The Essentials of Warehouse Management for every Businessman

Generally, manufacturers, importers, wholesalers, and business owners use warehouses (commercial premises) to stock their goods and products until they move on to the next step of the supply chain. If you belong to this league, then you will also need a well-stocked and well-maintained warehouse. However, simply earmarking an area to store your products is not enough. Instead, having a functional warehouse that operates smoothly and efficiently on a day-to-day basis is key, and can go a long way in building your business. So, knowing how to manage your warehouse the right way is very important.

What is warehouse management?

Organising and monitoring everything within your warehouse is regarded as warehouse management. As a part of this, you will also have to ensure that every operation and task house takes place optimally, so that you are able to run an efficient outfit that utilises its resources in the best way possible. The process of warehouse management involves:

• Placing the inventory in order
• Maintaining equipment
• Keeping track of stock coming into the warehouse
• Managing orders, packing and shipping them on time
• Streamlining the working of the warehouse
• Making use of warehouse management software to automate the process
  

How to arrange your warehouse to maintain efficiency

To start with, arranging your warehouse and the inventory in a systematic manner will help you lay the foundation of a sophisticated, tidy warehouse. Keep the following points in mind when you undertake this task.

Step 1: Plan the layout for your warehouse

Ensure that you have enough space to store your inventory, as well as space for staff to move around and complete their duties without any obstacles. Divide your warehouse into separate segments to provide enough room for each function. Create areas for receiving new stock, unpacking stock, storage, segregating obsolete inventory, and to hold goods that are ready for shipping. You can create the layout of your warehouse demarcating these zones first and then implement it.

Step 2: Label the areas in your warehouse

Once you chalk out the areas for action and devote separate zones for each, you must label each shelf, wall, and inventory based on your master sheet. Use alphanumeric combinations to label bins, shelves, rows, sections, etc. in your warehouse. So, if you manufacture ladies garments, for instance, then on a macro level label and segment the western wear section away from the ethnic wear section. Then, under each section divide the racks based on sizes, colours, designs, and price, and further label each bin or shelf accordingly.

Here are a few things that you should remember when you are arranging products in your warehouse.

• Remember to arrange products based on their sales frequency and price. This will help you know which products are fast moving and which do not sell at all. Also, it will make it easier for you to access products that are in demand
• Keep an eye on your current system to check if it is truly working for you. Conduct a review every three or six months to promote business efficiency. If your current system has flaws or is proving to be complicated, then rearrange the warehouse. Additionally, conduct regular spot checks to ensure that your employees are following protocol
• Keep a watch on seasonal inventory and ensure that you aren’t left with substantial stock once the season ends. This will raise your costs and affect your revenue
• Adopt what is known as the first-in, first-out (FIFO) approach. Herein, the goods that enter the inventory first will exit it first as well. This is extremely relevant for seasonal, as well as perishable produce
  

How to manage incoming stock

Firstly, have a system to determine when you need new stock and the time that this stock will take to reach your warehouse. Based on this information, you will have to plan and manage the entry of stock into your warehouse. Here are a few tips that will help you do this efficiently.

• Dedicate a separate zone in your warehouse where you can receive new inventory each time a shipment reaches you
• Assign a team to take stock of the new items as soon as they reach the warehouse
• Segregate the items to ensure that there is no misplacement or incorrect labelling for your inventory
• Place relevant barcodes or other tags that you use to identify and mark your stock
• Lastly, remember to make entries regarding your new inventory in your computer system so that you have accurate stock details
  

Warehouse fulfilment strategies

Defining pathways will help you get started with warehouse management, but you will need to adapt and strengthen your warehouse as your business grows to ensure maximum efficiency. Take a look at the warehouse management fulfilment strategies that will help you fulfil orders with ease, and maintain a high level of customer satisfaction as well.

1. Devise an advanced picking system

You can ensure better speed and greater customer satisfaction by streamlining the warehouse picking system. When you are fulfilling multiple orders each day, you cannot afford to have warehouse members look for each product and waste time in picking products. Thus, you must define a productive picking method to improve speed and efficacy.

• Assign one picker to pick products from the same batch, row or shelves. This way he will pick all products at one go
• Alternatively, assign one picker or a small team to pick products from a particular zone only. For example, you can assign a team of 2-3 people to the leather belt zone, another group to the denim zone, etc., if you are a garments manufacturer. This way, each group can pick their respective orders without waiting for the other to finish
  

2. Plan a systematic packing process

Choose box sizes based on the items you have in your inventory. It is good to have 3 to 5 different boxes as per your product list. However, optimise packaging usage and do not go overboard as it will only increase your inventory cost. Apart from the size, the packaging material should be of good quality. Here, you should look into materials that can carry the weight of the product, survive extreme weather conditions, and are sturdy and resistant to breakage during loading, unloading or while in transit. This will also help reduce returns.

3. Understand the shipping process

When you are ready to ship the products, weigh the package and print the right label, which has the invoice and shipping details. Stick this on the package and mark the order as ‘Shipped’ on the pertinent sales channel or the Order Management System. Then email shipping confirmation and tracking details to the customer manually in case you are not linked to software.

4. Define par levels

This is the minimum amount of stock that you should have for each type or variant of a product. So, if black kurtas are in greater demand than floral printed ones, set a higher par level for black kurtas. This will ensure that you always have sufficient stock to cater to the demand, and will also help you limit inventory costs by maintaining the optimal supply. When you know how much inventory you need, you can prevent over-stocking and keep costs low. Similarly, based on your par level and the time it takes to receive new inventory, decide how often you need to place an order to replenish stocks. In fact, you can also automate the process if possible, for better results.

Monitoring warehouse performance

Now that you have taken a step towards optimising all your operations in the warehouse, you will also have to keep a track of the performance and working of the warehouse in general. Here are the aspects that you need to track actively.

• Gauge efficiency by measuring the time it takes once you receive a new order to locate items, pack them and ready them for shipping. Also measure the delivery time taken by the courier partner to ensure that you are choosing the right service provider
• Examine the rate of return of products by customers. Analyse the reasons for return and frequency, and then identify warehouse shortcomings that contribute to this. Then, make changes to your system to eliminate the root cause. For instance, in cases where the wrong item is delivered, analyse picking accuracy by tallying the total number of orders within a timespan along with rate of return percentage
• Find out the order lead time for your warehouse with respect to several segments in which you fulfil orders such as international orders, domestic B2B orders, omnichannel orders, and e-commerce orders. Here, remember that the lower the lead time the better your order fulfilment ratio will be
  

Warehouse management systems

These optimisation and warehouse management efforts promise smooth functioning on a micro level. However, as your operations grow, to ensure the same level of efficiency and accuracy, you must implement warehouse management systems to optimise functionality further. These systems:

1. Organise, document and track inventory
2. Introduce process accuracy at every level
3. Expedite daily operations

There are numerous warehouse management systems available in the market. So, decide on the type that you need based on the size and nature of your business and warehouse. Typically, the larger the warehouse and more varied your inventory, the more elaborate WMS you will need.

In addition, remember that WMS software can be configured to suit your requirements. For example, if you are catering to e-commerce vendors you will require different software as compared to someone who is catering to brick-and-mortar retailers. Additionally, WMS can also be designed keeping the products you deal with in mind. For instance, if you have a grocery warehouse, you will need different software as compared to someone who is managing jewellery inventory.

Benefits of warehouse management systems

• Offers better organisation as the software stores exact locations for every SKU and can also map the way for the picker if there is a need to find the product. - The software also suggests better allocation for the inventory, counting seasonal products and slow-moving variants
• Optimises operations by identifying each product via a barcode system, radio-frequency identification (RFID), and automatic identification and data capture (AIDC)
• Integrates the warehouse and inventory with all your customer stores, marketplaces, shipping partners, and other units
• Tracks the history of each action happening at the warehouse, which increases staff accountability
• The software automates the email process of sending shipping and tracking details to the customers, as well as placing orders for inventory that is running low
• The software generates timely reports to suggest warehouse performance metrics to you. It also gives suggestions regarding areas of improvement
  

Utilising IoT to enhance warehouse management

In order to ensure further improvement in warehouse performance, you can integrate Internet of Things (IoT) with WMS. The IoT data will manage the routing of your inventory from when it is picked up to the end point. This integration will ensure that you create a pull-based supply chain and stay away from a push-based supply chain, which is not driven by customer demand. You can retrieve the IoT data from sensors and devices or software that generate numbers showcasing what customers want. As soon as you integrate this with your WMS, you can improve product movement and project long-term growth for your business.

Financing warehouse management

Whether you are setting up a warehouse, defining pathways for movement of products and people, or improving upon weak areas by introducing warehouse management systems, don’t underestimate the role that sufficient finance plays in the process. To purchase the physical and software infrastructure itself, you may require money running into lakhs. Instead of putting off this expense for a later date, simply avail an appropriate loan to kick start warehouse management efforts.

With a Business Loan from Bajaj Finserv, you can avail up to 80 lakh within 24 hours at a competitive interest rate. Moreover, this loan is collateral-free and has a flexible tenor too. When you avail it using the Flexi Loan facility, then you can use funds from your total sanction in parts, as per your needs. Here, interest is applicable only on the amount you use and not the entire sanction. In addition, you can also choose to pay interest-only EMIs through the tenor, and repay the principal at the end to save up to 45% on EMIs. You can instantly avail warehouse financing by knowing your pre-approved offer on your Business Loan.

With this warehouse management information on your fingertips, make changes to your set up to eliminate inefficiencies, boost performance, and profits too.