Warehouse management is an area where every retailer or wholesaler makes a solid investment. The efficiency of management at the warehouse reflects in the processes that follow in the business.

warehouse management

A warehouse management team looks into several different aspects such as

  • optimizing warehouse space to ensuring smooth inflow and outflow of products
  • no over-stocking or under-stocking
  • timely shipment of products,
  • minimizing overheads and labor costs.

Warehouse management is a typical optimization problem since you need to look into so many different parameters at the same time.

What is warehouse management?

Warehouse management involves managing inventory movement from receiving to picking, packing and shipping products. A warehouse is where most of the actual stock moves around in and this also increases the scope for errors and losses immensely.

Using inventory management software for warehouse management ensures that the scope for human error is low. With better visibility of your warehouse inventory, you can manage your retail business much more efficiently.

Here are a few ways to make warehouse management more efficient.

Warehouse Management Tips:

  1. Automate all warehousing operations

    ‘Some organizations with 30,000 or 40,000 item numbers and multiple facilities are still convinced they’re better off without technology’, says McKnight-Denny McKnight, partner, Tompkins Associates Inc. It is easy to see that most inventory mistakes begin at the warehouse.

    Companies not having automated inventory management systems are at a big-time loss. 65% of sales lost are due to inefficient inventory management. Using barcodes for identifying your SKUs (Stock Keeping Units) within warehouses can improve inventory management and sales tremendously.

    It is advisable to utilize a multi-channel inventory management software in order to manage all your warehouses and stores all from the same place.

  2. Centralization of information

    Information about every single warehouse has to be available across all storage locations. Why? Because this quickly tells you what the best place to fulfill an order is. Use software that can help you integrate inventory and orders across all your warehouses and that multiple users can access.

    A good Inventory Management Software like Primaseller lets you manage your multiple warehouses and stores (online and retail) from the same place. This way, inventory flows more smoothly and you can fulfill orders with absolute clarity.

  3. Track the number of times a particular product is picked during a specific time period

    If an item was picked only 6 times a year, then you must consider if you should even be stocking that product. The space in your warehouse is an asset and you don’t want to fill it with products that do not move. If a particular product at your warehouse is moving very slowly, then it is better to drop ship the product and avoids storage costs.

  4. Optimize warehouse space

    Make better use of vertical spaces. Do not use a similar type of shelving for all items. For example, using pallet racks for small items does not make sense. It wastes space because you cannot stock these items too high or too far back.

    Use bin locations to locate products and label every shelf. Get used to your warehouse space so you know the best location for each product. Take care not to mix multiple SKUs at the same bin location as this can lead to confusion during picking and slow down the entire process.

  5. Implement lean warehouse operations

    We just have one thing to say here- reduce your safety stock. Overstocking at your warehouse will lead to waste of space and time alike. Safety stock is only supposed to help you deal with sale surges. It isn’t a fallback for bad inventory management. Calculate the reorder levels for each product and use them to decide when you need to restock.

    As opposed to overstocking, give your inventory a good workout- keep it lean! Hold only as much stock as you need. Doing so ensures that you spend less time looking for inventory and picking the right products. It also helps you reduce the number of trucks required to transport your inventory and you can save on warehouse space, too.

    warehouse management

  6. Track shipping details accurately

    When you maintain all the information about the shipping process, you get to understand several parameters better, such as:

    -quality of your stock,
    -cycle time and lead time,
    -labor hours involved in each shipping.

    You must also track the cost per item shipped, the percentage of perfect shipments, and shipping dock utilization. All of these can be optimized to reduce your costs even further.

  7.  Pick Orders In A Scientific Manner

    Use a warehouse management tool or your own observations for how to pick orders. This becomes important as your warehouse begins to grow in size and SKUs. For items that move fast and frequently, assign a separate zone. This way, items that don’t move often aren’t displaced too much.

    For these items that move fast, consider the best way to arrange them so they can be picked in the same order each day. Also, for every picking, assign at least two staff- one to check off the list and one to actually add to the correct bin.

  8. Avoid Warehouse Traffic

    While it seems like a no-brainer, many people put off organizing and disposing of the packaging material. This stuff then lies around the place making it impossible to process the next order. Good warehouse hygiene is every stakeholder’s responsibility.

    Some studies show that a well-lit work environment leads to more productivity. Since warehouses are naturally without much ventilation, use artificial lighting to make the place bright and pleasant. This is one way to encourage people to spend more time there and complete a task until it is really done.

    In order to understand how efficient your warehouse management process is, measure the following KPIs (Key Performance Indicators) often.

  1. Order Fill Rate

    This is the number of items ordered versus the number of items shipped. It essentially shows how good the service level of a distributor is. A good service level is often in the vicinity of 98%. This means for every 100 items you receive orders for, you fulfill 98 of them in the same time period.

  2. On-time Shipment

    This shows the percentage of orders shipped within the defined time. This parameter is partly dependent on the shipping provider you choose.

  3. Storage

    Storage costs are an important KPI in warehouse management. Some measures include storage cost per item, inventory storage per square foot, and days-on-hand.

There are many more factors that you can use to measure warehouse efficiency like warehouse capacity, customer retention rate, new customers, putaway, etc.

Primaseller is an inventory and order management software that lets you manage inventory across all your warehouses and stores, both online and retail, from one single place, thus making integration and centralization of data better.

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CEO and Founder of Primaseller