Warehouse and inventory management are often seen as interchangeable practices. There are however, subtle differences in the complexity of the two management systems. Inventory management deals with physical stock keeping units, while warehouse management looks after entire storage systems within the warehouse structure.
Inventory can account for a substantial portion of a company’s assets. Management of inventory is an essential function that coordinates and controls the flow of goods required for a business to operate. Whether they are products purchased for resale, the components a manufacturer uses for its work-in-progress or finished goods it sells.
Inventory management includes the ordering and reordering of stock, maintaining accurate inventory records, forecasting demand and ensuring sufficient safety stock is available for production or supply.
An efficient inventory management system records and tracks goods on a quantity and value basis. Documenting and reporting on the inwards/outwards transfer of goods through the supply chain. In a nutshell, inventory management deals with the amount and cost of the stock.
Although fundamental, an inventory management system is just one part of warehouse management, therefore, it is much simpler. It provides important details of the total amount of stock held in a specific storage location at a given point in time.
In contrast, warehouses are considerably broader in scope than that of inventory management. The aim of effective management is to efficiently control the movement of materials within the warehouse operations.
These operations include the receipting of inwards goods, tracking, stacking and stock movement through the warehouse. Warehouse management is also responsible for ensuring shelving or pallet racking is in place to secure the stock, maintaining the quality of goods while in storage and until they are shipped out of the warehouse.
In addition, warehousing undertakes the task of securing hazardous materials and removing or disposing of any damaged goods.
A Point of Difference
The most significant difference between the two systems is the human factor. While inventory management focuses only on product or stock, warehouse management involves managing employees and shipping or freight personnel operating in the warehouse environment.
Warehouse processes cover the internal movements and storage of materials within warehouses. Workplace health and safety practices are vital to these operations requiring employees skilled in the operation of machinery used to stack and store inventory, such as hydraulic trolley jacks or forklift trucks.
The one common factor in both is the increasing adoption of technologies such as inventory management software and radio frequency identification to improve efficiency and accuracy for put away, picking, movement and replenishment of stock.Topics: inventory management, SaaS, stock reorder, supply chain, warehouse management