When starting out as a new business, managing inventories is fairly straightforward if you’re starting small. But, as your business grows, and you begin to introduce new SKUs, and channels, and start reaching new markets, your warehouse inventory will become increasingly difficult to manage without help.
Naturally, the next step is to send your goods to a warehouse for safekeeping. As your business continues to grow, so will your warehouse costs, so it’s important to have a good understanding of the different costs associated with warehouse management.
Today, we take a look at how warehouse inventory management can improve the productivity and efficiency of your warehouse, how you can implement solid Warehouse Management Systems (WMS) into your warehouse operations, and how outsourcing your fulfillment can tie this all together.
In this article
What is warehouse inventory management?
Warehouse inventory management is a type of inventory management system that’s focused solely on the warehousing aspect of your operations. It’s essentially being aware of all the products you have entering and leaving your warehouse, the location and size of the space they occupy, and how efficiently your goods are processed while they are in the warehouse.
It doesn’t matter how big or small your business is; managing the warehouse phase of your supply chain management system can have an enormous impact on the profitability of your business. Basic warehouse inventory management includes making sure that your stock is being replenished, your goods are getting out to customers in a timely manner, and ensuring that no goods go unaccounted for.
However, those businesses that sell large quantities of goods or that are serious about growth use technology to truly optimize the efficiency of their warehouse. Through insights provided by a WMS, companies can make smart decisions on storage space, the fulfillment process, courier choices, and much more.Â
Good warehouse technology will also provide businesses with real-time updates on the progress of their orders, which can then be relayed back to the customer.
How warehouse inventory management helps improve productivity and efficiency
There are various ways that warehouse inventory management processes can help your business, from improving pick and pack accuracy to streamlining your order fulfillment.
1. Pick and pack accuracyÂ
Disorganization is the biggest enemy of successful warehouse management. Without a good picking and packing process in place to actively manage where stock is located, and failing to have a proper inventory management system in place to organize stock, the chances of incorrect items being picked and packed are high.
Pick and pack inaccuracy has a knock-on effect that impacts every part of the fulfillment process. Resources will need to be used to rectify mistakes, customers will be unhappy when they receive an incorrect order, and business reputations will suffer as a result.
Warehouse operations that are on top of their warehouse inventory management will use smart processes backed by technology to ensure that orders get picked accurately and packed correctly.
At James and James, our finely tuned warehouse management system means that we’re able to pick and pack orders at 99.9% accuracy.
2. Inventory security
With so many goods entering and leaving warehouses each day, failing to manage warehouse inventory properly could result in stock going missing. Similarly, inventories can be damaged if not handled correctly.
An efficient warehouse will have designated areas for each part of the fulfillment process, with technology to accurately track where in the fulfillment process a particular item is. This raises accountability for warehouse workers working in a designated area, improving the protective atmosphere of an operation.
At James and James, our goods in process ensures that all products are accounted for, and all product locations and quantities are tracked and updated in real-time via our software. We also have a designated high-value cage for expensive goods, as well as 24h warehouse security.
3. Quicker fulfillment process
When a warehouse is a tight ship, orders can be fulfilled more quickly. There are several stages to the order fulfillment process; goods in, storage, picking, packing, shipping, and returns.Â
Each stage is made up of several mini-stages, and it’s important for each macro and micro stage to be optimized for efficiency.
Without good inventory management, mix-ups, confusion, and mistakes can occur both within and between these stages. This, clearly, will result in delays in orders being fulfilled, and bottleneck the speed at which fulfillment can be achieved.
Each Stage of the James and James fulfillment process is powered by technology, with each stage being carefully designed for efficiency. As a result, we’re able to ship 98% of orders same-day: an industry leading speed.
4. Insights to help save money
A side effect of efficient warehouse inventory management is the large quantities of data that will inevitably be collected. This data can, amongst other things, be used to help you save money.
We can take the data provided to us to make better use of our storage space, fulfill orders more quickly, prioritize fast-moving stock, cut back on slow-moving stock, identify best-before dates before it’s too late and much more.
Over time, as more data is collected and inventory managers act upon the insights the data provides, businesses can reduce their bottom line and increase profit margins substantially.
James and James’ warehouse management system crawls data in real time to generate reports, breaking them down into handy, digestible insights that are designed to help businesses get the most value out of their warehousing.Â
5. Happy customers
Proper warehouse inventory management rubs off on your customers. When they receive the right order on time, it improves your eCommerce customer service experience.Â
Furthermore, if you’ve optimized your warehouse to properly handle returns, customers will feel more comfortable buying from you as it poses less risk to them. Messy warehouse management can seriously damage the reputation of your brand, and, in turn, negatively impact customer loyalty and retention.
6 Reasons to Implement a Warehouse Inventory Management System into Your Business
1. Layout optimizationÂ
Warehouse layout optimization maximizes warehouse space and streamlines the layout for efficient order fulfillment. It aims to facilitate smooth inventory movement, enhancing fulfillment speed and accuracy. Key principles include:
- Warehouse Performance Analysis – Identify inefficiencies and necessary improvements early to allocate resources effectively.
- Product Types – Design the warehouse based on the storage needs of different products, considering factors like size, weight, and temperature sensitivity.
- Defined Areas – Segment the warehouse into areas for each fulfillment stage, such as receiving, picking, packing, and shipping, to avoid mix-ups and boost efficiency.
- Future Planning – Anticipate growth and plan for future upgrades, like automation, ensuring the design supports expansion.
At James and James, each of our warehouses have been carefully designed to ensure that space is utilized to its fullest potential. As we specialise in fast-moving, lightweight products, we’re able to offer a truly optimised warehouse solution for this product type. Feel free to come and see it for yourself!
2. Tracking and recording
To have a proper understanding of the status of goods in your warehouse, inventories need to be recorded and tracked as soon as they enter the warehouse. This should include photographing items, measuring weights and dimensions, checking items for damage, and uploading all of the collected data onto a WMS.
A good inventory tracking system will allow you to see which items you have in stock, how many of each item, and where they are at each stage of the fulfillment process. Tracking warehouse inventory ensures that items don’t go missing, that weights and dimensions are probably labeled for picking, packing, and shipping purposes, and gives you a better understanding of what sells, and what doesn’t.
At James and James, our warehouse employees record and track every product that comes into our warehouse, and provide you with real-time updates on product locations, stock levels, inventory health, and more.Â
3. Demand forecasting
Knowing the times of the year your products sell best is key to good warehouse management. On a basic level, a company that sells Christmas decorations is, of course, going to want to make sure that they have a high amount of inventory in their warehouse during the Christmas build-up, but can afford to cut back on storage costs during the summer months as demand will be low.
Likewise, a business that sells suncream isn’t likely to have a ton of sales come through in the winter. Not every eCommerce business is this black and white, of course, but you get the message.
Understanding seasonal trends and buying habits feeds directly into your warehouse inventory management systems. Making sure you have the stock in place to meet demand while cutting back SKUs that will inevitably be less popular, can help you to cut costs significantly.
At James and James, our fulfillment experts will work with you to get the most out of your warehouse space, offering advice and guidance on how best to prioritize and store inventory.Â
4. Picking and packing
The pick-and-pack process is crucial for customer satisfaction, requiring correct item storage to prevent damage or loss. Optimizing this stage means ensuring pickers follow the shortest routes to collect items, crucial for efficiency, especially when orders contain multiple items.Â
Grouping frequently sold together products and leveraging technology, such as tracking information and photographic product records, can streamline the process and ensure accuracy. This approach minimizes back-and-forth movement in the warehouse and enhances the overall picking operation.
At James and James, we use our custom-built software to guide pickers through the aisles. The software automatically provides pickers with the most time-efficient route.Â
5. ShippingÂ
Shipping is the final step in the warehousing process, but another important part to optimize. Shipping orders cost a lot of money, and with shipping costs continuing to increase due to fuel price increases, it’s essential to cut costs where possible.
There are two main things to consider when optimizing shipping: the cost of delivery, and the speed of delivery. Both of these can be improved by ensuring that your goods are placed in a suitably located warehouse.Â
If you’re primarily selling goods in the EU, it makes little sense to keep them in a US warehouse. Likewise, some products might sell better in the UK, but others in the US.Â
In this instance, it makes sense to split your inventory so that products reach their required destination faster, and cheaper. Having multiple warehouses at your disposal is essential to achieve this.
Here at James and James, we’ve helped thousands of clients reduce shipping costs through our international network of fulfillment centers.Â
6. Returns managementÂ
Effective returns management is crucial for customer retention and cost control. Preventing returns by enhancing warehouse management ensures orders are accurate and undamaged, reducing return rates.Â
Clear product information on your website, including detailed descriptions and high-resolution images, also helps by setting accurate customer expectations. For unavoidable returns, a detailed policy helps verify return validity, restricting returns to those within policy to avoid misuse.
Clear return criteria make quick refunds and restocking possible, so swift processing of valid returns is crucial. This approach minimizes losses and maintains customer trust.
How our warehouse management software can help you
Gone are the days of pen and paper – a modern warehouse needs to be supported by sophisticated technology. Outstanding warehouse management simply wouldn’t be possible without warehouse inventory management software, and at James and James, we’ve designed our own.
ControlPort is an award-winning cloud-based fulfillment software which has inventory management, warehouse management, and courier management built in. Not only does it help us operate our warehouses with industry-leading efficiency, but it also provides our clients with an incredible amount of data for them to make informed decisions about their inventories.
Furthermore, ControlPort allows our client’s customers to see the status of their order in real-time, right down to the moment it gets picked, packed, labeled, and dispatched.
We’re proud to say that our warehouse management system provides invaluable benefits to our warehouse team, our clients, and our client’s customers. You can book a demo of ControlPort here. Why not see it in action for yourself?
Warehouse Inventory Management FAQs
Still have some questions about warehouse operations, inventory management systems, and warehouse managers? Here are answers to the most commonly asked queries.Â
How do I know what products to stock in my warehouse?
Ensuring that you store both the right products and suitable product quantities is key for good warehouse inventory management. Take some time to understand trends and seasonal patterns, and take note of how quickly each SKU is moving.
Finally, consider the location of your warehouse and assess whether it’s ideally placed to serve your most popular markets.
How do you manage a warehouse effectively?
Proper warehouse management requires both great people and sophisticated technology. Warehouse workers should be well trained – with regular reviews – and any tech you use should have a dedicated support team.
Ultimately, an effective warehouse needs to be highly organized by the warehouse manager. To achieve this, its layout should be carefully planned, it should be kept clean and tidy at all times, inventories should be managed effectively, and health and safety measures should be adhered to.
Are there any common challenges or problems associated with warehouse inventory management?
An efficient warehouse is a complex machine. All pain points are solvable, but some common challenges include:
- Storing too much or too little inventory
- Insufficient storage
- Poor tracking and recording
- Inefficient resource distribution
- Lack of training / human error
- Damaged/misplaced products
- Slow picking and packing team
There are, of course, many more day-to-day challenges that a warehouse faces. That’s why it’s important to have a good warehouse management system to help plan against, manage, and mitigate common issues, while supporting warehouse processes.
About James and James Fulfillment
Since 2010, James and James have been offering fulfillment solutions to eCommerce businesses looking to grow. We help our clients ship internationally through our network of fulfillment centers, and more are coming in the next few years.
We combine fantastic warehouse management with award-winning technology to offer a fulfillment solution like no other. With 99.9% accuracy and same-day dispatch on 98% of orders, get in touch with James and James Fulfillment today and find out how we can help your eCommerce business scale up.
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