaces. All these spaces are known as Bins and for one item of material. one bin is allotted. Bin is not necessarily a space on a rack but it
really means any place where material is kept. Allbins should be serially numbered. For example, for bulky and heavy material, a big hall can be treated as one bin.
Special attention must be paid to storage of materials which are liable to leakage or evaporation or deterioration due to atmospheric conditions. The building of the Stores Department should be properly constructed from the point of view of avoiding loss due to damage and pilferage. Moreover,all the materials needed in a department should be kept side by side.