6 Golden Rules of Warehouse Management
Warehouse management is an underrated profession. A complex system responsible for controlling the flow of goods to and from the warehouse, it’s an essential aspect of business that doesn’t get the fanfare it deserves.
Ask any Warehouse Manager and they’ll say that it’s not an easy job. Managing a major part of the supply chain process, Warehouse Management planning requires serious oversight and planning.
If you’re feeling overwhelmed in your warehouse management operations, then keep on reading. In this post, we’ll be discussing the six rules you can use to ensure that your warehouse operations are managed effectively.
But before we begin, let’s lay down some ground work.
Warehouse Management: The Essentials
Warehouse management is the process of managing warehouse operations. Controlling and optimizing the warehouse to facilitate the entry of inventory till the point they’re consumed or sold off.
The warehouse management process, in the most simplistic manner, looks like this:
Inventory arrival at warehouse > Inspection of inventory > Warehouse storage > Packaging, weight > Delivery to end user or distributor from the warehouse.
For the most part, this map is an accurate representation of warehouse management, provided it’s done right.
When managed poorly, warehouse management can turn into a literal nightmare. The following range of issues just scratch the surface:
- Inventory spoilage.
- Redundant processes and systems
- Reduced productivity processes
- Unorganized team processes
From a business perspective these things are counterintuitive. While in many companies, they might become a part of the “process that works”, it just means that businesses are just getting profit, but not growth.
In order to get the most out of your warehouse management operations, you need a mix of technology and an organizational overhaul.
While the going may be a bit tough when you first start out, the end result is more optimized warehouse operations that save time, money, and energy.
Seeing as how a lot of people confuse inventory management and warehousing with each other, we feel that it’s important to outline the differences between the two. Once we’ve done that, we can move on to highlighting the golden rules for warehouse management.
Inventory and Warehouse Management: The Differences
While industry parlance would have you believe that both these terms coincide with one another, there are differences that set them apart entirely.
Inventory management is the process of managing the product that’s being stored in the warehouse. Within inventory management, all the aspects from suppliers to customers management, stocking, and product sales are being managed.
Warehouse includes the journey of those products within the warehouse, how they are packaged, organized, and then sold off the consumer.
With that little caveat out of the way, it’s time we discuss the golden rules of effective warehouse management.
1. Auditing Your Warehouse
To get the best out of the warehouse, first you need to see the current state of your warehouse.
This is a general step in fixing problems with everything. You need to see where the problems lie.
Through conducting a 360-degree audit of your website, you will be able to map out your plan of action, and then execute it.
For example, if you feel that there is irrelevant space being occupied by certain items that might as well be stacked on top of one another, you can make a note of that to see the best way in which those goods can be stored.
From optimizing storage space, labor, equipment, to keeping all the items in check, to minimizing the overall costs of storage – all the parties involved in the warehouse must work together towards the game plan.
The best way to start about conducting the audit is to ask questions:
- How long will the inventory stay in the warehouse?
- What types of goods are being stored? Do they spoil early (perishable) or are non-perishable?
- Is the warehouse overloaded, or has too much free space?
- Is the warehouse optimized for efficiency?
- Are there any hygienic issues associated within the warehouse?
- Is the warehouse process in accordance with workplace regulations?
These are general questions to ask. You can come up with more when you’ve performed the audit of the business yourself.
2. Maintain Contingency Stock:
Almost every warehouse manager is aware of the importance of keeping safety stock present at all times. With the economic situation as it is today, then having these safety stocks is even more crucial.
Safety stock is, as the term suggests, stock that acts as the extra stock in the event the stock runs out. Consider it a Plan B of sorts for warehouse management.
Nowadays, it’s tough to accurately forecast demand and supply metrics. Because of this, it’s important to create a buffer. This ensures that when your product demand is high, you can have a ready stock available to be used just at the right moment.
In certain situations, it might make sense to reduce the safety stock to zero (perishable items), but if you’re selling non-perishable items that don’t follow FIFO and LIFO, then it’s imperative that you keep a buffer stock.
The end-goal is to maintain product levels that are neither too much nor too low. This helps you keep a stock that’s accurate to the target service levels as well as avoid overstocking.
3. Controlling Product Flow
The warehouse exists as a transit point in the life of a finished good. To a warehouse, products are always coming and going, and it’s the job of the warehouse manager to ensure that the flow of products is as seamless as possible.
To make such a flow a reality, warehouse managers need to see which layout works in the best manner. While storage is a major concern, managers need to ensure that the flow is good as well.
But there are certain situations in which a manager has to decide between storage and flow. With such fast-paced activity going around, it’s best to maintain a balance between both the mediums.
4. Focus on Quality Control
What if the product shipped to the customer is the wrong product?
In order to keep product quality maintained at all levels of the organization, there exists a need to ensure that the right product is shipped to the right consumer.
You see, employees within the warehouse are always slumped with labels, packaging, picking, and shipping the right products to the end-user.
Oftentimes, the labels and packaging get mixed up and a wrong product is shipped to the end user.
In such a scenario, it’s the job of the manager to ensure that the products are labeled, packaged, and sent off to the right consumer.
If the product is already shipped to the wrong customer, then you need to ensure that it is returned and placed in the warehouse as quickly as possible to avoid clutter.
5. Warehouse Management Systems (WHMS):
Business efficiency is the main forte of any warehouse management processes.
The best method to ensure that business efficiency is ensured at every level of the organization is through business process automation.
In warehouse management, BPA involves the introduction of warehouse management systems. Essentially software designed to speed up warehouse processes, WHMS acts as a buffer between logistics, inventory, and warehouse processes. This makes sure that all the inventory coming in and out of the warehouse is managed correctly.
With such automation, businesses can improve their warehouse operations and be seamless in their reporting.
Overall, this gives you more control over your warehouse operations, improves lead management, and helps managers to focus on important business functions.
Taking cue from the example of WHMS, there are plenty of other benefits of using technology for Warehouse Management. The primary amongst them is gaining the advantages of analytics.
Warehouses regularly use analytics software to track the progress of their operations. This helps businesses make more informed decisions in their day-to-day workflows. In addition to that, you can check current stock, track financial objectives, and check whether or not you’re meeting objectives
With warehouse management operations, the going is indeed tough. However, with the right planning and goal-setting, you can improve your warehouse processes tenfold.
In this post, we discussed the six rules of efficient warehouse management. We hope that this article gave you a starting point in improving your warehouse management processes.
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