Many benefits can arise from adding extra warehouses such as reduced shipping costs by adding new warehouses closer to customer locations, added storage capacity where extra warehouse space may be needed, warehouses for specific purposes that can simplify warehouse management to contingency plans to alleviate risk, such as if one warehouse is taken out of service business can continue. However, realising such benefits means overcoming a set of new warehouse management challenges. In this article, we look at the top five challenges that arise from managing multiple warehouses and how to overcome them.
Inventory management difficulty increases
Managing multiple warehouses adds a layer of complexity to inventory management. However, by having a sound inventory management system that increases visibility to inventory stock enables your business to distinguish between items stored in different locations, choosing the most appropriate location to receive supplies, and fulfil orders according to stock levels.
In addition, it is important to standardise procedures where possible to streamline operations. This can be particularly difficult if already established warehouses have been added. So, having an inventory management solution that has a central view of all inventory stock can help reconcile the different systems to allow consistent service to customers.
Inventory analysis difficulty increases
It is critical to understand supply and demand and how they vary by location, so optimum inventory stock levels are maintained in every warehouse. Variations can occur at each warehouse site due to factors such as local preferences of carrying out business, customers in a particular location, to seasonal trends.
Ability to utilise warehouse space and layout optimally
Getting more warehouse space to house a growing business and storing inventory stock is important. However, it’s not just about the amount of space – it’s about optimising that space to avoid unnecessary labour and reduce inefficiencies. Best practices review each warehouse facility and keep fast-moving and high-selling inventory closest to transport processes so forklift drivers aren’t constantly travelling to the farthest reaches of the warehouse.
Failing to review processes
A major challenge is whether to keep existing practices that a business may feel comfortable with and applying a one-size-fits-all to a newly added warehouse – or making changes. A common pitfall of not being open to new technology and automation can actually hinder processes and cause warehouse management chaos. An inventory management system that is agile and scalable can keep up with a growing business and ensure that processes are organised that can be integrated with other technologies. Take for example barcode technology and radio frequency identification tags that can reduce or eliminate the problem of a pick ticket or other documentation having to pass through multiple hands. Increasing efficiency, reducing errors and integrating with inventory management system are important aspects to consider when reviewing processes and thinking about new technology.
Linking with eCommerce
Customers wanting to buy your goods online only want to know if they are available and when they will arrive. It pays to have an inventory management system that enables you to have monitor stock levels across each sales channel so that you can deliver on time and in full, no matter which warehouse stock comes from.
However, fine-tuning this area can come into play with supply and demand. By having full visibility into inventory stock, it can be managed to be stored in advance in other warehouses closer to online buyers’ locations to decrease delivery times, increase customer satisfaction and the expectation of online buyers wanting prompt delivery.
When manufacturers don’t have full visibility to their inventory stock, they face a major problem of either inconveniently running out of stock or carrying excess stock. This ultimately can decrease cashflow while increasing expenses. Warehouse management is challenging enough such as optimising stock levels, managing the physical space and tracking orders and deliveries. However, when growing companies add additional warehouses, those challenges are multiplied. A better way of keeping on top of the challenges of managing multiple warehouses is to invest in better inventory management systems that can provide automated and integrated solutions to streamline processes, that can help increase efficiency and accuracy, decrease costs and ultimate positively impact your bottom line.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.