5 Golden Rules of Warehouse Management

Warehouse management is a complex system that aims to control the flow and storage of goods within the warehouse. A smoothly running warehouse contributes to the success of the supply chain whereas a poorly managed warehouse forms the weakest link across the supply chain, thereby affecting the sales, profits and growth of the business.

Any warehouse manager can attest that running a warehouse isn’t an easy job.  Being actively involved in all the operations demands a lot of effort, time and planning. If you’re struggling to efficiently run your warehouse or need to refresh your existing strategy, keep reading to see the five golden rules to improving your warehouse management.

1. Identify the objectives of the facility:

Warehouse owners and managers must make it a priority to identify the objectives of the facility as the foremost rule. Determining goals early on help in proper planning and execution of the warehousing activities. To run a successful warehouse, all parties involved in the business must share a common goal to maximize the usage of space, labor and equipment, maximize the security on all items, minimize unnecessary handling of goods and reducing the overall costs. Aside from these goals, warehouse owners also need to address important questions, such as

– What is the main purpose of your business?

– Who is your target audience?

– What types of goods do you intend to store perishable or non-perishable?

– Is your warehouse designed to optimum efficiency?

– What is the intended life of the warehouse?

Addressing these questions in the initial stage helps key stakeholders in predicting the magnitude of the triple constraints, scope, time and cost associated with warehouse management.

2. Maintain safety stock levels:

Every warehouse/logistics manager is aware of the importance and challenges that come with managing optimum safety stock. In inventory management, safety stock is the extra buffer added on the cycle stock to compensate for all stock outs. With the changing economy, it is very tricky to accurately forecast the demand and supply for any product. Safety stock mitigates the risk of backorders caused by invariability in demand and lead times. For most organizations, inventory is their biggest asset, which calls for effective planning of stock levels. Some managers believe in reducing their safety stock to zero which reduces overall productivity and causes loss to the business. The key is to maintain just the right amount of safety stock to meet target service levels and avoid stock outs

3. Control the flow of goods:

 To ensure smooth flow of materials in and out of the warehouse, the movement and storage needs to be strictly controlled. Warehouse managers need to decide on what layout works best for their facility and the direction of flow of materials whether it is clockwise, counter clockwise or straight. In a situation where a choice needs to be made between flow and storage, logisticians agree that flow should be given higher priority compared to storage. The reason behind this concept lies in the fact that day-in and day-out there is plenty of activity in the warehouse with workers and heavy equipment moving around. It is advisable to not compromise on the aisle space for the sake of holding stock.

4. Maintain quality control:

 When pickers pick the items off the shelves, process the order and move it to the shipping station, it is important that they verify the right item and quantity is being shipped. Packers at the shipping station spend all day packaging the products and putting the right labels on them. They generally don’t have the time to go over the order and confirm the items. Care must be taken at the initial stage and the right order must be shipped every time. In case a wrong order is sent to the shipping station, the items must be immediately returned to the respective shelves to avoid clutter and shortcoming for the next orders being processed.

5. Use the right software:

 The most critical factor in the success of the warehousing business is achieving maximum efficiencies, improving performance and managing the supply chains. Integrating latest technologies and implementing the right Warehouse Management Software (WMS) can increase productivity, improve warehouse operations and satisfy customers. This will also generate higher ROI and streamline the warehouse functions. The right software will act as an interface across the entire supply chain and enable easier flow of information between the warehouse, vendors and customers. WMS will also transfer accurate data to the accounting database and eliminate manual errors in keeping a check on inventory control. Some of the essential features to look for when choosing a WMS include back-office integration with purchase orders and inventory control, ability to provide real-time inventory updates, future growth scalability, labeling complaint, E-commerce and advanced reporting capabilities.

Incorporating the above principles in your warehouse management:

– Will give you a better control over your warehouse,

– Better control leads to smoother operations and improvement in overall performance.

– This, in turn, will help managers shift their focus to the customers and achieve higher customer satisfaction.