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Material management

Centralization & decentralization

centralization• The purpose of favorable stores location is to minimize

handling of materials , remanding and internal transportation , reduce the distance moved by the materials and avoiding back tracing .

• In small plants , it is desirable to store the materials in a central store , which is controlled by store manager.

• Here the store is located near to the place of its usage.• In case of production center the stores can be located in

such a way it is situated in center and equidistant from the production area.

• This type of location is generally referred as the center storing.

Advantages of centralization • Better control can be availed on the inventory • Few number of storekeepers are required• All the storekeepers become familiar with the

materials and the functions so the work becomes very easy even in the absence of any one of them• Record keeping and referring becomes easy as it

is stored at a single place

• There can be reduced duplication of the items • Reduced obsolete materials are held in stores .• Economy can be maintained in the clerical staff

and expert services are possible.• Better layout can be maintained• Periodic inventory check and security can be

easily arranged.

Disadvantages of centralized • At time store room may be away from the

production department which may increase the internal transpiration this will not only increase the internal transpiration cost but also adds to the wastage of time.• The clerical staff may not always be well known

about the different needs of the various departments.• Delays may be caused due to long waiting as signal

store is responsible for serving of all the user departments• Overall inconvenience may be caused.• The store keeper may be overburdened at times.

Decentralization • This type of storing is preferred when the plant

large having different division or departments using different kind of materials. Tools and equipment neat the department where it is used maximum. While all those items such as stationery which may be used by the entire department is stored in a central storage. There are various advantages of the decentralized storing which are under.

Advantages of decentralization • Material handing becomes easy less costly• Reduces the bottlenecks or waiting for the collection

of material frome the stores.• There is less wastage of time.• There can be easy establishment of record keeping

system • Less risky as low chances of maladministration occurs• The function of procuring the materials becomes

convenient.

Disadvantage of decentralized• Duplication of the order for the materials is a

common problem. As the order may be placed be place by the purchase as well as the user department • Often the lack of communication is observed

between departments.• The manpower requirement increases.• More storage place is required.• There is greater possibility of the manipulation in

account.• Standardization may not be possible.

Thank you