Warehousing inventory and getting products to customers can be tricky business. Not only do products need to be received on time, they have to 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.
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.
No matter the size of your warehouse, storing your products efficiently is important. Efficient inventory management includes reducing unnecessary costs and eliminating dead stock.
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.
- 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.
Multiple Warehouse Inventory Management
Calculating all of the details needed for one warehouse is already a big responsibility (see what is warehouse if you're just starting). As you can imagine, overseeing numerous warehouses is exponentially more complex. That’s why having both a powerful strategy and appropriate software is essential to manage 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. Demand planning is best done in tiers; once for your business as a whole, and once for each warehouse. Ask your warehouse managers to report demand trends periodically, which you can then use to forecast overall trends.
Also take a moment to learn more about different types of warehouse jobs. If need be, consider expanding your leadership team by posting a warehouse manager job description. This can be made easy by including an appropriate warehouse manager salary.
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 part that’s hard to get outside of a specific import market? Use route management to plan how you’re transporting said part. 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.
Daily Inventory Optimization
Even a skilled team and the best software are not a replacement 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 that a product case is 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.
Warehouse Inventory Management Software
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 each day.
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 strong profit.
When it’s time to pack and ship a product, you need to update your stock quantity. The simplest way to do this is by using a barcode scanner.
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 brought to a computer where it 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.
Small Business Warehouse Inventory Software
There are more options to choose from in warehouse inventory software than ever before. You can maintain stock, reduce human mistakes, save time, and lower costs all in one program.
There are a few factors to be mindful of when choosing software:
Compatibility. Most warehouse management software is compatible with numerous operating systems, but it never hurts to check. It’s wise to note the details of your accounting software, ERP software (see what is ERP system), and any other tools your business uses daily. 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 smart to continue looking.
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 like something is missing or just 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. 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 profiting 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 some 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, so you can 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.
Warehouse Inventory Excel Template
If you’re just getting started 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 multiple columns you should have in your warehouse inventory spreadsheet, including:
- Date stock was received
- 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
Download BlueCart’s warehouse inventory list Excel template, which is also Google Sheets compatible.
The Key Links Between Inventory Management and Warehouse Management Are...
It’s best to think of inventory management as an indispensable function of warehouse management. 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 in-house point people for your third-party partnerships. This prevents communication disparities and also simplifies who is overseeing what goods and when.
One of the biggest reasons warehouses struggle with efficiency is 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 that’s brought into your warehouse should follow an established path, which is often called one-way flow. Products that fall outside the normal flow should have their own procedure, as well.
Adding floor stickers, signage, and color-coding simplify 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.
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 how to maximize profit. Product segmentation (sometimes called ABC inventory analysis) is the process of categorizing goods into these three groups:
- Winners: profitable products that drive your sales
- Chasers: semi-profitable products, or products that create 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 is only selling profitable goods.
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 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.