Warehouse Inventory Management: A Complete Guide.

It is important to understand that the management of your warehouse inventory will determine the profitability of your company. It is particularly true for small business. Properly managed warehouse inventories have a positive impact on the order fulfillment, delivery and customer satisfaction. This all translates to increased sales and profits.

To manage warehouse inventory, you must follow the correct warehouse inventory management processes.

Here is a guide on warehouse management. It explains its importance, and the best practices that you can use to manage your inventory effectively. Let’s get started:

What is warehouse Inventory Management?

The warehouse inventory management process is a way to manage the stock in the warehouses through tracking and auditing mechanisms. This includes everything from the accounting of the stock as it enters warehouses until it reaches customers.
This involves understanding the warehouse layout, the types of storage for each stock type, the restocking level for each, the optimal inventory levels, and much more.

Warehouse inventory management ensures that your employees can navigate the warehouse safely and easily to fulfill the orders from customers.

What are the processes involved in warehouse inventory management?

Here is a brief overview of the different kinds of processes that happen in a typical warehouse inventory management department:

• The warehouse is ready to receive the goods
• Recording each item of inventory accurately
• The appropriate storage area for your inventory
• Orders received from customers
• Manage the packing process based on these orders
• Documenting these orders with proper invoices and bills
• Returns from customers are handled separately and accounted for.
• Regular warehouse audits can help to avoid issues such as excess inventory or stock out.
• Demand forecasting based on market trends or historical data.

• Just-in-Time (JIT), – In this case, you only manufacture or purchase goods when there is a customer demand. You can then send the inventory out as soon as they arrive in your warehouse. This will help you to reduce your carrying costs.
• Cross Docking This is similar to JIT. The receiving and loading compartments have been arranged so that goods can be loaded as soon the warehouse has accounted for them.
• ABC Analysis – Classifying your inventory into A,B and C, where A is high-value and contributes to 80% of revenue, while B is items contributing 15% and C are items contributing 5%.
• Two bin method – This method is not widely used today but it works well for small business. Your goods are put in one bin and your reserve stock of the same type is placed in the other bin. Once the first bin has been emptied, it is time to replenish stock. The new stock will arrive sooner than you have used up the stock from the reserve bin.
• Fixed Order Quantity– This process allows you to determine the threshold for reordering each stock type and then replenish the inventory when it falls below that threshold.
• Fixed Period Ordering– You reorder stock at regular intervals. The quantity is usually constant, but during the festive and holiday season it increases significantly.
• Vendor managed inventory – You share with the vendor your sales data, historical information, customer feedback, and other pertinent details. Vendor-managed inventory – Here, you share your sales trends, historical data, customer feedback and other relevant details with a vendor.
• Drop Shipping – This system does not require you to own or hold any stock. You purchase the product directly from a supplier when you receive an order. Most e-commerce businesses today use this method of managing warehouse inventory.
• You will be able to make better use of the floor space and reduce operational and carrying costs by understanding the warehouse layout.
• Automation of processes can help you track real-time inventories and reduce problems like stock-outs, late deliveries, missing stock, excess inventory, etc.
• We can help you put in place the right systems and equipment to motivate and produce employees.
• Supply chain cycles that are as robust as you can
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