The Ultimate Guide to Inventory Warehousing and Management
Did you know that the cost of global inventory discrepancy each year is $1.1 trillion? When you consider that 43% of businesses don’t even have a way of managing stock, it’s a shocking statistic.
Suppose you want to reduce overhead and make sure you’re keeping on top of your supply chain. Then take a look at this guide to inventory warehousing and omnichannel fulfillment system.
What Is Inventory Warehousing?
Inventory management is where an organization maintains its stock of goods on hand. That includes anything from keeping track of current stock to incoming shipments.
The goal of a warehouse inventory management system is to keep inventories accurate. That way, businesses can meet demand without running out too soon. If you run out of stock, you’re stuck..
Why do We Need an Inventory System?
Inventory systems help us manage our stocks better than we could otherwise. They allow us to:
- Keep track of what you currently own
- Track incoming orders
- Make sure you never run out of stock
- Know when to restock
- Manage sales promotions
- Maintain accurate records
Warehouse and Inventory management are vital parts of every business operation. Without them, businesses would struggle to stay afloat due to inefficiency.
Inventory Warehousing and Shipping Options
There are many different ways to store and ship products within a company. Some companies use their trucks and drivers to transport their products around town. Others may hire outside contractors like UPS or FedEx to do this work for them.
Besides the location of the delivery address, much comes down to warehouse use—some act as a fulfillment center, others as a distribution center. So let’s take a look at these two and see how they compare.
Fulfillment Centers
A fulfillment center is a larger center that occurs earlier in the shipping process. These centers usually contain one or two locations per country or state. They have many pickers working together to fulfill customer orders.
FCS often offers free pickup services and provides drop-off options for returns. FCS allows retailers to cut costs associated with transportation and packaging materials. Yet, because most people live far away from major cities, it’s not enough to use these alone for large-scale.
Orders picked at fulfillment centers then move to smaller distribution centers. From here, the parcel ships to the customer.
Distribution Centers
Unlike FCs, distribution centers operate closer to customers’ homes. DCS consists of several small buildings located near residential areas.
Because DCs tend to be close to home, they also make sense for local retail stores. Amazon opened thousands of DCs across the world to serve on a local level during the pandemic.
Wholesale Distribution Centers
These are like DCs but have higher volumes of traffic. WDCs get chosen by manufacturers that move large quantities of goods between factories. Because of this, they have special handling procedures and storage methods. Some examples include refrigerated units, temperature-controlled environments, and even dry ice.
The Effects on Store Inventories
Whether an online or brick-and-mortar store, the back-end inventory plays a pivotal role. It ensures the shop front is well-stocked and supplied with accurate detail.
Thanks to modern technology, this isn’t as much of an issue for online stores. There are fewer processes in the supply chain. But discrepancies can still occur with poor management.
Yet, for brick-and-mortar retail or industry use cases, extra steps cause issues. Add to that the new hybrid businesses that don’t run on separate inventories. You have a recipe for disaster without the correct procedures for inventory warehousing.
How to Choose a Good Inventory Software Solution
Choosing the right software solution for your needs will depend upon your demand. Suppose you’re a small business looking for an easy way to manage all aspects of your inventory. You may suffice to start with an Excel spreadsheet. But for more intensive use cases, you’ll want to use a dedicated solution like the one at https://www.fulfilltopia.com/.
Inventory management systems come in various forms. The best system depends on what kind of data you wish to track and the processes required. Examples include desktop solutions, cloud-based applications, or mobile apps.
Desktop Solutions
Desktop solutions are the easiest way to get started managing your inventory. They allow users to enter information into spreadsheets, databases, or other programs.
That can work fine when you only need basic tracking capabilities. But that process becomes harder when you add extra features like RFID and automated replenishment.
Cloud-Based Applications
More expensive than their desktop counterparts, cloud-based solutions offer many advantages. Cloud-based solutions store data remotely so that you never lose access to your records. You can share them among team members without having to worry about security issues.
Mobile Apps
Mobile apps are becoming more popular due to their ease of use and accessibility. Many companies now have smartphone apps that let users view real-time updates. These give customers and staff alike product availability and order status—these apps sync with backend servers.
Another great feature about mobile apps is their portability. Nowadays, phones can read QR codes and barcodes. Some companies are even innovating in the blockchain space for inventory management. In doing so, they use QR codes linked to the blockchain to track every step in the supply chain.
Warehousing and Inventory Management are Core to a Successful Supply Chain
As seen above, inventory warehousing plays a vital role in any supply chain. Without proper planning and execution, warehouses become bottlenecks. Here, products sit waiting until they reach consumers, leading to a reduced margin.
Keep reading for more content that’ll help you keep track of your workflow!
