Definition of terms:

Management of storage facilities:

Analysing requirement with regard to storage facilities:

The management of storage facilities is an essential task of the stores department. For efficiency of operations a storage facility requires the following:

  • Space: should be enough to accommodate large quantities of inventory
  • Equipment: should have adequate storage equipment
  • Handling: Handling equipment should be adequate and appropriate
  • Power: There should be adequate and continuous source of power to facilitate smooth operations.
  • Sanitation: There should be adequate sanitation for proper hygiene
  • Ventilation: Store house should be properly ventilated
  • Drainage: There should be proper drainage to prevent dampness and wetness
  • Special facilities: Like cold storage, strong room etc
  • Floors: Carries the weight of the stock held and provides surface for operation of wheeled vehicles. It must be strong with a smooth hard finish level for items.
  • Receipt and discharge docks
  • Lighting: Natural lights should be utilised as possible
  • Fire risk: To prevent the occurrence of fire, construction with timber materials or other inflammable components should be avoided.
  • Ancillary services: They should not be overlooked and should be sited in appropriate locations. They include boiler room, electricity sub-station, garage fuel pump depot, first aid centre etc.

 Identifying types of commodities to be stored and their characteristics with regard to storage and handling needs:

  • Perishables- Milk, fish, pork etc
  • Fragile- Glass, electronics
  • Hazardous-Gas, acids, chemicals etc
  • Durable- Generators
  • Bulky goods-Industrial equipment
  • Liquids-Petroleum etc
  • Solids-Bars
  • Granular-Grains, cereals, nuts etc

Characteristics with regard to storage and handling:

  • Perishables:
  • Stored in cool and refrigerated places
  • Should be handled with care in small batches
  • Limited exposure to windy and sunny conditions
  • Requires to be protected from exposure to contaminants


  • Fragile:
  • Should be handled with care/without too much shocks
  • Storage under cushioning to avoid shock
  • Minimum stacking
  • Storage should be close to the entrance for minimum handling


  • Hazardous:
  • Storage under light conditions (Enclosures).
  • Should be away from predisposing conditions
  • Should be away from other goods to reduce risk of hazards


  • Durables:
  • Require large storage space
  • Stacking can go up to high as required
  • Can be kept in shelves
  • Handling can be done with manual or mechanised systems


  • Bulky goods:
  • Require large storage space
  • Require one level/no stacking
  • Handling-special due to irregular shape
  • Handling equipment-heavy duty due to weight
  • Storage under segregated or open storage spaces.
  • Rigid packaging to allow stacking and handling


  • Rustrous/Ferrous goods:
  • Need to be stored away from moisture/humidity etc
  • Coating can be used during storage to minimise rusting
  • Should be stored away from ground
  • Water proof should be used


  • Liquids:
  • Require containers to contain the liquid
  • Special storage equipment to prevent spillage
  • If packaged observe stacking requirements
  • Handling with special equipment
  • For consumable liquids-observe sanitation e.g. milk.


  • Solids:
  • Require storage on containers, shelves bins etc
  • Need to be packaged


  • Granular goods:
  • Storage at ideal conditions e.g. store in a cool and dry place
  • Can be packaged or exposed e.g. bags or silos
  • Handling only when packaged, otherwise require special equipment


Costing regulations:

Stores accounts are the basic requirement for material costing. They do this in two ways ie:

  • Provide prices by means of which the cost of any item can be calculated
  • Provide comparison between total value of issue recorded and the value of material charges to various jobs.

Materials cost comprise of the following elements:

  • Transport charges
  • Insurance
  • Custom duty
  • Trade discount
  • Quantity discount
  • Cash discount

Stores location systems:

Refers to the way items are located in the store house. The following methods are used:

  • Numbering of locations
  • Fixed location systems
  • Random location systems

Numbering: The store house is divided into sections each given a letter or number. Each stack is given a number from one end. Each bay of shelving or racking forming a stack is identified. Each bin is given a number e.g. A: 24.3.13.

Fixed: This is the traditional idea of a placing for items in a distinct place. Storage for each item is more or less static. Its advantage is that it is consistent and therefore stores personnel can easily recognise where items are. Its also easier to find items in the store since similar items are stored in a similar area.  Its weaknesses include:

  • Spare storage space/capacity is needed just in case major relocations of stock are to be carried out.
  • Doesn’t consider handle ability and store ability characteristics of each item and this may lead to lack of sequence
  • Exceptions should be made in case of popularity storage and this is out of sequence.

Random: Is common where stores are fast moving storage space is scarce and expensive. Its a systematic and very highly organised approach to stock placement using computer technology. Advantages of random method entail: maximum utilization of available storage space, Its suitable for fast moving items which are not bulk, efficient stores operations etc. disadvantages are: there are major differences in sizes shapes and weight of items, requires computer system for its operation which can fail.

Single level structures and multi-level structures:

Single level structure entails a complex construction of one entity which facilitates storage of goods. Multi-level structures on the other hand entail complex construction of more than one storage facilities. In both level structures the arrangement and interrelationship of parts in construction should be laid down well to ensure a high degree of fitness.

Methods of stores layout to optimise the use of space and minimise picking costs:

There are five objectives of a good layout. These are:

  • Straight-line flow of activity through the storage areas with minimum backtracking
  • Minimum handling and transportation of materials
  • Minimum travel and waste motion for personnel
  • Efficient use of space
  • Provision for flexibility and expansion of layout


The main criteria used in laying out most stores are size, shape and type of material to be stored.


Methods of stores layout:

  • Inverted T warehouse flow: In regard to this layout:
  • Goods in and goods out activities are on the same side of the building
  • Shape allows the use of high, medium and low usage areas to minimise materials handling by locating high and low usage areas respectively nearest to and furthest from the goods received and goods outwards areas, thus minimising materials handling for high usage items


  • Better utilisation of receiving and issue areas and the associated mechanical handling equipment
  • The total area required is less than where there are separate loading and unloading areas
  • Facility to extend the building (subject to site constraints) on one or more of three sides
  • Unified bay operations provide for better security control and easier surveillance


The main disadvantage is that the centre aisle may become congested in high throughput situations

  • Cross flow warehouse flow: The flow in this type of layout is a one way system with an ‘in-feed’ aisle and a separate ‘out-flow’ from the other end of the racks. Front entry and dispatches uses a common yard area and the layout retains the benefits from the integration of bulk and picking stocks, but if bulk stocks are a large proportion of total stock this may not be practical.
  • Corner warehouse flow: In the corner warehouse flow, inward and outward flows are on the adjacent but different sides of the building. This layout helps to reduce congestion of aisles in times of high throughput. The disadvantages are that expansion is possible only on the two sides without doors. As the activities in the yard and within the store are not visible from a single vantage point, there are potential problems in security and surveillance.
  • Through flow warehouse: In this layout goods inwards and outwards are on the opposite sides of the building. All items must therefore travel the full length of the store. The layout also requires separate goods in and dispatch management with dual yard access and doubles the internal bay areas. The layout is useful where the goods in and out vehicle requirement is different, such as in their platform height or where the nature of the unit load warrants the separation of the two facilities. Disadvantages include the limitation of future extensions of the building.

Outsourcing storage:

This is a situation whereby an organisation decides to transfer part or the whole storage functions to outside contractors who provide the service to the organisation at a fee. The advantages of this approach are lower cost of storage, less staff employed, helps the company to concentrate on some other core tasks and less investment in storage fixtures and equipment. Disadvantages are no loyalty to the organisation, high chances of pilferage and loss of goods, increases charges of stock out.

Vendor managed inventory (VMI):

Vendor-managed inventory (VMI) is a JIT technique in which inventory replacement decisions are centralized with upstream manufacturers or distributors. The aim of VMI is to enable manufacturers or distributors to eliminate the need for customers to re order, reduce or exclude inventory and obviate stock outs. With VMI customers no longer ‘pull’ inventory from suppliers. Rather, inventory is automatically ‘pushed’ to customers as suppliers check customers inventories and respond to previously agreed stock levels.


Maintenance of security and prevention of theft:

Keeping stock secure depends on knowing what you have, where it is located and how much it is worth. The distinct security maintenance entails the following:

  • Building and stock yards- Doors should have limited entrants. Adequate locks should be fitted. Also its important to allow only authorised personnel to enter into the building.
  • Custody of the keys: All keys belonging to stores keepers and stock yard should be monitored, numbered registered with instructions on the person responsible for them.
  • Installation of electronic surveillance devices e.g. CCTV, video recorders, alarm systems etc
  • Statutory and other regulations adherence
  • Marking of stock-to avoid pilferage
  • Access to stores premise should be limited
  • Segregation of pilferage items-Provision of extra security for the items
  • Inspection by supervisors
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