Warehouse and Materials Management

Introduction

Purchase of raw materials is an integral part of any business, i.e. manufacturing organization or service organization.

Purpose of raw material is to be converted into finished goods for selling, but after purchase and before selling, they need to keep in safety and good care. The timeframe of storage can be short period or longer depending upon nature and requirement of materials.

Any damage or theft to the materials is going to increase cost to the organization. So it becomes important for organization to have a robust and effective warehouse as well as material’s management.

Scope of Warehouse Management

The place where raw material and/or finished goods are stored is referred to as warehouse or store. Generally, warehouse is structure or building design keeping in mind raw material and finished goods it is going to store. Therefore, warehouse management should be able to:

• Receive the purchase goods and entered upon the stock register.
• Inventory Accounting of raw material, work-in-progress or finished goods.
• Preservation of the inventory
• Ability to access goods whenever called upon.
• Appropriate record keeping through coding as to preserve goods and reduce obsolescence.
• Proper stocking of goods as ensure smooth handling.

If above objectives are met, warehouse management significantly increases the overall efficiency of the production and organization. A robust warehouse management would ensure that:

• A smooth flow of production
• Appropriate layout management to reduce material handling and equipment handling
• Reduce to wastage as well as spoilage
• Eliminate the possibility of theft and damage
• Ensure preservation of environment and reduce pollution.
• Encourage cost reduction and driving efficiency

Warehouse Design

Warehouse design is art in which goods and material can be stored as to reduce wastage, cost of carrying and increase safety. The various factors considered for warehouse design are as follows:

• Easy material handling including receipt, dispatch and storage.
• Easy supervision of materials as well as personnel
• Reduce and control obsolescence of the goods by following appropriate method.
• Optimum utilization of space

Storage Location

There are three general ways in which goods are stocked as to reduce material handling and increase prompt access. They are as follows:

• Fixed position in which specific area is located where designated goods are stored. If the designated goods are not there, that space will remain empty. Fixed position encourages easy and traceable access to the goods.
• Random Storage in which goods are stored where ever space is available. Here maximum utilization of the space is achieved.
• Categorized fixed location in which particular set of products are placed randomly in the allotted space.

Material Management

Material management is a sub-set of warehouse management dealing exclusively material which contribute the maximum to completion of the end product. The objectives of material management are as follows:

• Lower the price of the raw materials.
• Reduce the cost of production and ensure the smooth flow of production.
• Maintain quality of raw material as well as finished goods.
• Maintain good relation with the supplier as to ensure a smooth flow of raw materials.
• Continuous improvement of the skill set of the workers thereby increasing overall efficiency within the organization.

Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.