Page 279 - DMGT501_OPERATIONS_MANAGEMENT

Unit 13: Supply Chain Management and JIT

other considerations resulting in a pile-up of inventory that would neither move fast nor can be Notes
thrown out. The search is for the most cost-effective solutions to organize and reduce inventory
levels.
Agility has now become a very important requirement in Organizations. The solution is being
found in technological advances that provide visibility in the whereabouts of all parts moving
to the plant at any given time. Agility and sprightliness of Stores Function is based on these
types of technological advances. These contribute substantially in making the whole organization
flexible as is the need of the hour. Customer demands have become very aggressive and
organizations need to react, respond and immediately satisfy them in order to remain in the
customer's good books and get repeat orders.
Stores is a very broad word that indicates a wide variety of materials stored such as chemical,
metals, liquids, gases, spare parts, equipment, or finished goods, ranging from engineering
components to drugs and pharmaceuticals.
Each of these items will require a specific type of storage and their handling and preservation
methods will vary accordingly. There is a high degree of specialization required to store and
handle these products and in many cases special storage licenses need to be obtained from the
Government, e.g., the storage of petroleum products or explosive products. It is hence mandatory
for Stores personnel to understand thoroughly all of these requirements and implications.

Stores range from ordinary ones with shelves and bins to cold or dehumidified storages, huge
silos for storage of food grains or bonded warehouses for keeping goods on which customs and
excise duties have not been paid. The number of different storage devices is almost as large as
the number of different materials.
One key to selecting a storage device is the accessibility of the material. Another key relates to
its ability to utilize vertical and horizontal space efficiently. The following storage devices are
common:

1. For bulk storage of products, large bins with chutes that can easily feed materials to a
process are often used. Other bulk products may be stored in drums or other large
containers. Products stored in bulk are usually commodity items that do not have an
individual part identity. Some examples are iron ore for steel making, stone for paving
roads and parking lots, alumina for making aluminium, and chemicals for making paper.
2. Pallet is the base over which the load of material is assembled. Pallets are specially
designed platforms, which may be lifted by fork-lifts.

3. Pallet racks are devices that can be used to stack pallets on top of one another. A pallet is
a storage platform, usually made of wood that a fork-lift can easily pick up. Pallets facilitate
quick movement of batch production items or parts from one point in a facility to another.
4. Intelligent warehouse systems use Drive-in racks: computer controls guide driverless
vehicles to the proper rack. Drive-in racks allow forklifts to drive between the racks,
which are in vertical columns. Forklifts can drive in and pull material from any point in
the rack and drive out again to deliver it.

5. Flow-through racks is another new introduction. These racks tend to be used for smaller
products that move in and out of inventory quickly. In flow-through racks, the racks are
rollers and the shelves are tilted in one direction. Materials are added at the back of the
shelves and roll down to the front, where they are removed.
6. Bin racks are used for storing smaller parts. Bins may have special dividers, spacers, or
containers for keeping parts from mixing together.

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