Effective warehouse management is the backbone of any supply chain operation. It involves organizing and controlling various processes like storing products, picking, packaging, and shipping.
Optimizing all these processes leads to smooth product flow, fast order fulfillment, and enhanced customer satisfaction. Today, businesses are implementing warehouse management systems to optimize the entire warehouse process.
What is Warehouse Management​?
Warehouse management includes all the processes involved in running smooth warehouse operations. The processes include receiving goods and products, sorting and keeping them in their allocated locations, and fulfilling customer orders.
The main aim of warehouse management is to perform all these processes in an organized and efficient manner to enhance customer satisfaction.
Warehouse operations are invisible to customers. However, they plan an important scene behind the success of any business and build customer trust within the brand. Most warehouse operations are either done manually or are automated.
In the case of manual warehouse operations, the staff has to pick up the ordered product, pack it, label it, and hand it over to the shipper. However, certain automated warehouses have now adopted some automation equipment, such as conveyors and cranes, to increase operations efficiency. There are even some warehouses that are fully automated to reduce human errors.
Warehouse Management is Quite Important for the Following Reasons.
1. Speed
Pick and pack are two important aspects of warehouse operations. However, they consume a lot of time and can delay the order fulfillment process.
Warehouse management keeps things in their proper location so that staff can easily identify the ordered products and pack them. This increases the speed of the order fulfillment process and customer satisfaction.
2. Space
Analyzing order patterns or customer behavior is one of the primary tasks of warehouse management. For example, businesses can optimize storage and deliver products faster by keeping the most demanding products at the front.
How The Warehouse Management Process Works?
The warehouse management process involves a series of steps, which are listed below.
1. Receiving Goods
The first step involves receiving goods from suppliers or manufacturers. The warehouse staff verifies the products and inspects their quality to ensure they meet specific guidelines.
The warehouse updates the inventory records and finally keeps all the products in their designated locations. The staff stores the products based on their size, demand, and type.
2. Inventory Management And Tracking
Proper inventory management is crucial to avoid overstocking and out-of-stock issues. Most businesses use warehouse and inventory management, barcode scanners, and RFID to track goods and products.
3. Order Processing
It involves picking up customer orders from the storage place, packaging them properly either by padding or boxes, and then labeling them with the right branding.
4. Shipping
The packaged and labeled ordered product is handed to the shipper. It is further dispatched to the customer. The transportation mode is chosen depending on the product type, traffic, weather conditions, and many more factors.
5. Reverse Logistics
Some customers don’t like the product they receive because of defects or sudden changes in their minds. They then like to return the product. The returned products are then restocked in warehouses.
What Is A Warehouse Management System?
Earlier, pen and paper were used to receive goods in warehouses and manage inventories. Even today, many small warehouses utilize this method to manage their entire operations. This leads to errors and decreases the efficiency of warehouse operations.
The warehouse management system is software that simplifies warehouse operations right from the moment a good enters the warehouse to the time it leaves.
Types Of Warehouse Management System
There are mainly three types of warehouse management systems, and each has its advantages and disadvantages. Let’s discuss them below.
1. Standalone Warehouse Management System
It is an independent WMS solution that focuses only on warehouse operations, such as order management or inventory control. This type of WMS is best for small and medium enterprises.
2. Cloud Based Warehouse Management System
You can access cloud-based WMS through the Internet and can manage warehouse operations by staying anywhere. This WMS is hosted on the cloud. It is suitable for businesses that have multiple warehouse locations. The organization has to pay based on their usage.
3. Integrated Warehouse Management System
It is a warehouse management software that connects with other systems like Enterprise resource planning, Transport Management systems, and Customer relationship management. Thus, a business can manage various important tasks and performance using one software solution instead of multiple software. The software provides accurate stock levels in the warehouse and updates the finances or inventories automatically.
Thus, this type of WMS reduces human mistakes and increases the efficiency of the business. It is suitable for large enterprises that handle large volumes of inventories.
Choosing the right WMS will depend on your business objectives and the specifications of your warehouse. But WMS can truly help fulfill orders at a fast rate and at a low warehouse cost. It will even help the warehouse staff to be more efficient in the warehouse storage space.
The Role Of WMS In Modern Warehousing
There are various important roles in the warehouse management system, which are listed below.
1. Improves Operational Efficiency
The warehouse management system can streamline various warehouse operations. The software reduces errors while picking and shipping goods and eliminates unnecessary work. It even shares data with a transport management system for optimized transport service. It even connects with Enterprise resource planning for financial tracking.
2. Reduces Wastage
Do you have perishable stocks in your warehouses? Warehouse management systems can identify which items need to be picked up first and delivered to the customers. This identification can reduce wastage in a business.
Again, the software determines the most effective use of the entire warehouse space. It organizes products based on their demand and size and even suggests efficient pathways for warehouse staff and machines.
3. Real Time Inventory Visibility
A warehouse management system can give real-time visibility of products from their entry inside the warehouse to their movement within and outside the warehouse by using barcodes, sensors, or RFID. The software thus improves demand forecasting and product traceability more effectively.
4. Improves Labor Management
A warehouse management system can forecast labor requirements and assign tasks to the right employees based on various factors, such as their skills. The software even creates a safe and organized environment for the workers.
5. Enhance Customer Satisfaction
A warehouse management system can improve order fulfillment and make fast deliveries. This improves customer satisfaction and brand reputation in the market.
Difference Between warehouse management​ and Inventory Management
Warehouse Management
- It encompasses all the warehouse operations, such as storing goods, moving them, picking them up, packaging them, and shipping them.
Inventory Management
- It focuses on tracking and controlling the stock levels inside the warehouse.
How Efficient Warehouse Management Boosts Productivity?
1. Optimizes Warehouse Layout
An efficient warehouse makes the best utilization. It uses ABC analysis and keeps the most demanding items in the packing area or easy-to-access locations. It organizes all the products in a way that warehouse staff can easily find them and package them.
2. Fast Order Fulfillment
It uses barcodes, various sensors, or RFID scanning to pick up goods inside the e-commerce warehouse for accurate order picking.
3. Inventory Tracking
Proper warehouse management does real-time inventory tracking and prevents overstocking and out-of-stock issues.
Key Issues Faced in Warehouse Management
Managing a warehouse comes with certain challenges, which are listed below:
1. Inventory Shrinkage
Inventories can be reduced inside the warehouse due to theft or damage, which can reduce a business’s profits.
Solution: The use of advanced CCTV surveillance inside the modern warehouse and AI-powered analytics can detect an inventory shortage or unusual employee behavior. High-value items should always be kept in a secured area inside the warehouse.
2. Inconsistent Order Fulfillment
If warehouse staff make mistakes in picking, packing, packaging, or labeling, this can adversely affect customer satisfaction or decrease brand reputation in the market.
Solution: You can use voice-directed picking of items, which will guide warehouse staff in picking the right products.
3. Seasonal Fluctuations
Warehouses may face challenges scaling their operations during peak seasons or holidays. This may result in shipment delays or customer dissatisfaction.
Solution: Adoption of warehouse automation management systems or mobile robots can scale warehouse operations according to demand.
4. Complexity To Manage Multiple Channels
When a business manages inventories across multiple channels, i.e., marketplaces or third parties, it adds challenges in inventory management or ecommerce fulfillment.
Solutions: A business should invest in a centralized inventory system to provide real-time visibility of the products.
Conclusion
Effective warehouse management is essential for any business as it reduces costs, tracks inventories properly, and improves customer satisfaction. Businesses should adopt advanced technology like WMS, robotics, and AI to reduce errors and improve the efficiency of warehouse operations.
AAJ Supply Chain Management
