Explore the functionality of warehouse inventory management in warehouse operations and how it can help optimize, automate, and streamline your business.
Effective warehouse operations are essential for ensuring timely and accurate customer order fulfillment and, ultimately, customer satisfaction.
A well-functioning warehouse management system (WMS) and inventory management system (IMS) are critical components of this process. Without them, businesses risk inventory inaccuracies, order processing delays, and poor customer experiences. In this article, we’ll explore the importance of WMS and IMS in warehouse operations and how they contribute to the overall success of your business.
How Does Warehouse Management Differ From Inventory Management?
Warehouse management and inventory management work hand in hand to streamline warehousing processes, uphold a safe working environment, and safeguard profits.
Warehouse management often includes periodic optimization of the warehouse layout, receiving and storing goods, picking and packing processes, and shipments. Part of warehouse management also includes managing the warehouse workers, equipment, and other resources. Warehouse management aims to create processes that run smoothly and safely, avoiding bottlenecks and accidents.
Inventory management is more concerned with governing the warehouse’s inventory, including managing inventory levels, forecasting demand, and placing orders to restock as necessary. The goal of inventory management is to make sure that the warehouse stores the right amount of inventory to meet customer demand without excessive overstocking or stockouts.
How do Warehouses Keep Track of Inventory?
Efficient warehouse operations typically employ both manual processes and software solutions to track inventory.
Some standard inventory tracking methods include barcode scanning, radio frequency identification (RFID), and automated storage and retrieval systems (ASRS).
Warehouse automation allows for tracking stock levels, locations, and movement in real time, which helps to improve accuracy, reduce errors, and increase efficiency. While manual audits of inventory levels ensure the software is functioning correctly.
What is a Warehouse Inventory Cycle?
Simply put, warehouse inventory cycle counting means physical inventory SKU counts are monitored periodically and checked against the WMS records. As mentioned above, these manual audits are an excellent way to check your inventory and catch any potential software or human errors before supply chain issues arise.
How do Warehouses Store Inventory?
Warehouses use various storage methods depending on the warehouse space and materials handled. Standard storage methods include pallet racking, shelving, bulk storage, and material-handling cart storage.
Many optimized warehouse layouts include a static storage area that houses bulk items and slow-moving goods and a dynamic storage area where high-demand items are readily available for picking.
Regardless of the storage method chosen, warehouses need to establish inventory management techniques that work for the unique processes, as storage can impact inventory visibility, picking processes, safety, and more.
Common Warehouse Inventory Management Challenges
Inefficient inventory management processes can cost time, money, and in some cases, even the safety of your workers. Here are a few shortfalls to look out for when planning an effective inventory management system.
One of the significant challenges inventory managers face is forecasting inventory replenishment needs to maintain efficient supply chain management. Inaccurate forecasting can have many causes, including inaccurate demand or historical sales data, inaccurate sales projections, or even unexpected changes in the market that lead to a major detour from past sales.
Inefficient Picking Processes
Disorganized order-picking processes can lead to delays in order fulfillment, errors in product selection, and increased warehouse labor costs. They can also make inventory forecasting more difficult, as it’s more difficult to predict demand when there are errors and delays in the workflow.
Lack of Real-Time visibility
Real-time visibility allows inventory managers to make informed decisions about inventory levels, track bottlenecks in inventory movement, and invest in the right solutions to keep warehouse processes running smoothly. Without this real-time visibility, inventory management is delayed resulting in overstocks, stockouts, and difficulty predicting future demand.
5 Tips to Improve Your Warehouse and Inventory Management
Effective inventory management solutions paired with streamlined warehouse processes make a huge difference in your warehouse’s inventory control and order fulfillment capabilities. Here are five ways to improve your operations today:
1. Automate your warehouse inventory management systems for real-time inventory tracking
If you haven’t already, consider implementing a cloud-based, third-party logistics software to automate order management, tracking inventory movements, order fulfillment, and reporting. Inventory management software can either be purchased as a standalone product or as part of a more comprehensive enterprise resource planning software (ERP) that offers a suite of solutions, including warehouse management software functionalities.
2. Implement a cycle counting program to improve inventory count accuracy
As mentioned prior, cycle counting is a valuable practice to implement in your warehouse management systems to improve the accuracy of inventory counts and catch any issues early on to avoid bottlenecks, overstocks, or stockouts.
3. Optimize warehouse layout and storage methods to streamline picking processes
Streamlining the picking process can improve operational efficiency, reduce labor costs, and improve safety in the warehouse space. A well-designed warehouse layout can help reduce the time and distance required for transporting materials and products around the facility.
An ideal layout will also allow you to implement efficient picking techniques like wave picking, mother-daughter cart picking, and just-in-time picking.
4. Invest in quality material handling equipment
Quality material handling carts and trailers navigate tight spaces with speed and precision. Custom solutions can be tailored to your specific applications and can help streamline multiple processes around the warehouse, maximizing efficiency and decreasing the risk of accidents.
5. Regularly review and analyze your inventory data
Checking in with the data produced by your warehouse inventory management software is a great way to identify trends, spot inefficiencies, and make informed decisions. You can use this data to optimize your inventory levels, adjust your reordering policies, and improve the overall layout of your warehouse.Effective warehouse and inventory management is crucial for the success of any warehouse operation. By implementing the right systems, warehouse managers can streamline operations, reduce costs, and improve the overall productivity of their processes. Learn more about how Nutting’s custom material handling solutions support your overall inventory and warehouse management strategy.