Module 3
1 . Advantages and Disadvantages of Centralized and Decentralized Stores in Industries
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1. Centralized Store
Definition:
A single, central warehouse or store manages all materials and supplies for the entire
organization.
Advantages:
1. Better Inventory Control – Easier to track stock levels and prevent overstocking or shortages.
2. Economical Purchasing – Bulk buying reduces cost per unit and improves negotiation power.
3. Efficient Space Utilization – Consolidation reduces duplication of storage space.
4. Standardization – Uniform storage, labeling, and handling procedures.
5. Simplified Record Keeping – One system for all inventory transactions.
Disadvantages:
1. Delayed Material Availability – Departments may experience delays when materials are
needed urgently.
2. Transportation Costs – Frequent movement of materials to various departments increases
logistics cost.
3. Overload Risk – Central store may become congested if not managed properly.
4. Less Departmental Control – Individual departments have limited control over their immediate
requirements.
5. Dependency Risk – Any disruption in the central store affects the entire organization.
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2. Decentralized Store
Definition:
Multiple stores located near individual departments or production units, each handling specific
materials.
Advantages:
1. Quick Material Access – Immediate availability reduces production delays.
2. Reduced Transportation Within Plant – Materials are stored near point of use.
3. Departmental Autonomy – Departments can manage their own inventory efficiently.
4. Flexibility – Easier to respond to urgent or unexpected requirements.
5. Reduced Central Store Load – Avoids congestion at a single warehouse.
Disadvantages:
1. Higher Inventory Cost – Multiple stores may lead to overstocking or duplication.
2. Difficulty in Control – Harder to maintain uniformity and centralized record keeping.
3. Space Utilization Inefficiency – Each department needs its own storage area.
4. Increased Risk of Wastage – Lack of centralized supervision may cause spoilage or
obsolescence.
5. Higher Management Effort – More staff and resources required for multiple locations.
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[End of Notes]
[Link] Material Handling (AMH)
Definition:
Use of automated equipment and systems to move, store, control, and protect materials
throughout manufacturing, warehousing, and distribution.
Reduces manual labor, increases efficiency, and improves safety.
Advantages:
Faster material transport
Reduced human error and labor cost
Improved safety and ergonomics
Consistent handling and reduced damage
Supports Just-in-Time (JIT) and lean manufacturing
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Working Principle of Common Material Handling Equipment
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1. Belt Conveyor
Principle: Continuous movement of a belt looped over pulleys to transport materials.
Material placed on the belt moves due to friction between belt and material.
Driven by electric motor, speed can be controlled.
Common in assembly lines, bulk material handling, and packaging.
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2. Chain Conveyor
Principle: Materials are moved by chains connected to sprockets, either directly carrying loads
or pulling slings/platforms.
Can transport heavy and bulky items, even vertically.
Used in automotive assembly, metal handling, and heavy industries.
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3. Forklift
Principle: Powered vehicle with fork tines slides under pallets to lift and move materials.
Lifting achieved by hydraulic system actuating mast and forks.
Provides mobility in warehouses and loading/unloading operations.
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4. Overhead Crane
Principle: Loads are suspended from a hoist attached to a bridge running on rails mounted
overhead.
Hoist moves vertically, bridge moves horizontally along rails, and the entire crane may move
along building rails.
Allows lifting, lowering, and moving heavy loads with precision.
Common in heavy manufacturing, steel plants, and shipyards.
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Summary:
Belt and chain conveyors are continuous transport systems.
Forklifts provide flexible, mobile handling.
Overhead cranes are high-capacity, precise lifting systems.
All aim to reduce manual effort, improve efficiency, and ensure safe material movement.
[End of Notes]
[Link] Affecting the Layout of Stores
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1. Nature of Materials
Type, size, weight, and hazard level of materials influence storage method and arrangement.
Example: Heavy machinery parts require strong racks; flammable materials need special
storage.
2. Volume and Frequency of Stock Movement
High-turnover items should be easily accessible; slow-moving items can be stored in remote
locations.
3. Storage Method and Equipment
Selection of racks, pallets, bins, conveyors, forklifts, or automated systems affects layout
design.
4. Available Space
Floor area, height, and shape of the store determine aisle width, shelving arrangement, and
stacking method.
5. Safety and Security Requirements
Hazardous or valuable materials require safe placement, fire protection, and restricted access.
6. Ease of Handling and Accessibility
Layout should minimize travel time and material handling effort for efficient operations.
7. Future Expansion and Flexibility
Space allocation should allow growth in inventory, addition of new products, and changes in
handling methods.
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[End of Notes]