As a wholesale distribution business, inventory management is the backbone of your company. To be successful, you need to maintain inventory levels to meet demand, you need to be able to find, pick, pack and ship the right product to the right customer, and you need to provide excellent customer service and fast shipping times. However, inventory management is only one piece of the puzzle. A properly organized warehouse equipped with the right tools is the first step to efficient inventory management. This is especially important in today's market when dealing with competitors like Amazon which have the resources to efficiently manage multiple, large distribution hubs with robotic technology, WMS systems and a plethora of staff. However, even with limited resources, small businesses can still optimize their warehouse space to provide the same efficiencies as larger businesses to get product out the door quickly and efficiently. In fact, small businesses are frequently able to modify processes to increase efficiencies a lot quicker than larger organizations. Below we have included some tips for warehouse organization for your small business.
Software. First and foremost, without the right inventory management software, your warehouse will never be as efficient as it could. Inventory management software will help automate the receipt, picking, packing and shipping of orders and allow your business to easily keep track of inventory in real-time. This eliminates the need for manual inventory checks when trying to find product for an order. With inventory and accounting ERP software, not only is inventory information available in real-time, but your company can also manage all accounting, sales, invoicing, purchasing and customer service processes as well. Inventory availability is visible while creating a sales order so that you never sell product you don’t have. If product is out of stock, the system will show you if it’s currently on back-order and if not, allow you to create a purchase order directly from the sales order.
Organization. A lot can be gained from proper warehouse organization. Whether you operate a small or large warehouse, easy access to products is key to picking more quickly and efficiently and getting orders out the door to customers faster. Some tips for better warehouse organization include:
- Store fast-selling, high-volume items closest to packing stations and organize items front to back based on sales volume and frequency.
- Ensure the warehouse is clean and organized so that product is easy to find and always in the right spot.
- Consider color-coding aisles and racks to easily find product and make sure to label all bin and shelf locations for better inventory management. Going one step farther, when dealing with multiple, similar products or products that come in different sizes, consider also implementing color schemes to help differentiate items.
- Implement proper processes for the receipt and put-away of inventory items. Employees should be able to check your inventory management system for a real-time update on inventory availability – without having to waste time wandering the warehouse looking for product.
Picking. Each warehouse will have a different picking method depending on the size of the warehouse, the number of employees and the types of products being sold. To help with warehouse organization, your business needs to find the right picking style. This decision will help dictate warehouse layout including bin and shelf locations and aisle set-up. The most common picking styles include:
- Individual/discrete picking where one employee picks an entire order, one line at a time, before moving onto the next order.
- Consolidated/batch picking where an employee picks the same SKU for multiple orders. Consolidated or batch picking can further be broken down into zone and wave picking.
Barcode Scanning. The use of barcode scanning technology can also aid in the picking, packing and shipping process. With wireless barcode scanning, warehouse staff scan items at the source during the pick process to quickly identify any pick errors and to verify the product on the order while picking and packing items into boxes. Mobile picking also helps to reduce travel time in the warehouse by directing employees to pick based on the most efficient path according to bin and shelf locations. Lastly, wireless picking enables the use of electronic pick slips which reduces paper consumption and the element of human error associated with manual, handwritten pick tickets. Even if you do not have mobile picking, barcode scanning in the form of verification scanning set-up at packing stations helps to double check against the order and reduce any packing errors.
Packing. Verification barcode scanning aids in the packing process and reduces the risk of sending customers the wrong product. Inventory management software with shipping functionality allows warehouse staff to pack-to-container to accurately track specific product. Integration with shipping carriers reduces the need to manually re-enter customer and tracking information and provides tools to rate shop to find the best shipping price.
Even if you don’t have a lot of resources, your small warehouse can still compete against larger distribution companies with the right systems and processes in place. A well-organized warehouse space with the right back-end inventory management and accounting software reduces the need to hire additional staff when order volume increases. Maintaining and managing one software solution is much cheaper than paying more salaries and having to manage employee training, benefits, etc.