You are a business that sells goods. Whether you are brick and mortar or have an online presence, the items you sell need to be stored somewhere safe. That place might be a warehouse, distribution center, or fulfillment center. Even if you are leasing or renting a warehouse or have outsourced the logistical end of things, proper warehouse management is crucial to keeping customers satisfied.
Whether a warehouse is glutted on the latest and greatest technology is insignificant. The best warehouses are those that are operating efficiently and have motivated staff, low operating and logistics costs, and a higher profit margin.
How do you get that? First, you need to learn about warehouse management, including what it does and some of the best practices involved. Let’s begin.
What is Warehouse Management?
Did you know that companies are spending more than $350 billion every year on warehousing? When your warehouse isn’t managed properly, the cost of having one skyrockets. But when you invest in improving the warehouse and managing it more effectively, the overall cost can be reduced by up to 20%.
What does warehouse management mean?
Warehouse management is defined as the process of managing the operations within a warehouse. This sounds simple, but there are many aspects to the internal operations, including a wide variety of processes that occur. These processes include:
- Transportation management
- Warehouse inventory management and control
- Arranging layout of the warehouse for optimal efficiency
- Monitoring performance
- Order management, including receiving, packing, and shipping goods
- Purchasing and acquiring equipment
Primary Warehouse Management Processes
How you choose to manage a warehouse is often based on whatever it is you are selling. For instance, food and beverage delivery will prioritize appropriate storage within the facility and during transportation to reduce damage and spoiling. Larger retailers of home goods or clothing, on the other, will emphasize the shipping and handling.
Regardless of the objectives, however, every warehouse has the same processes:
1. Inventory Tracking
Warehouse management involves monitoring the amount of goods in stock. Utilizing barcode scanners, managers can check which stock-keeping units (SKU) are available. They can also track inventory by SKU for storage location and the status of orders.
2. Item Receiving and Storing
One of the best ways to simplify receiving and storage of goods is to use a warehouse management system (WMS). The software allows employees to quickly scan SKU barcodes and update the WMS in real-time. Then, anyone connected to the system can check the automated reports from anywhere.
The inventory can then be moved into short- or long-term storage. Whenever something is stored, it’s scanned a second time, creating a record of its location.
3. Pick and Pack
A pick list is used in warehouses for retrieving certain quantities of an item. The list will have every item the employee needs to find for the packers and contains information on the location, name, and SKU of every item.
Once the item is located, it goes to the packer, who puts every item in the right box to be shipped.
4. Shipping
Businesses can choose to send their products to customers by multiple shipping carriers, like DHL, UPS, US Postal Service, and FedEx. These carriers will pick up goods from the distribution center or warehouse to deliver.
Once the packaged items leave the warehouse, the WMS updates the customer and facility.
5. Reporting
Warehouse managers use software tools like a WMS to get a real-time view of stock levels, order fulfillment, and the number of shipments sent out on time. Reports can also be sent throughout the organization to assist with finances, HR, and to the enterprise resource planning (ERP) system for accurate inventory forecasts.
The 6 Best Practices in Warehouse Management
So you want to eliminate guesswork and redundant tasks within the warehouse. The best thing you can do for your warehouse is to use a warehouse management system (WMS) and integrate it into an enterprise resource planning (ERP) system. Not only does that get rid of any repetitive data entry tasks, but it can automate other essential processes and practices, like the ones we are about to describe below.
Once you have a functional ERP like SAP Business One, you can start optimizing your warehouse and make it more productive. After that, focus on these best practices in warehouse management:
1. Data Collection
Collecting data and managing it is essential to having a smoothly functioning warehouse. By setting up the right technologies, you can automate a vast number of processes within the warehouse and also reduce the number of human-made errors. This benefits you greatly. You will see more accurate representations of stock, as well as finances.
You can also utilize RFID systems and barcodes to eliminate the tedious logging of product movement around the warehouse. Align product identification with tracking processes, and you will also increase transparency, enabling unhindered movement.
2. Cross-Docking
If you have a larger distribution center or use LTL shipments regularly, cross-docking is one option for you. Cross-docking helps reduce the time spent shipping and handling and allows products to be transferred from one vehicle to the next.
Although cross-docking requires a significant investment to start, it is a wise move for larger enterprises that need to keep stock as fluid as possible.
3. Recording Stock Movement
If you want to manage a warehouse effectively, every step should be recorded and monitored. You might find that some steps are extraneous and can be altered to better suit the flow of the warehouse. Otherwise, you will be making unnecessary steps that could reduce turnaround time.
4. Dynamic Slotting
Instead of a batch process, consider slotting the warehouse by demand for an item. Dynamic slotting means that batches are matched with transit and shipping schedules, giving you more flexibility through the pick-and-pack process.
5. Health and Safety
One of the best things you can do for a warehouse is to focus on the health and safety of the employees. Make sure goods are secure, protocols are being followed, and that productivity remains high. You can do this with a WMS, which eliminates redundant steps. Continuously assess the layout of the warehouse to improve accessibility and minimize work-related incidents or damaged goods.
6. Advanced Shipping Notifications
Regular shipping and receiving is bound to hit schedule disturbances and delays. This impacts the efficiency of your warehouse and could upset relationships between you, customers, distributors, suppliers, and carriers. By implementing electronic shipping notifications, you can amend some issues caused by disruptions in the supply chain. You can also reduce labor shortages and wasted time.
Optimize Your Warehouse Management Today
Warehouse management is essential to running a warehouse and getting items to customers on time. If you aren’t managing your warehouse with the best practices, then you risk falling behind the competition. Get the most out of your warehouse by partnering with WiSys. Our intuitive Agility WMS integrates with the SAP Business One ERP, so you can leverage your warehouse with more ease and stability. Give us a call today to learn more about what we can do for you.