Your firm’s average inventory carrying cost should be around 20 percent of the total cost of goods. Inventory carrying costs refers to the total of all the outlays related to storing unsold goods. These costs include depreciation and warehousing costs.
Most companies end up incurring massive inventory carrying costs due to weak warehouse inventory management approaches. That’s why proper warehouse inventory management practices can have a major impact on your company’s total profits.
Are you stuck trying to find your way around warehouse inventory management? You’re not alone.
Most companies often struggle to find a way around managing inventory. With this guide to warehouse management, you can now improve your warehouse inventory management. This will help you save on unnecessary costs.
Your Ultimate Guide to Warehouse Inventory Management
At the core of warehouse inventory management is the need for efficiency and effectiveness. Your business should not only focus on cost and time but also consider accuracy and safety. However, achieving a balance between efficiency and effectiveness requires a combination of strategies and tools to streamline your inventory management processes.
Warehouse inventory management involves more than the stock. It consists of managing employees within the warehouses and overseeing all the internal movements within the storeroom. Your inventory includes finished products, raw materials, work-in-process, and packaging materials.
The warehouse inventory management approach must encompass the process of storing and tracking all the goods inside a warehouse. Proper warehouse inventory management can have rewarding long-term benefits to the business.
Importance of Warehouse Inventory Management
Businesses that focus on the process of managing inventory derive a wide range of benefits in the long-haul. Here are some of them.
Proper warehouse inventory management enhances the accuracy of the inventory orders in a warehouse.
When managing warehouse inventory occurs in real-time, it’s easy to ensure that every item within the warehouse is accounted for with utmost accuracy.
Proper warehouse inventory management enhances order and structure. Firms that embrace well-defined warehouse inventory management practices achieve an unmatched level of organization.
This makes inventory easily accessible and safe. It also enhances the order fulfillment process, which keeps your clients satisfied.
According to the Bureau of Labor Statistics, there were more than 9,000 non-fatal accidents involving forklifts.
Most of these accidents in the warehouse occur due to the failure to utilize best practices. However, warehouse inventory management emphasizes effectiveness in the inventory management process, which improves safety.
Saves Time and Money
Proper inventory management processes can help you save both time and money. Most firms lose both trying to undertake recounts each time they restock.
Warehouse Inventory Management Tips
It’s clear that inventory management is all about cutting down costs and time by doing things the right way. Here are some of the tips you can utilize to optimize your inventory management.
Have a Clear Spacing Plan for Your Warehouse
Most businesses prefer renting out warehouse space. In such cases, every inch counts. One of the best ways to keep your warehouse fully utilized is to plan your area.
If you take your time to plan your warehouse area, you’ll rarely run out of space. You need to consider adequate space for both human and machine traffic. Planning your warehouse will also minimize accidents and enhance efficiency.
Train Your Teams
No matter how well you space your warehouse, if you don’t invest in employees and training, you might incur losses due to human errors. The key to minimizing such errors and the consequent losses is to train your employees.
This should include training your staff to ensure better handling of equipment. Training should also focus on professionalism and work ethics.
Invest in Quality Machinery
Forklifts are by far the most essential equipment in a warehouse. You need to move, haul, or pick large inventory from one point to the next. You need to ensure you choose the right type of forklift to best suit your needs.
It’s also vital to invest in reliable forklift batteries. These batteries keep your forklifts running at their best.
Always ensure that you inspect your forklifts regularly to ensure proper functionality. Checking your batteries’ discharge can help you estimate its lifecycle. The approach also minimizes lost time due to stalled forklifts.
Consider Labeling As a Matter of Priority
Clear labels can help keep your warehouse orderly. You could start by putting clear stamps on anything within the warehouse. The approach helps to identify products and inventory quickly.
You can use manual labeling or consider barcoding. Such practices help to ensure the cataloging process is comprehensive.
Your warehouse inventory management process will only succeed if you have logging systems in place. These systems exist to ensure that all inventory in and out of the warehouse undergoes proper tagging.
Consider Cross Docking
Some products require storage in the warehouse before transit. However, you also have the option of using cross-docking to cut costs and minimize space.
Cross-docking involves the offloading and out bounding of raw materials on receipt. The transfer in such cases from one truck to the next occurs without needing to store such stock.
For most companies, cross-docking eliminates the need for extra warehouse space. This is especially useful when you want to minimize congestion in the warehouse.
Enhance Safety Standards
The introduction of technology in the process of warehouse inventory management will minimize the need for human input. However, you can’t completely eliminate the human factor. As such, you need to consider safety as a matter of urgency in the warehouse.
It would help to ensure that danger zones are well-marked. Further, you might need to spell out proper safety protocols that each employee must follow.
With the Right Tools, Managing Warehouse Inventory Is Now Easier
Your warehouse inventory management strategy should help you to save time and money whilst ensuring that your employees are kept safe. A well thought out warehouse inventory management system encompasses efficiency and effectiveness.
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