Good warehouse inventory management is one of the most challenging tasks for every business. It includes the organized receiving of items for inventory, sustaining the quality of stocks during storage, regular tracking of stock, packing and delivering orders, and replenishing the supply on time when it reaches a minimum number. Things can go haywire if you are not careful in handling your inventory process. Through efficient warehouse inventory management, you can reduce storage costs, keep up with customer demands, and prevent the risks of stockouts or overstocks.
Constant monitoring of different inventory activities is essential to avoid problems that may arise and disrupt the workflow inside the warehouse. A 2019 report by McKinsey & Company reveals that about $385 billion is spent every year around the world on total warehousing costs, excluding added expenses in correcting mistakes and errors. Several warehouse management challenges can affect a business. Knowing these common warehouse inventory management problems can help you take action against and overcome these challenges before it gets too late.
5 Common Challenges in Managing Warehouse Inventory
1. Inaccurate Data
Inaccurate warehouse inventory can cause confusion and failure to match customer demands. It can be time-consuming as staff go to a location inside the warehouse to pick up supplies that are not there or keep items in storage that are already full. Incorrect information has a negative effect when warehouse inventory management involves restocking supplies when they already reached predetermined minimum numbers. You may be taking several orders only to find out that your supply cannot already meet the high demands. This may lead your customers to purchase from another company. Statistics show that 78% of customers have pulled out a purchase because of poor customer experience.
2. Inefficient Warehouse Layout
A badly configured layout can be a challenge to warehouse inventory management. A survey reveals that the average capacity utilization of a warehouse is only 68%, which means the spaces are not used efficiently during business operation. Wrong setup inside the warehouse can cause time wastage in looking for items. This decreases profitability because fewer orders can be fulfilled as you spend more time finding a product.
3. Manual Inventory
Manual processes of updating inventory data may not have precise stock information. Using pen and paper in handling your large warehouse inventory can be inefficient for your business. The documents may get lost while going through several employees. Your workers may get tired of spending a lot of time writing numbers and other information that may lead to costly errors.
4. Poor Visibility
Warehouse inventory management includes knowing if there is enough stock of items and where they can be found inside a warehouse or among several warehouses. Lack of visibility for stock location can cost your business time and money since locating and moving goods is essential for its seamless operation.
5. Lack of Space
One of the challenges of warehouse inventory management is the lack of space. The products will accumulate if the facility does not have enough space to store them properly. This can cause accidents, time lost in searching for the items, and loss of quality of the products since there are no available spaces for correct storage.
As you usher in 2024, you can start the year right by observing warehouse inventory management practices to improve the workflow of your business. Here are 7 tips to help you manage and organize properly the inventory of your warehouse. These best practices can help you avoid problems and increase productivity in the warehouse throughout the year.
7 Practical Tips for Warehouse Management
1. Perform Regular Inspections
Conducting regular inspections helps managers to identify problems and come up with solutions to immediately correct the concerns. This warehouse inventory management tip is important to avoid costly errors such as overstocks, and dead stock, or piled-up supplies that can suddenly fall and cause accidents to workers. Regular checking of inventory data helps prevent the input of inaccurate information.
2. Plan for Seasonal Demands
Plan for seasonal demands that occur during different times of the year like holidays or weather changes. Depending on their products, businesses have their seasonal demands. Another warehouse inventory management tip is to predict the demand based on previous sales. Make sure there is sufficient stock in the warehouse when that busy period starts.
3. Track the Bestsellers
Part of warehouse management is to track sales and orders. You can use a warehouse inventory system for increased efficiency so you can easily identify and track orders and sales per product and customer. The inventory data can give information on the high sellers. Use the data to track the bestsellers and place them in places that make picking and delivery a lot easier. This leads to more efficient warehouse inventory management. The storage and shipping of goods are quicker. Faster fulfillment can make your customers happy and help you save valuable time.
4. Replenish Frequently Ordered Items
One of the best practices of warehouse inventory management is to replenish stocks of popular items once they reach a certain minimum number. This is to keep the inventory flowing and avoid the hassle of turning down orders from customers because your warehouse supply can no longer accommodate them. To prevent costly downtime or stoppages in operation, warehouse managers must keep these storage areas stocked. They have to identify the frequently ordered items and replenish them immediately to avoid depletion.
5. Reorganize the Floor Plan
Do not be afraid to restructure your floor plan according to your business needs. This can make your warehouse operation more efficient. An organized warehouse eliminates clutter and makes the spaces easier for workers to pass through. Organize aisles and create specific zones for efficiency. The warehouse layout must be optimized very well so it is easier to receive, store, pick, and prepare the items for shipment. Warehouse inventory management practices include using various layouts and traffic patterns so items and employees can freely move from one location to another. You can put the fastest-moving goods near the shipping areas to reduce travel time. The slower-moving inventory can be placed at the end. You may also group items that are often picked together in the same area.
6. Keep the Warehouse Clean
A clean warehouse creates a safer and more organized workspace. You often find misplaced or forgotten items while cleaning. Reduce clutter and waste so workers can walk freely around while doing their duties. It also prevents accidents caused by scattered goods or protruding objects that may topple or get in employees’ way.
7. Train Your Staff
Part of warehouse inventory management is to train the staff about warehouse inventory so they can perform their duties efficiently. A warehouse is organized if the staff is also well-organized. Train the workers on policies and procedures so they can do things without much supervision as well as keep themselves away from injuries and accidents. Regular training allows them to learn how to use new tools, machinery, and technologies.
Managing your warehouse inventory can be challenging due to the different processes involved such as regular tracking of stock, delivering orders, and replenishing supplies. Checking your inventory requires proper attention to ensure seamless operations in the warehouse and prevent problems. As you begin 2024, you can observe the best practices on warehouse inventory management so you can increase the productivity of your business throughout the year.
Worklink Services, Inc. (WSI) has been offering warehouse management solutions for businesses in the Philippines. Its extensive network of warehousing and distribution operations can become branches of your company. As a reliable logistics company, WSI can create a plan according to a customer’s business needs. Are you looking for a trusted partner that can provide warehouse management services for your business? WSI can help.