Maximizing the efficiency of your warehouse processes is good for business on so many levels. It helps warehouse workers fulfill more customer orders successfully during a single shift. It also enables inventory control which leads to fewer product losses through damages or expiration. Proper inventory management enables you to be on time with replenishment, reducing customer wait times and improving customer satisfaction.
What Is Warehouse Inventory Management?
Warehouse inventory management is an important part of warehouse operations. It is the process by which you keep track of the inflow, outflow, storage, condition, and location of goods in warehouses. Sophisticated warehouse management software enables you to manage inventory tracking in large warehouses, or even to manage two or more warehouses in which your company stores its stock.
How Do Warehouse Inventory Management Systems Work?
Warehouse management systems respond when you scan the SKUs on individual products during warehouse picking. They also keep track of the items you are adding to your stock with each new delivery that the warehouse receives. The employees must simply scan an item, and the system will tell them where to put it. When they pick an item for delivery, the software will also alert them of diminishing stock levels and let them know when it is time to contact the supplier to restock that item.
Why Is Warehouse Inventory Management Important?
Warehouse management increases the velocity of the supply chain, helping all the businesses involved in the sales and delivery of the goods to profit. It is an essential component of supply chain logistics. By relying on automation technology, warehouse management software reduces the risk of human error, as well as health hazards in the workplace. Warehouse management efficiency enables goods of any size, shape, or seasonality to get from the vendor to the customer without expiring or getting damaged.
Boosts Warehouse Productivity
Any warehouse has only a limited amount of space, and each employee only has so much time in one workday. Organization and efficiency make all the difference in how much productivity you can get from your warehouse and your workers. The dashboard on an employee’s handheld device will give the employee clear instructions about what to do next with each article he or she picks and give an idea of the big picture about the article’s journey to the customer. The various tools and functions of the software will help employees troubleshoot issues quickly so that they can fulfill their orders quickly.
Improves Order Fulfillment Accuracy
It takes a long time for an employee to look at every item on a shelf until he or she finds the right one, or for an employee to scan the barcode of every identical box on the shelf until the correct item is located. Warehouse management software includes instant reporting methods that show the employee where to go and which items to pick. The employees do not have to verify each serial number by hand. With automated guidance, it is easy for employees to find the correct items, even if the items do not have high visibility.
Increases Customer Satisfaction
Not only does efficient warehouse management make the jobs of warehouse employees easier, but it also improves customer satisfaction. Warehouse management software provides insights about where to store the most sought-after items for easy access and when stock levels are getting low enough for a restock. It also allows you to keep tabs on new deliveries as they approach your warehouse, so you can give customers a realistic estimate of when their orders will arrive. Therefore, customers do not have to worry about their items arriving late because the requested item was out of stock.
Faster Shipping and Deliveries
Without warehouse inventory management software, it is very difficult to manage a large number of items and process them quickly. Warehouses that deal in a high volume of goods need automation to enable them to receive goods and ship orders without delays, to keep the supply chain moving efficiently.
Saves You Money
Warehouse management software can do in minutes what it would take an entire team of warehouse managers and employees several days to do. Inventory management technology enables you to free up time for your employees to do the things that only humans can do. It also enables them to have accurate and up-to-date information at their fingertips. By reducing delays and mixups, warehouse inventory management helps businesses of all sizes save time and money.
Warehouse Inventory Management Best Practices
Even with the world’s greatest warehouse inventory management software, you still need a trustworthy warehouse manager to make executive decisions about the warehouse and its inventory. Likewise, a warehouse is only as efficient as its layout, so you should carefully plan the layout of your warehouse before making decisions about inventory management. After that, you should decide how the workflow should go and then engage your warehouse management software to implement it.
How to Implement Warehouse Inventory Management?
Warehouse inventory management is a multi-step process. Once the workflow gets going, your automated warehouse management technology can make it go smoothly and efficiently, but first, you need to do some preliminary planning and setup.
Determine the Warehouse Layout
No two warehouses are alike, so you should choose the warehouse layout that works best for your company. Think about which items need the most visibility and about how much your stock changes based on seasonality. Also, think about how easy it should be for people or vehicles to access the various areas of the warehouse.
Establish a Workflow
Just as every warehouse has its own ideal layout, every warehouse has its own ideal workflow. You can rely on data to inform your decisions about workflow, but human warehouse managers should have the final decision about how the workflow in the warehouse should go.
Appoint a Warehouse Manager
Even if your warehouse management software can keep track of the workflow at multiple warehouses at the same time, you should still appoint a warehouse manager for each warehouse. A human manager can detect issues that software cannot, and only a human being can manage interpersonal conflict among warehouse employees and other stakeholders.
Implement Warehouse Inventory Management Software
Once you choose a warehouse management software to implement your inventory management system, everyone’s work at the warehouse will get easier. Getting used to any new software is a learning process, though. Build time into your schedule to train the warehouse employees on how to use the new warehouse inventory management software.
Your e-commerce business can thrive with the help of automated warehouse management. The right layout and the right warehouse management software can help your company be more productive and operate more efficiently.
Warehouse Inventory Management FAQs
These are some frequently asked questions about warehouse inventory management:
What Are the Types of Inventory?
Across industries, inventory tends to fall into four categories, namely raw materials, work in progress (WIP), finished products, and maintenance, repair, and overhaul (MRO). Each type of inventory requires a different warehouse layout. Warehouse management software can help you manage all four types of inventory in different warehouses.
What Are the Main Steps in Inventory Management?
The first step in inventory management is to appoint a warehouse manager. Next, you must determine the appropriate layout for your warehouse, as well as its appropriate workflow. Then you are ready to choose a warehouse management software to automate the process. Once your workflow has started, you can replenish the inventory according to a schedule or on an as-needed basis.
What Is the Inventory Formula?
The inventory formula is (cost of goods sold plus ending inventory) minus purchases. It may seem like a simple mathematical formula since it only requires addition and subtraction, but it is much easier to do with the help of inventory management software.