Warehouse Inventory Management Software: A Comprehensive Guide
Originally published on June 10, 2022 by Logiwa Marketing, Updated on March 3, 2023
Whether you’re a small operation, looking to expand, or are well-established with multiple warehouses, keeping track of your product, optimizing employee time and resources, and reducing costs are goals for any warehouse operator. There are so many options out there for warehouse inventory management software that it can be hard to choose the best one for your business.
Do you need an all-in-one system, or will stand-alone systems work? What about integration with other tools that you may already use? How much time will it take to build, train, and launch a new warehouse management system (WMS) and software?
Warehouse management software keeps track of the inventory and operations of an organization. To understand why your business needs a warehouse management system, warehouse inventory management software, and what is necessary to implement it, see the following informative guide.
Keep reading as we dive deep into the ins and outs of warehouse inventory management software and how it can help your business, no matter how big or small your operations may be.
In this guide, we’ll explore:
- What is Warehouse Management?
- What is Inventory Management?
- How Warehouse and Inventory Management Software can Enhance Operations
- High Tech Tools or Low Tech Tools – Where does Software Fit?
- How Warehouse Inventory Management Software Can Help Track Metrics
- Inventory Management KPIs
- 5 Additional Benefits of Warehouse Inventory Management Software
- Just-in-Time Inventory
- Enhanced Security
- Inbound and Outbound Optimization
- Improved Employee Morale
- Happy Customers and Suppliers
- How to Choose a Warehouse Inventory Management Software
- It’s Time to Bring Your Warehouse to the Next Level
What is Warehouse Management?
If you’re reading this, you probably aren’t new to the concept of warehouse management. The official definition is managing stock, employees, picking and packing processes, loading, and return processes. Optimal warehouse management means managing all of this (and more) at maximum efficiency.
For example, planning the stock location for the most efficient picking and packing is one small part of warehouse management. Warehouse management looks at all of these processes as a whole.
What is Inventory Management?
Inventory management is similar to warehouse management, but instead deals with specific goods processed by the warehouse. A rudimentary example in a food facility is FIFO, or first in first out. Warehouse staff know to use the oldest raw ingredients first to maximize shelf life.
You might be wondering why you need a warehouse inventory management software to help with these processes. They’re easy enough to follow in principle. However, there are a lot of steps to optimizing warehouse and inventory operations.
How Warehouse Inventory Management Software can Enhance Operations
Managing and handling inventory may seem like an easy job to the untrained eye, but we know how complicated a job it actually is. From the moment items arrive at your loading dock to the moment it leaves for customer delivery, there are many steps and people involved and many opportunities for error. All these steps, employees, and potential errors cost valuable time and money, neither of which can be spared as the demand for ecommerce continues to grow.
With customized warehouse inventory management software, you can build systems that optimize your inventory handling processes, including receiving, put-away, picking and packing, and invoicing. You can maximize employee efficiency, reduce costs, and allow your operations to grow. Scaling is a huge part of warehouse operations today, and it’s difficult to do without the correct end-to-end solution that can do it all.
High Tech Tools or Low Tech Tools – Where does Software Fit?
Perhaps you’ve already integrated some technology into your warehouse operations and inventory management processes—barcode scanners, labelers, scales, or even self-loading conveyors. With good warehouse inventory management software, you can integrate the tools you already use into the system to increase accuracy and improve your operations. For example:
- Barcode scanners can quickly match barcode numbers with those already in your system, ensuring the correct item is picked for an order.
- Labelers can automatically print packing slips or mailing labels once an order is picked and packed.
- Scales can provide the exact weight of an item and work with your WMS to find the best shipping rate from approved carriers in your system.
- Self-loading conveyors can deliver items to packing stations to speed up the time it takes to get an order out the door
How Warehouse Inventory Management Software Can Help Track Metrics
No matter what type of clients and customers you serve, you want to be at the top of your game. But how can you improve if you don’t know where you stand right now? What if you don’t have the visibility to see value stats that can help you improve and scale your process?
Warehouse inventory management rely heavily on data, and it’s valuable! You can use that data to make your processes better and save money. Manual data tracking can provide some helpful information, but it may not be able to provide the right data. Automating processes and using a warehouse management software to track processes within your warehouse can help you set goals and key performance indicators (KPIs), building an organizational mindset of continuous learning and improvement.
It also helps you get a leg up on competitors that don’t have that visibility into their data. Think about it: if you had x-ray vision goggles and no one else did, what would you see that they couldn’t? Better software solutions give you this kind of visibility into KPIs some warehouses aren’t aware they should even be tracking.
Inventory Management KPIs
Key performance indicators for warehouse operations cover everything from receiving to shipping and backorders to returns. Inventory reports in your warehouse are grounded in warehouse best practices and the most frequently used KPIs. Warehouse management KPIs fall into seven categories:
- Receiving and Put-Away: Get insight into where your processes are performing well and where they need some help.
- Shipping: KPIs in this area include order cycle time and insight into issues in picking, packing, or shipping workflows.
- Storage: Find out how much it costs to keep products on your shelves.
- Picking: Calculate your order picking accuracy, reduce fulfillment issues, and get better insights into available inventory.
- Equipment: Learn how efficiently you use warehouse equipment.
- Return Process: Improve your rate of order returns and improve how quickly items are returned to shelves.
- Safety: Track the number of incidents and lost time, and evaluate workflows and processes to improve your safety standards for employees.
5 Additional Benefits of Warehouse Inventory Management Software
In addition to using data and KPIs to improve your warehouse operations and save money, you may be wondering what some of the other benefits of a WMS might be. Let’s explore five of these additional benefits.
Just-in-Time is an inventory management practice that keeps stock levels low and moves products quickly through your warehouse. This inventory management practice can reduce storage costs but does take some practice. You’ll need accurate demand forecasting capabilities, which your WMS can provide to generate optimal inventory levels to meet demand without underestimating or exceeding those demands.
Setting up your WMS to require all employees to have individual accounts when entering transactions creates a data trail that connects specific employees to specific transactions. This can improve accountability, allow you to track error rates, and reduce theft risk. You can also identify training opportunities and ways to improve warehouse practices based on the data.
Inbound and Outbound Optimization
With a warehouse inventory management software, you can optimize how inventory and equipment move around your warehouse. You can easily schedule receiving and put-away tasks and determine the best dates and times to receive shipments based on available labor and equipment. Once an order is ready to be picked, you can plan walking routes and establish zone, batch, or wave picking algorithms.
Improved Employee Morale
It’s hard to work in a chaotic environment. A WMS can reduce that chaos by ensuring operations run smoothly and seamlessly and your employees use their time wisely. If employees are confident and comfortable performing tasks, productivity and job satisfaction increase, and safety within your warehouse will improve.
Happy Customers and Suppliers
A cloud-based WMS gives suppliers and customers visibility into the available product, the ability to schedule deliveries to your warehouse for slower times, quicker order fulfillment, reduced delivery times, and fewer inaccuracies in shipped orders.
How to Choose a Warehouse Inventory Management Software
Whether you’re a small operation or manage multiple warehouses, having accurate and current knowledge of your inventory, process efficiency, and operational costs is essential.
For small- to medium-sized businesses, warehouse inventory management software can help reduce fulfillment error rates, manage inventory throughout your inbound and outbound processes, create effective billing systems, and improve customer service.
For any warehouse operators involved in business-to-business, business-to-customer, or direct-to-customer fulfillment operations (basically, everyone reading this), a WMS allows you to serve your clients more effectively and efficiently by automating and streamlining your operations, improving productivity, monitoring jobs and workflow from virtually anywhere, and generating reports to monitor and improve inefficiencies.
If you are involved in third-party logistics (3PL), you can integrate 3PL software into your WMS software to set up digital warehousing, connect to ecommerce and order management systems and online marketplaces, and establish smart shipping processes to save time and money.
If you’re worried about downtime as you build and implement a warehouse inventory management software for your business, know that Logiwa can have you set up in as little as four weeks, not the months it can take some of the other software providers.
It’s Time to Bring Your Warehouse to the Next Level
From the moment stock arrives at your loading dock to the moment it arrives at a customer’s doorstep, it’s imperative to know:
- Where inventory is at all times,
- How it is being handled, and
- How much your inbound and outbound processes cost in terms of time, resources, and money.
Manual processes can be full of errors, resulting in unhappy clients, low employee morale, and frustrated customers. A digital, cloud-based warehouse inventory management software and mobile applications will allow you a complete insight into your inventory at all times, establish processes based on industry best practices, see increased sales, improve efficiency, and reduce costs.
How can warehouse inventory management software improve my operations?
With customized warehouse software, you can build systems that optimize your inventory handling processes, including receiving, put-away, picking and packing, and invoicing, maximize employee efficiency, reduce costs, and grow your operations.
Can low-tech tools integrate with a WMS?
Yes! With good WMS software, you can integrate the tools you already use into the system to increase accuracy and improve your operations. Tools you can integrate with a WMS include barcode scanners, labelers, scales, and self-loading conveyor belts, among others.
I run a smaller warehouse operation. Do I need a WMS?
Warehouse inventory management software is perfect for small businesses, especially those with plans to grow in the future. A WMS Software can help reduce fulfillment error rates, manage inventory throughout your inbound and outbound processes, create effective billing systems, and improve customer service.
How can a WMS help me improve my operations?
By establishing key performance indicators (KPIs), you can monitor and track warehouse processes and build systems for improvements. Standard warehouse inventory management KPIs include receiving and put-away efficiency, picking accuracy, storage costs, and even warehouse safety. Tracking KPIs can help improve your warehouse efficiency, reduce costs, and increase client and customer satisfaction.