A warehouse's inventory is truly the bread and butter of its business. Successful inventory analysis is all about increasing your profit, decreasing expenses and looking for areas of improvement. Investing in these five solutions will make sure your warehouse's inventory never falls through the cracks.
1. Take advantage of automation with a warehouse management system
Some of the best warehouses rely on software solutions to maximize efficiency and productivity. A good WMS can help streamline fulfillment processes, according to Oracle. The company says the best WMS solutions provide organizations with three major benefits, including increased operational efficiency, greater control over costs and an improved customer experience.
Automating inventory tasks is a great way to bolster production and maximize profit. By eliminating human error, a warehouse won't ever have to deal with stockouts. Software can monitor inventory at all times and submit reorders as soon as inventory is low. Some systems even have the ability to forecast delivery times so warehouses have a head-start in scheduling shipments.
2. Conduct regular inventory analysis
Self-auditing your warehouse's inventory on a regular basis is a good way to make sure management is staying ahead of the curve. This means taking a good hard look at what you're doing, recognizing inefficiencies and making adjustments.
Set a timetable to improve those inefficiencies and create concrete goals. Return regularly to check on your progress in relation to the end goal and continue making improvements as needed.
3. Keep all staff updated on your inventory system
It's important that all staff be trained and have an understanding of exactly how the warehouse's inventory is meant to operate. This way, they can point out inefficiencies and resolve problems when they arise.
After all, warehouse workers are on the frontline of the business and the closest to the product. Training all warehouse workers on how inventory is meant to be managed will make sure standards are kept at a high priority. The more inventory experts, the better.
4. Layout optimization
Of course, the physical layout of your warehouse also plays a significant role in optimizing inventory efficiency. Though it might seem obvious, Shipbob recommends keeping your highest-selling inventory as close to its packing location as possible. These "golden zones" help workers pick and pack your greatest volume product at faster speeds.
Similarly, by storing frequently purchased items in close proximity, you save time and energy in the long-run. Whatever the most logical workflow for your warehouse is, that's the layout you need to have.
5. Sort your inventory according to the ABC method
The ABC method is a ranking system that sorts products based on turnover rate. It uses an 80/20 rule, wherein the system identifies the 20% of goods that account for 80% of the inventory's value. The items with the greatest turnover are in category A, whereas those with less volume fall into categories B and C.
This accounting-based method allows managers to rotate items into each category when necessary while also taking cost into account. The ABC method not only optimizes inventory, it also factors in product life-cycle and simplifies the supply-chain.