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A Guide to Warehouse Inventory Management: Best Practices, Challenges & Solutions

Bhagyashri Kambale | February 03, 2022 | 833 views
A GUIDE TO WAREHOUSE INVENTORY
Inventory management in warehouse is a never-ending cycle till the time the business is in operation. As your business expands, so does the amount of effort and money spent on warehouse inventory management. After all, the more orders you receive, the more time you'll need to spend on inventory replenishment and warehouse organization.

Fortunately, there are several methods to enhance the warehouse inventory management process, from more efficient storage to the use of automation and other solutions that can minimize manual labor, human error, and total expenses.

In this article, we will look at some of the key challenges that manufacturers face while managing their warehouse inventory and their solutions. Furthermore, we see the best practices for optimizing your warehouse inventory management that would ultimately enhance the efficiency of business operations.

Warehousing and Inventory Management Best Practices


Appoint a Warehouse Supervisor

Managing an effective warehouse begins with hiring a qualified manager. Your organization should choose a warehouse manager with substantial expertise in operating a warehouse comparable to the one you will be operating. A skilled warehouse manager ensures that everything runs smoothly. He/she must be organized, knowledgeable about warehouse operations and technology, and function as a quarterback for the warehouse's rest of the team.

Your warehouse manager will monitor your staff to ensure things are correctly scanned and cataloged. Additionally, they will frequently engage with your warehouse inventory management software to keep a bird's eye perspective on your goods. Finally, your warehouse manager will be responsible for handling any inconsistencies or challenges that develop, so that they respond dynamically anytime your warehouse staff discovers a problem. Some attributes to look out for in your warehouse manager are: organizational ability, precision, tech-savvy, safety-mindedness, leadership, integrity, and a sense of calm.

Plan the Warehouse Layout

The structural layout of your warehouse will either assist or limit your warehouse workers' ability to promptly pick, load, and send items out in response to a sale or transfer request. By dividing warehouses into zones or slots and numbering aisles and bins, warehouse employees may more easily navigate the storage facility. While not all warehouses are designed the same way, an organized warehouse is necessary for effective operations. The way you plan your warehouse space will depend on the things you store. For example, a warehouse containing huge machinery may have specialized zones, whereas a warehouse storing small retail products will have bins and aisles.

Optimizing your warehouse plan will not only enhance space utilization but also increase warehouse productivity and save you money. Consequently, this helps you reach your company goals and satisfy your customers with on-time deliveries.

Create a Workflow

Maintaining an efficient inventory control warehouse is critical to avoid bottlenecks and out-of-stock situations. In addition, a streamlined inventory workflow can assist you in keeping your buyers satisfied and convert them into loyal customers. So, how would you establish an efficient workflow?

Here are some helpful warehousing and inventory management suggestions:
  • Make an attempt to estimate future sales.
  • Use tools that assess old sales and forecast future sales for you.
  • Set a minimum production quantity for each product. This helps to avoid losing sales and income due to product shortages.
  • Set a maximum stock limit. This assists in avoiding overstocking a product, which can result in considerable losses. 
  • Ensure that products are delivered out in the order in which they were received (first in, first out) to maintain product freshness and reduce shelf life. 
  • Use a warehouse inventory management system. This is the simplest and most effective method of maintaining a steady inventory flow.

Invest in Warehouse Inventory Software

A warehouse management system (WMS) is a software solution designed to automate, optimize, and support the operations and activities of a business warehouse. It can automate and simplify a variety of warehouse management operations and maintain a real-time inventory record of all available goods. When goods arrive and depart the warehouse, your warehouse inventory management system will accurately show all inventories and its whereabouts.

Warehouse inventory management software may be configured to automatically replenish stock when a predefined minimum number of items are reached. The finest software analyzes previous sales data automatically to identify the appropriate minimum number for automated reordering. It also determines the minimum quantities at which each product should be replenished.


Warehouse Inventory Challenges and Solutions


Limited Visibility & Solution

Inventory visibility refers to the ability to view and track inventory in real-time. It also helps gain insight into the exact number of units of each SKU in stock at all locations, along with its location within a warehouse or fulfillment center.
When inventory is difficult to identify or find in your warehouse, it can result in incomplete, inaccurate, or delayed shipments. Receiving and locating the correct stock is essential for smooth running warehouse operations as it helps to maintain a positive customer experience.

Solution: To optimize purchasing and receiving operations, increase accuracy, and eliminate missing goods. Including photos with correct product descriptions in your inventory database can also be helpful. Investing in inventory management software is, once again, the best way to overcome low inventory visibility. These systems are meant to automate the process of inventory management across the supply chain, all from a single dashboard. The adoption of digital and data-driven procedures allows businesses to have a comprehensive view of inventory management in warehouse.

Inventory Depletion & Solution

Unsold goods are considered a loss in inventory. Multiple factors contribute to inventory depletion or shrinkage. Sometimes stocks can become obsolete or out-of-date before being sold. In addition, spoilage, damage, or theft are a few other reasons for inventory loss and can be referred to as a serious supply chain issue. Therefore, it is necessary to identify, track, and measure trouble areas.

Solution: Using a third-party logistics (3PL) or fulfillment service (fulfillment solution) increases security. To reduce inventory shrinkage, they'll take the necessary steps to keep your goods secure. They'll provide you with the technology and reports you need to keep an eye on stock levels.

Using an Old Excel Spreadsheet & Solution

The expansion of a company will be hampered if inventory is managed manually using paper-based techniques. A lack of digitalization and an ineffective inventory management procedure yield dismal outcomes when sales volumes rise and inventory increases. It is time to replace excel spreadsheets with newer technologies like business intelligence and to analyze and track large businesses better.

Solution: Having an inventory management system will make the process more efficient and provide you with real-time data. Businesses utilize various inventory management systems, depending on their type of operations. Manual inventory, periodic inventory, and perpetual inventory are three examples of inventory management approaches. Another option is to use one of the several software programs such as Upserve, Megaventory, and Orderhive for inventory management that are currently available on the market.

Warehouse Space Management & Solution

A warehouse layout that facilitates the simple selection, packaging, and shipping of orders is a sign of efficient warehouse space management. Designing a functional warehouse layout is critical since it directly influences the efficiency and productivity of your warehouse. A well-designed warehouse layout enables easy access to stored goods, saves travel time, and increases order fulfillment rates.

Solution: Optimize storage space and inventory flow by utilizing inventory management systems that include warehouse management features. Automate order picking, packaging, and shipping operations by categorizing inventory storage by shelf, bin, and compartment.

Communication Difficulties & Solution

Collaboration and communication are critical in the management of warehouse. Lack of communication in a warehouse can result in disorganized operations, resulting in errors and inefficient processes. In practice, this might imply that stock is misplaced or delayed, resulting in a negative customer experience.

Solution: Warehouse workers should be equipped with phones and radios for one-on-one communication. Mobile devices are the foundation of portable communication, which is critical for warehouse employees who are always on the move. Supervisors and managers must have a PA system, also known as a public address system, to make announcements in an emergency or when loading and unloading goods.

Another option to simplify warehouse operations is to distribute wearable GPS devices to your employees. Using cloud-based software to manage inventory also provides the best solution for checking stock and communicating data across departments.

Final Words

Warehousing and inventory management affect every step of your e-commerce supply chain, from receiving and storing goods to fulfilling and shipping orders. Poor warehouse inventory management may lead to higher logistics costs, dissatisfied warehouse personnel, more picking and packing errors, delayed shipments, and disappointed customers. However, with some of the best practices mentioned above, you may improve your warehouse inventory management. You can take advantage of the solutions to most of the key challenges listed above.

FAQ


What are the four ways to control inventory?

The four key ways of controlling inventory are as follows: just-in-time delivery, downloading inventory software, stock control, and lowering carrying costs.

How is inventory management different from warehouse management?

The primary difference between the two systems is the human component. While inventory management is concerned exclusively with merchandise or stock, warehouse management includes the administration of workers as well as shipping or shipping professionals who work in a warehouse setting.

What are the four inventory management types?

Primarily, inventory management is grouped into four types:
  • Raw materials
  • Works-in-progress
  • Maintenance, repair, and operations (MRO) goods
  • Finished goods

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