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Warehouse Inventory management: Explained

Warehouse storage unit

How can warehouse operators improve efficiency through effective inventory management and what is involved in the process? Read our handy guide to find out more…

What is inventory management?

Inventory management is a collective term used to refer to the processes by which warehouse stock is received onto a premises, tracked during storage, and eventually dispatched to end customers.

Among other things, it focuses on:

  • How products are organised in the warehouse
  • What speed different items move through storage, i.e. how quickly they are sold
  • What stock is incoming at any one time, including seasonal items and peak sales
  • Speed and efficiency of order fulfilment

Effective inventory management allows warehouses to maintain and control what items are held in stock through timely replenishment and refreshment, enabling faster order fulfilment and better customer service.

Inventory management: explained

There are six steps to effective inventory management. These are:

#1 An organized space

#2 Categorized stock

#3 Counting

#4 Security

#5 People management

#6 Optimized processes

An organized space

Effective inventory management starts with a well-organized physical warehouse space, where different items are safely and securely stored, and clearly and quickly identifiable to those picking and packing customer orders. Choosing the right warehouse storage solutions will help ensure best use of square footage and maximize storage capacity. Where possible, flexible storage will help operators to manage peaks and troughs in demand.

Categorized stock

Items held in stock should be categorized and treated differently depending on how quickly they move through the warehouse. Fast-moving SKUs are best located close to the picking and packing area in some kind of pick face, while slower moving items can be stored on pallets at height, making best use of the vertical space available within most warehouses.


Warehouse operators should always know how much and what stock they have on site and in transit at any one time. All stock should be tagged with a label; product number or barcode, and products should be regularly rotated to avoid the build-up of outdated or older items. Any items that are found to be damaged should be promptly identified and moved to a dedicated area for assessment and rework.


It goes without saying that effective inventory management entails protecting stock against external hazards such as fire, theft and flood. Maintaining appropriate environmental conditions through temperature and humidity control will also help avoid sensitive stock becoming spoiled in storage.

People management

Effective inventory management is only possible in warehouses with adequate staffing, where worker wellbeing is appropriately prioritized. All employees should be trained in proper safety, security and stock handling procedures, including how to use on-site lifting equipment, how to manage the storage of delicate and/or hazardous products, and how to stack and locate stock correctly.

Optimized processes

Technology may be used where appropriate to automate and optimise repetitive tasks and those processes that are vulnerable to human error. Automated robotic or semi-robotic systems may be used to speed up the unpacking of shipments and locating of received inventory, while digitizing stock management removes the need for a daily physical stock count.

Why is inventory management important?

Good inventory management makes a warehouse run more efficiently, and an efficient warehouse can pick, pack and dispatch orders faster.

A well-organized warehouse that practices good inventory management also loses less stock due to damage, spoiling, outdating and other factors.

Warehouses that lose less stock protect their customers against the associated financial hit that comes with missed sales opportunities. What’s more, the speed and accuracy with which they can fulfill an order can become a point of differentiation that sets a retailer apart from the competition in a crowded marketplace like e-commerce.

In short, good inventory management is good business for everyone concerned.

Inventory management: How PALLITE™ PIX™ can help

At PALLITE™ Group, we have developed in our PIX™ range of warehouse storage solutions, an effective tool that can assist warehouse operators in the practice of effective inventory management.

Consolidating multiple pick locations into a single pallet footprint, PIX™ warehouse shelving is a great solution for storing small to medium sized, relatively fast-moving SKUs for maximum efficiency. Walk sequences are reduced, pick times improve, and square footage is freed up through effective organization for the storage of additional stock.

“…we were able to gain a lot more space by replacing the usual pallets of our previous storage solution. Goods that used to be stored very inefficiently on pallets are now perfectly stored in the PIX™ SLOTS storage bins.”

Best Water Technology

Whether operators choose from our standard PIX™ pick faces, or opt for lighter weight storage or a heavy duty pick bin, they benefit from the same planet-friendly, flexible, intensely practical storage.

Super-strong PIX™ units are capable of holding up to 500kg each, across up to 400 individual pick compartments, and are far more durable than traditional cardboard storage bins.

Easy-to-fit, interchangeable dividers allow compartments to be flexed to the size and shape of different SKUs to enable them to be stored more securely and picked more easily.

Meanwhile, flat shelf edges allow space for product identifiers such as labels, tags and barcodes to assist human and automated pickers alike.

Made entirely from our signature recycled paper honeycomb cardboard and biodegradable PVA glue, all PIX™ units arrive flat-packed and can be built and dismantled with ease without the need for any tools or fixings. They are also 100% recyclable after use.

Discover how Denmark-based men’s accessories brand Trendhim moved more than 650,000 individual stock items to a new 5,500m2 warehouse in a single weekend, making use of PALLITE™ PIX™SLOTS to house its rehomed inventory.

For more information on what makes PALLITE™ PIX™ the perfect warehouse storage solution, read our blog on warehouse storage optimization.

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