BENEFITS OF A GOOD STORAGE SYSTEM:

The following would be some objectives of setting up a good storage system:

a)      To use space efficiently

b)      Allow for most efficient material handing

c)      Provide the most economical storage in relation to cost of equipment, use of space, damage to material, handling labour and operational safety

d)      To provide maximum flexibility in order to meet storage and handling requirements

e)      To make the store/warehouse a model of good housekeeping

f)        It should be located at a convenient place from where it is easy to receive issue and transport the materials.

g)      Professional appeal. Customers or clients picking goods from the store should get the impression that the stores are professional laid.

The following should be the benefit of a good storage system:

Cost Factor.

The cost factor is vital in terms of the operational costs, profits and the overall cost of production. Handling materials is very expensive in terms of equipment, plant, time and labour.  Therefore the more efficiently and quickly materials can be moved, the less the cost per unit. Efficient use of space reduces waste of space hence reducing cost of each unit.

Reduce or eliminate damages

Every time an item is moved, it costs money, takes time, and gives an opportunity for damage or mistake. Efficient warehouses reduce the amount of movement to a minimum, and make the necessary movements as efficient as possible. The less items are handled or moved, the less likely they will be damaged, stolen or otherwise mislaid and the less cost will be incurred also when moving items around internally.

Materials damage can be very expensive and will undoubtedly reduce the stock life of many                                                                                                                                                                                                                                                                          materials. It can also produce problems of premature deterioration and the costs that go with it.

Reduce movement

Materials flow has to be maintained if output and distribution have to be effective.  Transportation starts from the point of offloading to the storage to the point of production moved through the process back to the storage and then to distribution. Good storage system plan layout and handling simultaneously for example by planning layout to ensure that fast moving items have the least length of travel reduces overall handling costs. Similarly ensuring heavy materials are never placed directly on a floor, but are raised using suitable blocks or rails reduces handling effort.

Safety of personnel

Health and safety of many members of staff depend a great deal upon the type of materials handling and storage systems employed, the equipment operated and the level of training among operators.  A faulty system of poorly trained personnel working in the storage system can lead to serious accidents.

Production Interruptions:

Where manufacturing is involved, proper MHS reduces interruptions in the production. Delays in delivering materials in the production system result to machines and labour idle time resulting in inefficiencies. A good storage system ensures that materials are delivered as and when required in the most efficient manner.

Customer satisfaction.

A good storage system ensures that goods are located in the shortest time possible in the store. It takes a long time to locate an item in a poor storage system. With changing dynamics and stiff competition in the market, most customers would not wait for long before they move to the competitors. A good storage system ensures that goods are readily available.

Stock records.

Stock records should be available for any good storage system. The storekeeper can tell how much is held in stock at any one time. This reduces holding of too much or too little inventory. Stock forms a large part of working capital and should be well managed to reduce tying a lot of resources in inventory. This can only be managed when stock records are available.

References:

Leenders, M. Purchasing & Materials Management (10^th Edition)

ICRC Logistics Field Manual – Chapter 6 Warehouse Management pp 285-362

J. Mageto, Moi University, class notes - Materials handling and stores management, January 22, 2012