The aim of any business is to be profitable and to increase customer interest and loyalty so that you build a brand and reputation that can stand the test of economic setbacks or changing times. This is achieved certainly by designing, manufacturing and marketing great products or services that ooze quality and appeal, however, it is also achieved by getting the basics right every time in terms of having perpetual stock, smooth and efficient processes and reduced order or lead times. It is at this point that inventory management becomes important. Here we will give you some tips on best practices so that your business and warehouse can be functioning in top shape.
Reconsider the way you receive, pick and deliver orders
A significant area of wasted time and effort is in the process of receiving, stocking, picking and delivering orders. If the process has not been well thought out, staff are sent walking all around a warehouse, retracing steps multiple times a day, looking for the correct products to fill an order accurately.
The warehouse floor plan is important as this dictates how long and how far employees must go to find products or ingredients for manufacturing or filling orders. It can be a blessing and a curse, depending on how it is structured. You should consider the most common orders or current projected sales and batches and structure the storage plan to suit so that the items that will be required more frequently are placed near the entrance and items that are hardly used are placed towards the back.
The way you pick the orders can also be considered for optimisation. Companies can use batch picking or wave picking to reduce the time spent filling orders. Batch picking is where groups of orders are picked at the same time to reduce multiple trips to the same location. In wave picking, the orders are broken down into their components and pickers are sent to zones in the warehouse where they pick a certain product in their zone for a wave of multiple orders. Meanwhile, their colleagues pick another product that is also common to multiple orders. The method chosen will be unique to each company and their products.
Cross-docking can be a useful technique to cut down on delivery times and the need for storage, particularly if you are a distributor. A truck with an incoming order from your own supplier arrives and is parked alongside your own transport waiting to distribute the product to the required stores or endpoints. Products are then simply transferred from one mode of transport to the other, negating the need for proper receipt and storage which significantly saves resources.
Inventory tracking and data acquisition
Inventory management is largely facilitated by accurate inventory data acquired from a custom-designed system such as Unleashed. This gives valuable insights into bestsellers, worst-sellers and what areas are chewing through a large amount of resources for little to no gain. The way in which accurate data is obtained is through the tracking of inventory from receipt all the way to point-of-sale. This can be done via barcodes or RFID tags which are fast and effective ways of tracking large quantities of products or components through the warehouse. So, what do you do with this data? Well, the sole purpose of obtaining this data is essentially ensuring that no item or product goes unnoticed, and the demand and sale of them provides a picture of customer demand as a whole, and how to meet this demand in the most efficient way. Therefore, better and more strategic decisions can be made quickly regarding sales and merchandising so that profits can be increased and waste or redundant items can be reduced.
Employee training and tracking progress
Inventory management is as much the responsibility of employees as it is of the warehouse manager and it is important to convey this message to your staff. Everyone should take ownership for their role in creating a lean and efficient operation that delivers accurately, every time. To do so, you may need to provide training or at the very least, a platform where inventory management is talked about and encouraged. It does not stop there however. It is important to also introduce heightened security protocols that allow the tracking of staff who deal with inventory. The benefit of this is two-fold. Firstly, if any staff require extra help or best practices are not being upheld, then extra training or encouragement can be given. However, on a more sinister note, it allows for the tracking of staff and any rogue inventory so that theft can be dealt with quickly, reducing the detrimental effect on the company.
Whether you are just at the start of your inventory management journey or you are a seasoned player, periodically reviewing what you do and how to optimise it further is of enormous benefit to your business.
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.