If your small business stocks up the goods you immediately sell in a warehouse, warehouse management is an important part of your supply chain management. This is important to track the products your business keeps handy and make sure you keep up the best levels so you can easily fulfil customer orders faster.
Knowing how to build up a warehouse management plan – and pock the inventory management software your business wants to support it – is crucial to stay acquainted with your stock, stopping theft and loss, and making your customers content by quickly filling orders.
This is not just a blog but a comprehensive guide to warehouse inventory management. It’s a robust resource to address all of your highly pressing questions.
Warehouse Inventory Management: An Overview
Warehouse inventory management is a method that ensures stock keep securely in a warehouse or different storage facility is easily received, monitored, audited, and well-managed for order fulfilment. Also, it includes the replacement of stock when prearranged low quantities are reached, updating your stock to high levels on the basis of historical sales data. Same as the broader inventory management processes, warehouse management aims at managing incoming as well as outgoing products while knowing where every piece is placed.
Warehouse inventory management is a particular subsection of a wider inventory management plan, which directs every product held by a company from the point of developing purchase orders for suppliers to make sure that the products are delivered to the customers safely. Warehouse management pays attention to the organization and tracks the stock when it is in storage and how faster some items are sold.
Difference between Warehouse Management and Inventory Management?
Warehouse management is basically related to goods that are secured in storage facilities and warehouses, instead of those placed in storefronts of those that are utilized in the manufacturing process. It’s an aspect of the wider inventory management process, which tracks stock from the acquisition point to the sale point.
However, while stock is stored in your warehouse, you must look for a process to make sure nothing should be missed, so it’s ready to go when the time comes to easily sell it.
Warehouse management is associated with a broader inventory management process by ensuring that products are perfectly shipped out to customers or storefronts in a timely manner. While a sale is perfectly made or a transfer order effectively comes in, the warehouse must be set up to allow employees to faster select items, easily pack them and then ship them. This implies storing products in predictable locations and after that tracking them as they step out of the warehouse door at the time of final delivery.
Working Process of Warehouse Inventory Management
Warehouse inventory management software has many great features which includes monitoring the goods within your storage facilities and oversee inventory control. In some cases, warehouse management software is developed into broader enterprise resource planning (ERP) software solutions; in some other cases, warehouse management software act as a stand-alone system. The best idea is to purchase a seamlessly integrated process in order to manage your inventory across the entire ecosystem of your company.
Inventory management software covers the acquisition, tracking, and shipping of products, ensuring you know what products are where at what time. Also, they can serve as forecasting tools, enabling you to order items based on expected customer demand according to historical sales data. Some also gives notifications to make the warehouse’s operational process better, indicating when it is time to perform cycle counts, for example.
Best Practices for Managing your Warehouse Inventory Management
These four steps are crucial to setting up your warehouse for efficiency and success.
1. Hire a Warehouse Manager
Operating an effective warehouse begins with hiring someone having the competency to lead; your business should hire a warehouse manager who has more experience operating a warehouse same as the type you’ll be running.
Your warehouse manager will track your workers in their regular positions. This person ensures that items are being rightly scanned and catalogued effectively. Also, they will keep engaging with your warehouse inventory management software to track your inventory. At last, any problems or anomalies that emerge will be managed by your warehouse manager, so they must be able to address dynamically whenever your warehouse employees acknowledge an issue.
2. Discover the Warehouse Layout
The physical layout of your warehouse will either assist or obstruct your warehouse employees in choosing, packing as well as shipping items faster when a sale is ended or transferring an order is done. Differentiating warehouses into zones and indexing bins and aisles can help warehouse workers handle the storage facility quite effectively.
Not all warehouses are set up in a similar manner, but a well-organized warehouse is a requirement for effective operations. How you make your warehouse space could differ based on what product types your store. For instance, a warehouse storing heavy machinery might have particular zones but is improbably to own aisles and bins, such as a warehouse keeping up smaller retail products.
You must have thought about how a warehouse employee will move throughout your warehouse while you’re making some physical space. Ensure your valuable items are accessible easily.
3. Set Up a Workflow
With a leader hired to monitor the warehouse operations and an organization system in place, you will likewise have to put in place a particular workflow. The warehouse manager must have good experience in this area, so we collaborate with them and set up a warehouse workflow that actually makes sense for your business. Thus, your workflow must address different major points:
- How do I get new inventory?
- When latest inventory is received and where does it go?
- How is inventory monitored when it arrives, when it is transferred and when it comes out of the warehouse?
When it’s the right time to sell that piece, having an idea of its location is useful. You require a system to tell you to visit the exact place where the product actually lives. You have to track it as it quickly moved from its actual location to the doorstep of the customer.
Also, you must discuss various considerations with your warehouse manager, such as:
- Inventory location tracking: Figure out whether you want lot tracking, serial tracking, or a blend of both. Tracking is an important part of inventory control, allowing operators to understand exactly where a product is when it is ready for pick up. Serial tracking is helpful for value-added items that sell in fewer quantities, whereas lot tracking is quite effective for low-value, top-notch items. Features of the barcoding can be implemented to automate the updating of tracking information for single items within a warehouse inventory management software. Specifically, tracking is crucial when selling on various sales channels, stopping you from overselling as well as mistakenly running into negative quantities.
- Cycle counts and daily inventory audits: Conducting proper cycle counts is crucial for inventory control. With no consistent cycle counts, units could be easily lost or stolen that your warehouse manager hardly knows. If you only do inventory counts yearly, you could immediately identify that you’ve lost some inventory after some time. Especially, it’s crucial to apply consistent cycle counts while dealing with sufficient goods that expire. Perform inventory counts quite frequently on your bestselling items.
- Accounting methods: Based on how your warehouse works, you might go for any costing methods like last in first out (LIFO), first in first out (FIFO) or any other. Such accounting methods are vital to your warehouse management as many inventory management software integrates with your advanced accounting software to reduce the possibility of double entry and the chances of human error. Your warehouse inventory management software must have a costing method that is compatible with the rest of your accounting.
- Data reporting: Warehouse managers play the role of generating as well as distributing data reports, which can be easily produced and personalized in your warehouse inventory management software. Such reports involve information such as sales data, product qualities, requesting data from potential vendors and getting information about any expired or lost products.
4. Use Warehouse Inventory Management Software
A warehouse inventory management software can assist in automating as well as simplifying various warehouse management tasks and refreshing records of every existing stock in real-time. Until your team or warehouse rightly scans and catalogues items as they arrive in your warehouse and just move throughout it, your warehouse inventory management software will show your present stock and its particular location in the warehouse.
Most information must be there in the ERP software. This tells you which specific item should be easily cycle counted and how frequently they want to be counted – that stems from transactional data.
Also, this software can be easily set up to repeatedly order stock while products reach a fixed minimum quantity. The best software automatically checks the historical sale data to find out optimal minimum quantities for automatic reordering and to which quantities it must replenish every product.
Do You Want to Implement a Warehouse Inventory Management System?
Hope this Guide to Warehouse Inventory Management helps you learn a lot about this. To effectively run a warehouse, hire a trusted warehouse manager, implement powerful inventory management software and plan a proper workflow that incorporates consistent cycle counts, tracking of inventory and proper data reporting.