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Warehouse Inventory Management

Managing a warehouse and the inventory within is a skillset that takes a long time to pick up. It requires the warehouse manager years of experience to understand the intricacy and complexity of running a warehouse operations well. The objective of the warehouse manager is to increase the productivity and throughput of the operations team while controlling the operating cost. You have to ensure the operations is efficient (in terms of time and cost) and effective (in terms of safety and accuracy).

Managing of warehouse and inventory can be split into 4 different sections, namely inventory, manpower, resources such as MHE, storage medium and system, and processes.

Inventory Management

1. Good organization (upkeep) of goods or stock keeping units (SKU)

Inventory has to be kept in an orderly fashion within the warehouse. This will help the picking process, ensuring stocks are placed according to the record in the system.

2. Control of the inventory inbound and outbound from the warehouse

Warehousing is a part of the supply chain. To ensure a smooth movement of the inventory into and out of the warehouse, planning has to be done diligently. This will prevent congestion at the loading bay area.

3. Ordering/reordering of stocks, inventory accuracy maintenance, demand forecasting

For certain operations, this aspect is done by the Inventory team. It is a separate standalone team from the operations. Overstocking will translate to inventory holding cost whereas understocking results in stock out situations. Therefore, it is critical that the inventory level is maintain correctly.

4. Track high runners. Place them in accessible locations

Based on Pareto Analysis (ABC Analysis), 20% of the SKU account for 80% of the total movement within the warehouse. The remaining 80% of the SKU are not as fast moving. Thus, these 20% of the SKU are recommended to be store in accessible locations, near to the docking area.

5. Regular Cycle Counts utilization for better inventory accuracy

Operations will do regular checks on batches of inventory to ensure the physical stocks tally with the records in the system. This is a good practice to ensure that the discrepancy are detected early and kept to a minimum.

Manpower Management

6. Allocation of manpower into various teams

As a warehouse manager, you need to deploy your staffs correctly. Basing on the workload, you have to allocate the correct headcount into the inbound and outbound team. Incorrect manpower allocation will result in either the staffs having to overwork or too many redundant manpower not being utilized.

7. Ensuring shift times are studied

Complexity comes in when there are shift work involved. Some warehouse operations work with multiple shifts, and resource planning is an important aspect of management. Planning is required to ensure that sufficient manpower are allocated during the peak hours. It is advisable to transit to different teams during the off peak hours.

8. Workplace safety

Accidents may happen in the warehouses. This can be due to forklifts movements or mishandling of pallets. Installation of blue back light on forklifts is an example of minimizing accidents.

9. Employee tracking

Recent technology allows tracking of employees in the enclosed area using triangulation of signals. Exact locations of the employees contribute to the safety aspect as well as potential study of the productivity of manpower.

On another note, non-employees can be detected and tracked. This will minimize unauthorized traffic within the warehouse.

10. Manpower movement flow

Human movement pathway need to be marked out during the planning phase. This contributes to the safety aspect of the operations. Visitors to the operations need to follow the designated pathways as well.

11. Training you people

Newcomers have to undergo training in order to familiarize the work scope as well as the environment. Regulars need to go through regular refresher training as well periodically. This will reinforce the correct process steps.

Resources Management – MHE, Storage Medium, System

12. Storage medium

Inventory profile is an important aspect operations need to consider during the warehouse management. Putting the inventory into incorrect storage medium will result in under utilization and space wastage. For example, the operations has a lot of bulky items which are unable to fit into conventional pallet racking. These pallet racking locations will be a wastage.

13. Quality management system

A good warehouse management system needs to be in place to manage the inventory ideally. The management will have real time visibility and information of the stock on hand and their status by tagging the goods.

Another good reason for investing in a quality warehouse management system is to have good control on the inventory. This will eliminate delay in status updates (for example from picking status to outbound status) as well as minimization of good loss (inventory shrinkage).

Operations will focus on the first 3 sections most of the time. Process management is normally overlooked or neglected. However, this section plays a critical part to manage the warehouse operations effectively. Continuous Improvement Projects (CIP) can be implemented here to streamline the processes to be more productive.

Process Management

14. Optimize warehouse design by reorganizing warehouse layout

It is a great opportunity to perform a warehouse layout design study for greenfield projects. This allows the warehouse designer to create ideal layouts. Reorganizing the layout provide the chance for operations to improve the utilization of the warehouse space for existing sites.

15. Smooth inventory flow

Flow of products have to be smooth in the warehouse. For example, if there is crisscrossing of inbound and outbound goods without clear segregation, there will be a chance of outbound team to stage and outbound the incorrect shipment. Another example will be congestion and bottlenecks at certain locations of the warehouse due to heavy traffic. Again, this will reduce the efficiency of the operations.

16. Cater room for receiving

Ample space should be provided for inbound staging (some call this speedbay). After unstuffing of pallets from the trucks, warehouse assistants need time to go through the documentations and tally against the physical stocks. If there are insufficient space, either the warehouse assistants putaway the pallets for storage to clear the area in a rush, or the loading bays will be congested with incoming pallets from other trucks.

17. Quality control

After the packing process, quality control should be in place to ensure the orders are picked and packed correctly. Picking accuracy is important, and quality control can be a second line of defense to ensure this is in place. This will benefit the reduction of returns in future due to incorrect picking

18. Picking Strategy

Right picking strategy needs to be in place (Single Order, Batch Picking, Zone Picking, Wave Picking), depending on how the outbound orders are dropped as well as the warehouse layout. For example, if the warehouse is huge, the area can be segregated into zones and each picker can be assigned to each zone to fulfill the picking. Another common practice is to consolidate the orders according to different time periods, before the picking starts. This is called wave picking.

19. Prioritize picking

There are certain operations which differentiate the time-critical vs non time-critical orders. Operations need to retrieve these special orders for prioritize picking. For others, the differential factors can be highly valuable customers vs normal customers.

20. Housekeeping

After every operations, it is a good practice for the warehouse team to perform housekeeping. 5S methodology (Sort, Set in order, Shine, Standardize and Sustain) can be emphasized and mandated. This will provide a clean and uncluttered environment.