What are the basic needs for storing materials?


The basic needs for storing of materials are:

(i) To reduce the cost of Production

The main aim of storing of materials is not only to provide efficient store- keeping service but- also to reduce the cost of production. Storage cost is necessary to be incurred besides the cost of materials.


It includes cost of materials and supplies; the cost of preservation and handling of stores; the cost of record keeping; the cost storage equipment and store building; expenses of arranging light; heat; ventilation; paying taxes; insurance; and losses due to spoilage and improper location to stores. These costs directly or indirectly influence the cost of production.

The need for storing of materials is to make proper efforts in minimising these costs so that the cost of production can be reduced.

(ii) To provide efficient service

Storing of materials helps the organisations by making provision for the right quality and quantity of materials, equipments, tools and other components within minimum time to the production unit.


It also provides maintenance materials, space parts, general stores and other materials to the production and other departments for their proper and smooth functioning. It recedes finished units from production department and issues to the sales unit.

(iii) To establish co-ordination

There must be proper co-ordination between the stores and other departments. It is not possible to run smoothly either the store department without co-ordination with other department or other departments without the services of stores department.

Co­ordination is established with material control department, predict department, purchase department, sales department and transport department. Stores department is dependent on above departments for its day-to-day functioning


(iv) To help in formulating plans

The stores manager acts as the adviser to management for preparing its investment policy. His advice is immensely useful to management for creating plans and policies. He gives proper information to the management in important matters on physical verification, inspection, replenishment, obsolescence and disposal of scrap, etc. Proper storing of material avoids mismanagement of stocks.

(v) To reduce the inventory investment to the minimum

Storing of materials helps in reducing the inventory investment to the minimum through avoiding the idle materials in stores and enables the management for effective use of working capital.


(vi) To assure continuous flow of materials

It assures right flow of materials for different jobs and eliminates stoppage in manufacturing operations. It helps the enterprise to assess the stock position and to take meaningful action for replenishment of stock.

(vii) To provide protection to stocks

It helps the materials to be properly protected against damages, theft, pilferage and unauthorised issue.


(viii) To provide link between purchasing and production

It helps the enterprise to have materials of right quality, right quantity and at right place and at right time keeping in view the future needs of material.

(ix) To help in minimising the cases of accidents

Right storing of materials helps in minimising the cases of accidents by proper placing the stores in different racks, bins, and shelves.

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