How to manage Inventory in Warehouse effectively

Managing inventory accurately and effectively is one of the most important areas for any manufacturer or trader, as efficient inventory handling provides you and your customers with utmost satisfaction. Further; proper inventory ensures that you have powerful planning and productivity. There are numerous benefits of proper inventory management. In this blog we will suggest how any business can manage inventory in a proper way through various strategies.

Why Is Inventory Management Important in any Business

For longevity in any business Inventory and stock, management is one of the most fundamental building blocks. If your inventory is properly organized your rest of the process in supply chain management will fall in one proper place. Poor inventory handling may risk you with out of stocks, overstocking, mis-picks, or miss shipments.

Powerful Warehouse and inventory management is key for any business. example – Mis-picks result from incorrect pick lists, disorganized shelf labels, or just a messy warehouse in general. Mis-shipments are a direct result of mis-picks at the beginning of the inventory process and are also a result of a lack of quality control procedures.

Out of stocks and overstocks occur when a company uses manual methods to place orders without having a full grasp on the state of their inventory. This is not a good predictor for inventory forecasting and results in too much stock or too little.

All of these mistakes will not only cost you money but also cost you in wasted labor spent correcting the mistakes later. When you don’t implement management tools, your risk of human error mistakes goes up by the minute. And your customer reviews and loyalty take a negative hit as well.

Follow a Process for Handling Inventory: 

There are various inventory management processes including six sigma, lean manufacturing, Kaizen, etc. These processes help you to manage a proper flow of inventory in your business. say for example,

• Kaizen is a Japanese philosophy that means continual, incremental improvement. KAI = Change and ZEN = Good or for the better. This method of managing inventory illustrates f how Kaizen can be used to remove MUDA (waste) from processes, in this case, the process of inventory management.
• Six Sigma describes a set of techniques and tools for process improvisation. In 1980 engineer Bill Smith from Motorola and psychologist Dr. Mikel J Harry co-founded this approach. The term comes from statistical modeling of manufacturing processes. A sigma rating is a percentage of defect-free products. Thus, Motorola set a goal of six sigma for its production target.
• Lean refers to a systematic approach for enhancing value in an organization’s inventories by identifying and eliminating waste of materials, effort, and time through continuous improvisation in order to achieve perfection.

There are many methods of undertaking an inventory process in a business such as the ABC method, Just in Time, Minimum order quantity based on the industry verticals a proper method for inventory program can be taken

Warehouse Management

Organizing your warehouse is another important task in order to ensure proper inventory management. A foolproof design of warehouse layout will enhance the efficiency for all your stock related task. Warehouse management is to control the day-to-day operations of a warehouse, such as the shipping, receiving, put-away, and picking of goods.

Powerful warehouse management helps you to fulfill and manage all your stocks, organizing will ensure you have zero inventory loss and shipping delays. You can use various methods in order to implement proper warehouse inventory management such as: Optimizing your warehouse layout, Storing inventory based on the turnover ratio, performing cycle counts regularly, enhanced warehouse security, proper labeling of items, reducing material handling, and finally with a time to time training to the employees.

Proactive planning and analysis offers you a detailed insight into setting up physical spaces properly, with materials and equipment in their appropriate places to facilitate item movement efficiently in the
warehouse.

Establishing an Inventory Measurement Program –

Implementing industry best practices for inventory processes, such as cycle-counting, helps you to
maintain high levels of inventory accuracy by engaging in auditing procedures. This helps to reduce safety stock levels and inventory carrying costs.

Utilizing KPI’s – key performance indicators via an inventory control system helps you to create efficient decision and strategies. You can also improvise on the cash flow, and reduce operating ocst with enhanced customer satisfaction with inventory performance metrics.

Implementing a powerful WMS – Warehouse Management System.

A WMS – warehouse management system implementation helps you with various benefits and advantages in controlling day to day warehouse operations. Warehouse software offers organization with guidance inventory receiving and optimizing the shipping and picking. Warehouse management software can be a stand-alone solution or implemented as an ERP software. WMS reduces the errors that may occur while handling the inventory through the use of barcodes and scanners it automates the operations.

The WMS available in the market also helps you to fulfill orders more quickly compare to manual tracing and management. Further, it also helps you to achieve paperless processes where your staff knows which duties to perform. There is end number of benefits of acquiring a WMS some of them include – Reduction in fulfillment time, inventory accuracy is increased, improvised customer services, powerful space utilization, warehouse productivity increase, lower labor cost, and so on…

Inventory Management through Materials Requirement Planning

Controlling inventory through MRP ensures you to factor in the supply, demand, and forecasting your inventory requirements. MRP helps you in planning efficient use of your resources in the purchase and scheduling process.  The three main goals MRP achieve is as follows:

1. MRP ensure materials are available for production and finished good are available for deliveries to the customer while maintaining minimum inventory levels.
2. Maintaining Buffer stocks lever as per company directions
3. Plan manufacturing and purchasing activities with delivery schedules, lead-times, and sales.

MRP (Material Requirements Planning) is also a computerized ordering and scheduling system used by manufacturing industries.  It uses (BOM) bills of material, sales orders, and forecasts to generate raw material requirements which are also called components or parts.  It also gathers new order requirements as they come in, presents shortages if they exist, and suggests ordering/building when necessary based on data gathered. Through MRP manufacturers effectively handle the raw materials and Work in progress.

Improvize Supply Chain Partner Interface –

inventory issues can be eliminated by reaching to new vendors and supply chain partners, engaging certified partners helps you to improve accuracy and customer service. By working closely together, companies and their suppliers can create highly competitive supply chains. Failing to collaborate results in the distortion of information as it moves through a supply chain, which, in turn, can lead to costly inefficiencies. Following steps can be taken to improve supply chain partners

 Step 1: Create and establish mutually the process and objectives of your business before initiating the supply chain improvement project.

Step 2. Prepare key to processes team selection, benefits sharing agreements, supply chain mapping, etc.

Step 3. integrating the joint supply chain improvement project within the respective organization will help you to reap commercial benefits.

The above list of strategies which we mentioned can be used with industry-specific ERP software as it offers you effective inventory accuracy for your business. At Globalteckz we offer you one of the leading Open source ERP software that includes various modules such as sales, Purchase, inventory, warehouse, MRP, and so on… Odoo warehouse management module allows manufacturers and traders to automate warehouse and shipping functionality. Odoo WMS module is created keeping in mind the productivity and quickness in operations for those manufacturers who are handling a large number of shipments every day. It decreases your process times, automates all your warehouse transactions, and provides you with complete traceability of all your operations.

For more information, you can contact sales@globalteckz.com