The warehouse is the heart of inventory management where all goods receipted in, handed to production and shipped out must be in perfect synchronisation, no stream accumulating more than the others. This is not an easy task and requires a lot of attention to detail and dedication, and it becomes even more difficult where multiple warehouses are concerned. The key to successfully managing inventory in multiple warehouses is to understand the challenges they present and how to overcome them. So, let us dive in and consider these challenges.
Unsurprisingly, inventory management is the top challenge of managing multiple warehouses. Incoming and outgoing inventory must be in sync so that neither one accumulates in excess, creating an imbalance that either results in too much stock, or a stock-out situation which is perhaps more detrimental. This challenge grows with the inclusion of more warehouses in the company’s line-up and therefore must be expertly managed to ensure business continues as usual.
An inventory management system is needed that allows for distinguishing between inventory in each location to enable separate management, while also existing as one, holistic system providing a bird’s-eye view of all sites. The key here is visibility where each site’s inventory and production lines are visible and manageable. Shipping from and to the appropriate locations is then possible, guaranteeing that no matter what errors are evident in inventory, an excellent customer experience is maintained.
Inventory understanding and analysis
With different geographical locations of warehouses, new factors are introduced such as different demographics, seasonal effects and cultural influences. These changes can have a significant effect on established sales patterns and so must be anticipated to ensure supply and demand remains consistent. This is certainly a challenge, and the key to anticipating these fluctuations is proper analysis of inventory across the different warehouse locations, appreciating each as a unique entity.
Utilising space efficiently
We all know that the larger a space is, the more it will be filled and the messier it can become. This applies to the warehouse too where the more warehouses the company owns and the larger they are, the more difficult it is to maintain order and create an efficient layout that promotes optimal filling of customer orders. When we speak of optimal filling, we mean filling orders accurately and in the least amount of time, which drives down the cost of goods sold (COGS) and maximises the bottom line. Even small savings in time and efficiency through a well-laid out warehouse can account for significant savings long-term.
Redundant or lack of technology
The barcode or better yet, RFID tag, have been designed to accurately and quickly encode and relay data such that items can be tracked at any point in the process. These new technologies replace the pick ticket and can create a far better workflow and reduce warehouse inefficiencies. When companies maintain their traditional systems of manual data entry, checking, sorting, picking and loading, they open themselves up to increased error rates and significant time wastage.
Another drawback of not embracing technology is the difficulty associated with integrating the warehouse with the inventory management system as a whole. For the full benefits to be reaped, the entire system must be integrated in such a way that one, seamless interface is presented to the customer, despite several branches being managed behind the scenes simultaneously.
Multichannel and warehouses can become a nightmare for your eCommerce strategy without the correct inventory management support. Customers visiting your webstore are not concerned about which warehouse has sufficient stock and the logistics of packing and sending their purchases, they simply seek a straightforward, accurate system where they can make a purchase immediately and can be guaranteed to receive their item in an acceptable timeframe. Creating this experience for them does not come without the appropriate software and correct management initiatives to support it. The webstore must display real-time stock counts that reflect what is in inventory in the warehouse(s) and available to be shipped. Failure to do this can result in stock-out situations which can severely affect brand loyalty and eventually, the bottom line.
Managing multiple warehouses in conjunction with the webstore can even be conducted in anticipation. When eCommerce sales data are assessed and sales trends are analysed, it is possible to anticipate future sales and ensure stock is appropriately directed to warehouses in advantageous locations to maximise sales, decrease shipping times and expenses.
Of course, none of these challenges can be overcome without a stellar inventory management software system and operational support. Once the ideal system is implemented, hopefully, it will only be small wrinkles that require a bit of ironing out.
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.