Warehouse management is an area where significant investment has to be made by every retailer or wholesaler. The efficiency of management at the warehouse reflects in the processes that follow in the business.
Starting from optimizing warehouse space to ensuring smooth inflow and outflow of products, no over-stocking or under-stocking, timely shipment of products, to minimizing overhead and labor costs are all responsibilities that a warehouse management team have to take up.
Let’s look into a few tips that can help streamline the entire warehouse management process:
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.
Companies not having automated inventory management systems are at a big time loss. 65% sales loss has been reported due to inefficient inventory management. Using barcodes for identifying your SKUs (Stock Keeping Units) within warehouses has been proved to improve inventory management and sales tremendously.
It is, thus, 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
Make information pertaining to all your warehouses available across all of them. Utilize a software that can help you integrate inventory and orders across all your warehouses and that is usable by multiple users. This gives great clarity to the available stock and avoids confusion.
Inventory Management Software like Primaseller lets you manage your multiple warehouses and stores (online and retail) from the same place. This leads to smooth flow of inventory and orders with absolute clarity of transactions.
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 rethink about stocking the product at your warehouse. The valuable space in your warehouse must be properly utilized. If the particular stock at your warehouse is moving very slowly, then it’s better to avoid storage costs by drop shipping from the manufacturer.
4. Optimize warehouse space
Make better use of vertical spaces. Do not use similar type of shelving for all items. For example, using pallet racks for small items does not make sense. It wastes space.
Use bin locations to locate products. This will allow you to accurately and speedily locate products whenever you want. Take care not to mix multiple SKUs at the same bin location. This slows down the entire process.
5. Implement lean warehouse operations
Reduce safety stock. Overstocking at your warehouse will lead to waste of space and time alike.
Lean inventory is nothing but that amount of inventory that is just needed to satisfy your customer demands, i.e., the cycle stock that you need.
Maintaining lean inventory has several advantages like reduction in time spent looking for inventory, reduction in stock handling time , reduction in the number of trucks required to transport your inventory, saving warehouse space as well as storage costs, etc.
6. Track shipping details accurately
Accurate details of shipping helps to get an idea of a number of factors including the quality of your stock, cycle time, lead time, labor hours involved in each shipping, etc. One must also track the cost/item shipped, percentage of perfect shipments, and shipping dock utilization.
In order to understand the efficiency of your warehouse management, one must keep measuring the following KPIs (Key Performance Indicators):
1. Order Fill Rate
This shows 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 one is about 98%.
2. On-time Shipment
This shows the percentage of orders shipped within the defined time.
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 can be used 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. Integration and centralization of data makes management of stock much smoother.