Managing your warehouse and inventory is a continuous process that persists as long as your business operates. In this article, we'll explore the importance of effective warehouse inventory management, share industry best practices you can adopt, and explain why you should let Bertling help you with your warehousing.
WHAT IS WAREHOUSE MANAGEMENT?
So, what is warehouse management in logistics? Warehouse inventory management involves the principles and processes essential to the daily operations of a warehouse. This includes receiving goods, organizing warehouse space, scheduling labor, managing inventory, and fulfilling orders. On a deeper level, effective warehouse inventory management means optimizing and integrating these processes to ensure all aspects of the warehouse work in harmony, boosting productivity and minimizing costs.
BENEFITS OF WAREHOUSE INVENTORY MANAGEMENT
While warehouse operations are often unseen by customers, they are crucial for timely delivery. Effective warehouse management ensures all processes run efficiently and accurately. This includes optimizing space for maximum inventory storage, making items easy for staff to locate, enabling monitoring of aging inventory (FIFO) through the use of WMS, maintaining adequate staffing levels, fulfilling orders efficiently, and coordinating with suppliers and transportation companies to ensure timely arrivals and shipments.
Good warehouse inventory management leads to fast, high-quality service at lower costs, benefiting the entire supply chain and strengthening relationships with both suppliers and customers.
WHAT ARE THE 4 MAIN STEPS IN INVENTORY MANAGEMENT?
When you have inventory to sell, you need to balance how much stock to purchase to satisfy customers with how much inventory is old or in excess.
To manage your inventory effectively, you can follow a 4 step process:
1. ASSESS YOUR INVENTORY
To effectively assess your inventory, you need a system that tracks the quantity of materials or products on hand and ensures that your records match the actual stock levels.
In a periodic inventory system, records are updated periodically through physical counts of items.
In contrast, a perpetual inventory system updates records in real-time as inventory levels change, often using electronic systems integrated with point-of-sale systems.
2. REVIEW YOUR LAST INVENTORY STOCKTAKE
When reviewing your inventory list, compare it with previous records and consider the following:
- Have the numbers remained consistent?
- Have they increased?
- Do you have stock that shouldn’t be there?
- Is there stock that isn't selling?
3. ANALYZE SALES
As you compare your inventory lists, also review your sales data. By analyzing your current inventory list, previous inventory list, and sales report, you can identify which items:
- Sell quickly after restocking
- Haven’t sold at all
- Are essential to your business
Core business items typically sell steadily and contribute significantly to your gross margin. Keep in mind that seasonal items may only sell well during certain times of the year and might be slow movers otherwise.
4. IDENTIFY ITEMS TO REPURCHASE OR RETIRE
You should now be able to decide which items to repurchase regularly and which to phase out.
For items being retired, sell off the remaining stock to free up space in your storage and displays. Offering these items at a discounted rate can help move them faster.
When repurchasing items, evaluate whether you should increase your order quantity. If an item sells quickly, ordering more at once may reduce postage costs. Alternatively, you can order smaller quantities more frequently and arrange for more regular deliveries.
HOW DO WAREHOUSES KEEP AND MANAGE INVENTORY IN THE BEST WAY?
1. REASSESS YOUR WAREHOUSE LAYOUT
Your warehouse design should promote a logical flow of inventory, from receiving and inspection to picking and packing, ensuring efficient and smooth operations. A cluttered or congested layout can hinder inventory management, making it difficult for staff to access stock. This also limits space for essential processes like receiving, increasing the likelihood of human error. Regularly reevaluating your warehouse layout is particularly crucial when company sales grow, as this often leads to greater space requirements. Safety aspects concerning personnel and inventory are also considered in the warehouse layout assessment.
When updating your warehouse design, consider the following questions:
- Is my current layout making the most of the available space?
- Do my employees have adequate room to perform their tasks effectively?
- How long has it been since I last updated the layout? Has our sales volume significantly increased during that period?
- Do I want to incorporate specific inventory logistics strategies, such as cross-docking or wave picking, into the new layout?
2. REORGANIZE YOUR STOCK KEEPING UNITS
For efficient warehouse and inventory management, organize products and for easy access. Group SKUs by size, velocity, and seasonality to minimize search time. Create zones based on pick type, placing fast-moving items near shipping for quicker retrieval. Implement lean inventory practices by eliminating underperforming products to reduce stock levels and boost efficiency.
3. AUTOMATE EVERYTHING
Investing in technology enables automation of key workflows like data collection, barcoding, picking, packing, shipping, and inventory tracking. Automation enhances scalability, reduces human error, boosts efficiency, and saves on labor costs. After implementing automation, regularly reassess your strategy to ensure it meets your business’s efficiency needs.
4. ENABLE YOUR EMPLOYEES
To enhance warehouse inventory and management, make it easier for employees to work efficiently. Implement strict safety standards, optimize cleaning schedules, and create a clear organization plan for easy product location. Use automation to keep accurate records that staff can access quickly, and provide mandatory training for any new technology.
An organized warehouse boosts efficiency and supports omni-channel success. By adopting these practices and investing in the right software, you can streamline operations, improve morale, and accelerate inventory turnover.
WAREHOUSING, DISTRIBUTION, AND MATERIAL MANAGEMENT WITH BERTLING
At Bertling, we bring extensive expertise in managing in-house warehousing, distribution, and export packing services, all of which are integral to our global logistics network.
Our proven capabilities in materials management include owning and operating consolidation warehouses in numerous international locations. These facilities are fully equipped to offer comprehensive warehousing and marshaling solutions. Please contact us to learn more.
