The classification of stores refers to the categorization of tangible assets or materials held by an organization based on various criteria such as their nature, usage, value, and importance. Here are common classifications of stores:
Raw Materials: Raw materials are the basic materials or substances used in the production of goods. They are typically unprocessed or minimally processed and are transformed into finished products through manufacturing processes.
Work-in-Progress (WIP): Work-in-progress includes partially completed goods that are in the process of being manufactured or assembled but are not yet finished products. WIP represents the value of materials, labor, and overhead costs incurred to date in the production process.
Finished Goods: Finished goods are completed products that are ready for sale or distribution to customers. They have undergone all manufacturing processes and are in a saleable condition.
Maintenance, Repair, and Operations (MRO) Supplies: MRO supplies consist of materials and supplies used for the maintenance, repair, and operation of equipment, machinery, facilities, and infrastructure. Examples include lubricants, tools, spare parts, and consumables.
Consumables: Consumables are materials or supplies that are used up or consumed in the normal course of business operations. They are typically non-durable and need to be regularly replenished. Examples include office supplies, cleaning supplies, and fuel.
Capital Assets: Capital assets, also known as fixed assets, are long-term assets used in the production or operation of a business. Unlike stores that are consumed or sold within a short period, capital assets are held for the long term and provide ongoing benefits to the organization. Examples include buildings, machinery, vehicles, and equipment.
Hazardous Materials: Hazardous materials are substances that pose a risk to health, safety, property, or the environment due to their chemical, physical, or biological properties. They require special handling, storage, and disposal procedures to mitigate risks and ensure compliance with regulations.
High-Value Items: High-value items are stores with significant monetary value or strategic importance to the organization. They may include expensive equipment, rare materials, or critical components that are essential for the organization's operations.
Obsolete or Surplus Stores: Obsolete or surplus stores refer to materials, supplies, or equipment that are no longer needed or usable due to technological advancements, changes in demand, or excess inventory. Proper disposal or liquidation of obsolete or surplus stores is necessary to free up storage space and prevent losses.
By classifying stores into distinct categories, organizations can better manage their inventory, track usage and expenditure, and make informed decisions regarding procurement, storage, and disposal strategies.