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What is inventory management?

a warehouse manager checking inventory on a PC

Managing inventory is a crucial task that businesses must constantly perform to prevent their warehouses from becoming unorganised and inefficient. This article will teach you the basics of inventory management and provide the necessary information for creating an orderly storage facility.

How inventory management works

Inventory management relates to how businesses receive, store, and ship items. Tracking inventory from the time it’s purchased to when it’s sold to consumers can help you accurately identify what to order. There are several techniques companies may use to monitor their inventory. An ABC analysis can determine the popularity of different products, and batch tracking can assist businesses with tracking the expiration dates of items.

Many distribution strategies are also available to help you efficiently move your inventory. Businesses that utilize cross-docking can unload items from suppliers directly into delivery trucks, while companies that use drop-shipping can send products right to the consumer from their warehouses. Some organisations prefer to keep safety stock on hand, while others may use a just-in-time inventory strategy to maintain the lowest stock levels possible.

What is warehouse inventory management?

Warehouse inventory management encompasses several responsibilities that lead to more efficient and organized storage centers. All interactions with your inventory are included in the definition, such as monitoring and storing items as they enter your warehouse. Warehouse inventory management also involves training crew members and optimizing your storage facility.

Proper inventory management can lead to numerous benefits for your company. A well-managed warehouse will improve customer experiences by preventing inaccurate orders due to inadequate packing methods and disorganised inventory. Worker productivity and shipping speed in an optimised storage facility can increase thanks to the warehouse’s improved efficiency.

How to organise the storage of inventory in a warehouse

Organising how inventory is stored first starts with the layout of your warehouse and the smart storage units used to temporarily house goods. The facility should be set up in a way that maximises productivity and makes the most use of your building. Creating a receiving area for incoming inventory will give warehouse workers the space required for properly categorizing the items, while designated sections of a storage facility should be used to house different types of stock. These areas should be organised using warehouse shelving, pick bins and other storage units, such as the fully-recyclable PALLITE® PIX® SLOTS. Allowing not only for inventory to be easily managed, but also for workers to quickly, accurately and efficiently pick and pack goods from this fully flexible warehouse solution can be designed with four pick faces up to 400.

The order with which items are placed in a warehouse can depend on the company’s preferences. For example, a business using the first in, first out method will prioritise moving its oldest stock first, which results in placing newer inventory on storage shelves behind older items. However, as a rule, best-selling SKUs should always be stored in pick bins and storage shelves near the front of your warehouse to make them easier for workers to access.

What are the different types of inventory management systems?

There are four main types of inventory management systems that you can incorporate into your warehouse.

ERP Model
The Enterprise Resource Planning (ERP) Model benefits businesses that wish to expand their supply chain operations. The system uses specialist software to help you manage daily business operations. The features of the ERP Model focus on organising a company’s current supply chain while also assisting with accounting and customer relationship platforms.

Cloud-Based Platform
A cloud-based platform is a system that runs on a server located outside of your organisation, offering benefits such as better security and a lower cost. Other features provided by a cloud-based platform include higher flexibility and recovering lost data.

Standalone System
The Standalone System is an affordable strategy smaller warehouses can use to manage their warehouse operations and inventory. This system’s simplicity makes it easy to incorporate into your business. This management system can also assist companies with packing, shipping, receiving, barcode scanning, and inventory tracking.

Supply Chain Module
The supply chain module offers businesses support in several specialised management tasks on top of assisting with basic warehouse operations, like material handling, transportation management, and vendor management.

Inventory management is a task that all product-based companies must constantly perform to ensure they maintain appropriate stock levels and optimise their storage facilities into productive environments. With the right strategies, planning and warehouse storage solution in place, businesses may use the provided information to help improve their inventory management.

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