A Closer Look at Inventory and Warehouse Management

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Inventory management and warehouse management sound very similar and are commonly confused or used interchangeably.  It is important to understand the differences between the two types of system management, as with a greater appreciation of their distinction the benefits of each system type will become clearer.

What is inventory management?

When looking at inventory management alongside warehouse management, one of the key differentiating components of the systems is their level of complexity.  Inventory management systems are generally simpler and provide more basic information.  Data provided can include information on items, cost, locations, delivery and shipping records, this system, for example, can provide you with the total stock quantity in a particular storage area.  This is real-time information, updated constantly.  It provides a sound record of previous and present transactions.  Another component that makes inventory management systems simpler is their setup time as in comparison it takes substantially less time to install and initiate this system into a business than a warehouse management system.

So how is warehouse management different?

Conversely, warehouse management systems are predominantly more complex.  These systems enable a business to manage an entire storage area.  They can provide detailed information on the storage systems inside of a location.  For example, if a location has 30 storage bins of the same item, a warehouse management system can be a vital tool to managing these bins. In this situation, an inventory management system would only be able to tell you the overall quantity of this item in the location.  It could not manage all of the items inside all of the bins in the location. However, a warehouse management system would not only help with allocation of an item, but provide information on checking in, moving, packing, shipping details, and replenishment.  Additionally, this system can work harmoniously with large-scale warehouse machinery such as forklifts and conveyor belts.

The two types of systems also vary on the level of control they can provide.  Since inventory management systems provide a broader tracking approach, they just provide the amount of an item you have in stock.  Warehouse management systems allow for control over specific locations, where inventory is allocated, and how to find it again at a later time. Hence, warehouse management is able to impart details on inventory control, not just quantity like inventory management.

Which is right for my business?

There is often a sizeable overlap of a company’s warehouse management with the rest of the company’s operations.  The system intertwines information of production supply, sales, delivery, and quality control aspects. The overlap into so many operational departments makes it a very important system for a company’s logistics.  Inventory management serves as a tool in stock location management but does not integrate into as many other departments. However, more advanced warehouse inventory management systems are evolving to change the level of integration they have in a company’s logistics.

Inventory management and warehouse management both have similar qualities that aid and assist a company in the overall management of their business.  However, the significant difference is that warehouse management has a detailed and often in-depth focus on the inner workings of a warehouse. Inventory management provides a more general and broad overview of inventory quantity. Both can be an essential component of a business and it is valuable to understand their place and benefits.

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Melanie - Unleashed Software

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.

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