organization set-up of the stores
depends upon the requirements, and have to
be tailor-made to meet the specific needs
of an organization.
There are two broad classifications of
Functional Stores and Physical Stores
based on physical considerations.
Physical considerations: There can
be various types of stores based on the
quantity of stocks held or distance from
the point of usage, like central stores
sub-stores, transit stores, site store
There can be a central store serving three
or four factories or several shops in a
large factory or it can be a central
warehouse containing finished goods. The
word ‘central’ only denotes that it severs
various units each of which may have
separate sub-stores or departmental
stores. Central stores also exists in
Usually for better control, Organization
keeps a Central Stores which is usually
responsible for all activities mentioned
above for entire organization and then
sends them on ,as and when basis, to other
stores which are usually attached to the
production capacities located at various
For example a hospital may have a central
stores with separate ones for each
category of ward i.e. stores for linen,
surgical instruments, drugs, and general
The stores in an airlines company may have
the following sections – receipts,
quarantine (pre-inspection), commercial
stores, general paint and oil stores,
stationary stores, raw materials stores,
aircraft spares subdivided into engine
spares and accessories, general, radio,
instrument and maintenance.
Advantages of a Centralized Store :
1. Centralized Store can offer a wider
range of goods is provided for all users
than is possible in smaller stores.
2. Inventory can be minimum as
material is ordered based on requirement
of all other attached parties and material
can be shunted to and from one store to
other one attached to the Central Stores.
This is especially so in the case of tools
fixtures, equipment and spares.
3. Better control is possible.
4. Economies in storage is
possible. Goods in bulk will occupy less
5. Bigger storehouses enables
better and more modern handling methods
(mechanical or automatic).
6. Delivery at a single point
decreases cost of delivery.
7. Receipt and inspection of goods
can be more efficiently organised.
8. Opportunities of standardization
9. Stock turnover is increased and
the probability of deterioration during
storage is correspondingly decreased.
Less personnel will be required for managing.
Unnecessary duplication of records takes place
in decentralized Stores. For example, one may
have ten different Kardex cards for one
martial stocked in ten places. Similarly,
accounting work is multiplied.
Disadvantage of a Centralized Store:
1. Extra handling is involved and staff
will be required for transportation from
stores to the various production units.
2. If the system is not well organized
there can be severe shortages at work places
causing unnecessary interruptions in
production. Inefficiency can also result in
Production keeping some buffer inside the
unit, which can lead to cluttering of space,
and to pilferage because of the absence of
3 More internal documentation may
4. If a fire takes place there is a
greater risk, because entire stocks can be
lost bringing production to a total halt.
5. It is apparent that there can be
myriad’s of types of materials which are
stores, depending upon the type and complexity
of the industry which the Store serves. There
can be small items like nuts and bolts or
heavy items like steel plates, there can be
gases in cylinders (like LPG or oxygen),
powders, liquids, some of them dangerous like
sulphuric acid, or inflammable, like petrol,
and so on. The variety is almost infinite.