Warehouse inventory management software is a critical tool for businesses that need to keep track of their stock. Not only do products need to be received on time, but they must also be stored and packed efficiently.
The growing demands of customers have given rise to warehouse inventory management software. These computer programs minimize the amount of manual labor workers need to complete and collect data that simplifies decision-making. Read on to learn what to look for in this software and take advantage of our free warehouse inventory spreadsheet template.
What Is Warehouse Inventory Management?
Warehouse inventory management is the process of tracking, organizing, packing, and shipping products in a warehouse. This is a crucial function of all types of eCommerce businesses, as the organization of your inventory makes high profitability possible.
Having a repeatable process for your warehouse inventory is necessary to achieve these objectives. If you haven’t mastered your own warehouse’s process yet, you can use the following as a launchpad:
- Develop a floor plan that shows all the areas where products are stored. Whether a product was received, unloaded, or shelved, your staff should know exactly where to find products at any time. Having an electronic record of each product's SKU number and UPC code helps a lot.
- Have a system to monitor inventory at all times. Using warehouse inventory management software or an inventory cycle count are both viable strategies. Be sure to use an inventory management process that suits your business needs.
- Maintain an efficient means of order processing. While some businesses only sell through their brick and mortar storefront, others may also sell through a wholesale marketplace or eCommerce software. This is also referred to as an eCommerce platform. The important thing is to make sure all sales channels talk to each other so orders are not duplicated or lost between systems.
- Update your inventory levels or use a perpetual inventory system to handle it automatically. Whether you take physical counts of inventory or have an automated process in place, this maintains a streamlined flow of goods in and out of your warehouse and reduces dead stock.
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4 Key Elements for Multiple Warehouse Inventory Management
Calculating all the details needed for one warehouse is already a big responsibility. Read more about what is warehouse if you're just starting.
As you can imagine, overseeing numerous warehouses is exponentially more complex. That’s why a powerful strategy and appropriate software is essential in managing multiple warehouse inventories.
Here are four important elements of handling multiple warehouses:
- Detailed Demand Planning
Demand planning is the science of ensuring your warehouse can process all of the goods your customers are buying. It is best done in tiers; once for your business as a whole, and once for each warehouse. Demand planning is a critical element of managing multiple warehouses effectively.
By forecasting demand trends and ensuring your fill rate is high, you can keep your customers happy and minimize stock-outs. An order management system also helps you keep track of customer orders and ensure they are fulfilled promptly. Ask your warehouse managers to report demand trends periodically, which you can then use to forecast overall trends.
If necessary, consider expanding your leadership team by posting a warehouse manager job description. This can be made easy by including an appropriate warehouse manager salary. Also take a moment to learn more about different types of warehouse jobs.
- Using Supply Chains to Your Advantage
Managing a supply chain is one of the most challenging aspects of eCommerce. It’s easier to position your business for success when you know how to leverage some elements of your supply chain.
Do you sell a machine part or product that’s hard to get outside a specific import market? Use route management to plan how you’re transporting said good. Instead of sending multiple trucks to the same port, have one driver pick up all the parts and bring them to a central warehouse. Then workers from your satellite warehouses can pick up stock from the central warehouse.
- Distribution and Replenishment Planning
Having a plan to replenish inventory across all your properties is crucial. Watch your monthly sales report closely to see which products are generating high profits and moving a lot of units. Use this information along with a reorder point formula to determine your par level. At this point, it would also be helpful to use the inventory days formula to calculate how long products stay in storage.
- Daily Inventory Optimization
A skilled team and the best software are not replacements for daily inventory optimization. Make sure that none of your warehouse labels are fraying, missing, or out of date. Double-check the validity of your computerized reports by performing periodic manual audits.
For example, your inventory management software may show a product case in the warehouse, but you haven’t seen it. After a quick check at the product’s assigned shelving, you see the case sitting on the floor instead of the shelf. You can put the case where it belongs and refresh your team on the importance of proper shelving.
Top 2 Warehouse Inventory Management Software Features
Warehouse inventory management software is any computer program that supports the efficient storage, tracking, control, and replacement of inventory. Using a program instead of manually recording each inventory change allows you to work efficiently.
Here are the two most important warehouse inventory management software features for daily needs:
Your inventory control process relies on clear systems from the moment new stock is brought to the warehouse. This includes product tracking, minimums and maximums, bin and shelf locations, and serial numbers.
The goal of inventory control is to keep stock levels just right. If you have too little or too much inventory, you’re missing out on happy customers and growing profits.
Shipping and handling can be a hassle, but it's important to keep your inventory updated. You need to update your stock quantity when it’s time to pack and ship a product. The simplest way to do this is by using a barcode scanner that reads a SKU number.
After product pickers find the right product, they scan the barcode on the box and bring it to the packing station. After a picking session is complete, the barcode scanner is reconnected to a dock that talks to a computer program and updates your total inventory.
Some warehouse inventory software companies provide barcode scanners; others do not. It’s important to ensure the scanners you buy are compatible with your warehouse inventory system.
How to Choose the Right Warehouse Inventory Software for Your Small Business
There are more options to choose from in warehouse inventory software than any previous time in human history. You can maintain stock, reduce the likelihood of human mistakes, save time, and lower costs all in one program.
There are seven factors to be mindful of when choosing software:
- Compatibility. Most warehouse management software is compatible with different computer operating systems, but it never hurts to check. It’s wise to note the details of your ERP accounting system (see what is ERP system), hospitality software, hospitality procurement software, and any other tools your business uses daily. You can also explore the benefits of ERP if you haven’t used this kind of platform yet. All of your programs need to communicate with one another to maintain accurate data and operational efficiency. If you can’t easily identify that your existing and new software will sync, it’s best to choose a different platform.
- Ease of Use. Usability is paramount when it comes to getting work done. Some software providers offer a free trial, which is great for testing the interface. Other companies offer white glove onboarding for a premium customer experience. If you feel something is missing or prefer a different end-user experience, don’t hesitate to continue shopping around.
- Inbound and Outbound Flow. High-performance software simplifies the handling of inbound and outbound flow. This refers to the daily movement of pallets and packages in and out of your warehouse. From your main dashboard, it should be easy to see items pending delivery, picking and packing, and shipping.
- Inventory Management. Small business warehouse inventory management software makes finding the right product a breeze whenever you need it. You no longer need to wonder if space was created for a new product; the software will show you the shelf and product information at a glance.
- Labor or Workflow Management. If you are looking to cut the labor cost, labor or workflow management software is a good option for your business. This software optimizes your workforce by assigning tasks more efficiently and avoiding duplicated work. Just like the same order shouldn’t be packed twice, there’s no need for two people to have the same assignments. Take the time to learn more about your desired software’s labor-management capabilities and see if it fits your business.
- Reporting. Reports in your chosen software should be easy to generate and simple to read. Most software programs provide reports for any inventory KPI like case counts, confirmed orders, deliveries, and returns. Ask a company rep about the features you need if they aren’t available in the demo.
- Cost. If you’re just starting an eCommerce business, your budget will look different than a business that’s been profitable for five years. Choose a small business warehouse inventory management software at an affordable cost.
Simple Warehouse Inventory Management
Striving for simple warehouse inventory management procedures is attainable, but it does require knowing your business’s needs. Here are four strategies to implement:
- Know your customers and their greatest needs. It seems deceptively simple, but if you prioritize the customer’s experience, you’ll keep the cash flow coming from day one. If you find multiple online reviews that share similar feedback about a product, take it into consideration. Buyers rave when businesses go above and beyond to take their opinions seriously.
- Maintain clean records at all times. Updating your inventory, perfecting reorder points, and keeping a lean warehouse are essential.
- Use relevant software and tools when it makes sense to do so. Tools create leverage for your daily work to focus on higher-impact tasks. Take time to understand the costs and benefits of any tool you’re considering, as this pays off in the long run.
- Strive to offer your customers the best service possible. People love businesses that go the extra mile and are often willing to pay more for their products and services.
Warehouse Inventory Excel Template + Columns to Include
If you’re just starting with inventory management techniques, there are numerous ways to accomplish your goals. For example, you can get started with a warehouse Excel spreadsheet or Google Sheet to keep track of all products and their details.
There are at least 13 columns you should have in your warehouse inventory spreadsheet, including:
- Stock received date
- Product category
- Product name or title
- Product format
- Unit cost
- Starting inventory
- Received inventory
- Ending inventory
- Inventory usage
- Sales over a given period
- Cost of goods sold (COGS)
- Inventory usage in dollars
Some businesses might also want to include an inventory audit and inventory forecasting in their spreadsheet. These help keep track of product levels and ensure that you have the right amount of stock on hand at all times.
The Key Links Between Inventory Management and Warehouse Management Are...
It’s best to think of inventory management as an indispensable warehouse management function. Purchasing, storing, and shipping your products efficiently contribute to a profitable warehouse strategy.
With that in mind, what are the key links between inventory management and warehouse management? Let’s break it down into five categories:
- Clear Third Party Communication
Any eCommerce business owner understands the importance of getting stock in on time. Your inventory and order processing suffer unless you have well-defined processes in place.
Assign docks and drop-off times to delivery drivers. This offers your warehouse staff enough time to stage pallets and put away new stock. You can also assign point staff for your third-party partnerships. This prevents communication disparities and simplifies who oversees what goods and when.
- Onsite Organization
One of the biggest reasons warehouses struggle with efficiency is that they don’t have area flowcharts. If boxes end up in random locations, this is a sign your facility needs better warehouse organization.
Warehouses usually have clear locations for storing and packing items. Issues may crop up if a defective or returned product doesn’t have a clear destination. Each item brought into your warehouse should follow an established path, which is called one-way flow. Products that fall outside the normal flow should also have their procedure.
Adding floor stickers, signage, and color-coding simplifies the implementation of one-way flow. It also helps third parties understand where to find goods that are ready for shipping. For an example of what this looks like, take a look at our inventory management process map.
SKU rationalization can also organize onsite warehouse operations. Conduct inventory analyses to determine which stock to eliminate and which items you should prioritize.
- Inventory Control and Product Segmentation
As a business owner, you likely know which products of yours are bestsellers. Unfortunately, that doesn’t mean your warehouse is organized accordingly. Your warehouse needs both inventory control and product segmentation to run smoothly.
Inventory control is the process of watching which products move and which don’t, so you can make informed decisions about maximizing profit. Product segmentation–sometimes called ABC inventory analysis–is the process of categorizing goods into these three groups:
- Winners: Profitable products that drive 80% or more of your sales.
- Chasers: Semi-profitable products or products that create an inventory variety.
- Losers: Products that aren’t generating profit or are rarely sold.
Winners should be in all of your warehouses, regardless of where they’re located, because they’re proven to succeed. Chasers should be kept in warehouses close to relevant markets; otherwise, keep them at a minimum.
Losers should be pared down at each warehouse until you have none left. It’s important to eliminate dead stock whenever possible, so your business only sells profitable goods.
- Order Management
Successful order management is the only part of the warehouse management process flow that customers care about. Proper inventory management sets you up for delivering orders on time.
A key part of managing orders well is assigning some staff only to pack and ship, if you’re able to. This reduces the likelihood that a worker accidentally packs the wrong item or overlooks an item entirely. Costly mistakes like these can lead to returns and losing customers.
- Distribution Accuracy and Speed
Whether your products ship from a warehouse to a distribution center, retail outlets, or directly to customers, speed and accuracy are essential. Use a supply chain management or warehouse management system to receive automatic notifications when your products are delivered to destinations.
Are You Feeling Organized?
Utilizing warehouse inventory management software that fits your business instills confidence in everyone. You can delegate daily responsibilities with the peace of mind that computers are crunching the numbers for you. Using modern-day tools like this also prevents overwhelm--a common risk of busy environments. Leverage the right software to boost your business’s results.
Frequently Asked Questions About Warehouse Inventory Management Software
What Is the Difference Between IMS and WMS?
- Inventory management systems (IMS) are typically used to track inventory levels, stock locations, and reorder points. They may also include features such as cycle counting (see cycle count definition) and inventory forecasting.
- Warehouse Management Systems (WMS), on the other hand, are designed to optimize warehouse operations. They automate tasks such as batch order picking, putaway, and stock replenishment.
Are ERP and WMS the Same?
No, ERP and WMS are not the same. While both systems aim to streamline and optimize business processes, they serve different purposes. Enterprise resource planning (ERP) software focuses on managing enterprise-wide data and resources, while WMS specifically manages warehouse operations.
What Software Do Warehouses Use?
There is a lot of software available to help warehouse managers with their inventory control and order fulfillment processes. Some of the most popular software programs used in warehouses include:
- Inventory Management Software
- Order Fulfillment Software
- Warehouse Management System (WMS)
- Material Handling Equipment Software
- Transportation Management System (TMS)