Once a company has grown large enough to need a warehouse, one will notice that inventory will begin to be misplaced, damaged, and just plan missing. This is a problem intrinsic to having a large inventory, and that is why companies large enough to need a warehouse should invest in warehouse inventory management software.
Both small and large companies suffer when products are lost from the warehouse. Large companies have massive amounts of products stored. This makes it more difficult to track objects that go missing or notice when small amounts are lost. It is estimated that as much as $15 billion a year is lost to employee theft.
In the absence of a good system for managing inventory, having a surplus of stock can become an issue. If stock availability cannot be verified, an order for additional stock might be made, even though stock may be available, but simply not in the correct location. If a company has no inventory software, someone who is unfamiliar with the items being ordered may fill the order incorrectly, resulting in unhappy customers.
There are tangible business benefits to warehouse inventory management software. Being able to tell customers exactly what you have in-stock breeds customer loyalty and appreciation and reduces refunds and misunderstandings. Also, inventory management software can reduce the amount of time it takes you to find items and fill orders, which greatly increases customer satisfaction.
If you want warehouse inventory management software to work, you will need to conduct inventory counting to double check numbers. This procedure differs with each company. Some companies follow this procedure monthly. Other companies do inventory on a quarterly basis. Certain stores which are part of larger companies have surprise inventories. When this happens, the manager from a different store may conduct the actual count, or employees might be required to do inventory without any notice. When done this way, it decreases the chances of theft being hidden.
Any one of the problems detailed here can be the cause of significant profit losses if not fixed in a timely fashion. This is one reason warehouse inventory management software is ideal for helping to increase customer satisfaction, decrease lost and missing inventory and increase profits.
Product loss from the warehouse can be a big problem for both small and large companies. If you are unable to ascertain whether any of a product is still available, refills of that product may be ordered when it has actually just been misplaced. To avoid these situations as a manager, you need a warehouse inventory management software installed in your company. Another advantage with this software is that you can quickly find the items that your customers are asking. This will increase their satisfaction resulting in big business for your company.
Good inventory management is necessary for manufacturers and wholesalers to maintain their profits. Inventory management includes good warehouse administration skills, like implementing safety measures, cooling and cleaning, record keeping and pricing techniques. Lousy inventory management will leave you with large inventory on hand while you still find it difficult to fulfill the customer's orders.
Warehouse Administration:
Warehouse is the building which is used by a business (mostly a manufacturer, big exporter or wholesale supplier) for storage of goods. These are the key points to remember in warehouse management.
Safety: Safety comes first. With so much loading and unloading going on all the time, warehouses possess greater chances of accidents then any other workplace. Workers should be well trained, especially those who operate the machinery like forklifts. Rules and instructions should be followed carefully by everyone to avoid hazards like slipping or falling. Also install good sprinkler system and evacuation plan to help in case of fire.
Cooling & Cleaning: Warehouse is normally quite congested with stock piled up all over the place. Develop a good ventilation plan to maintain the air quality and save the workers from dehydration. Keep it tidy and preserve good working environment. All goods and inventory items should be properly stacked.
WMS: Warehouse management system is some software which helps in managing and controlling inventory at warehouse. WMS can make the job a lot easier if used efficiently. While choosing a WMS, out of many available at market, you should look at what suits your business more, also the usability of that particular warehouse management system.
Inventory Pricing: Setting prices for your inventory is a tricky business. Normally three techniques are used for inventory pricing, which are:
1.LIFO 2.FIFO 3.Average Method
You can choose any of the above method, though none of them has a real affect on your profits, but businesses maneuver around with these techniques to save tax, because the figure of gross profit changes with every method.
ECQ and JIT: ECQ model decides how much inventory you want to keep on hand. A good ECQ model should be able to avoid both, inventory shortages and inventory in excess. JIT helps in reducing the inventory to minimum. Goods and products arrive just-in-time when they are needed, eliminating the extra cost of storing that inventory.
Record Keeping & Physical Counting: All arrivals, departures, sales or purchases of inventory should be recorded. Physical stocktaking should regularly be scheduled on small scale, rather than calling the employees on off days and carrying out physical counting on annual basis. Forms should be available for workers and supervisors to fill every time they receive or dispatch some items. This will help in making your record more accurate.
Both George Purdy & Williamking are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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