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Strategitic Logistics: Major Steps To Control Inventory Flow And Drive Warehouse Efficiency

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In this article, we will be talking about the flow of strategy as pertains to the inventory flow and driving warehouse efficiency. Stay tuned over the upcoming next few weeks and beyond for more ways to stay strategic and to get the latest insights of global supply chain and procurement along with the logistics in the B2B market.

The essence of strategy is choosing what not to do- Michael E. Porter

Throughout the entire process of order fulfilment, companies have to ensure the optimum warehouse efficiency by appropriately controlling inventory flow. Warehouse management rests at the core of an effective transportation strategy, while an inefficient system results in poor shipping process, poor customer satisfaction and deviation from best practices.

Companies must also consider a good ROI and warehouse capacity. An overly-stocked warehouse leads wrong product shipment in unusual slots along with the lost costs. Likewise, an under-stocked warehouse results in delayed shipments, irritated customers and bad company performance.

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There is no denying the fact that every time an item moves in the ware house, there exists a chance of errors. Adding to bad luck, this includes all processes, data collection points and inbounds to manufacturing areas. The following practices can help warehouses ensuring the effective warehouse management control and smooth flow of inventory.

Automated Data Collection

Few companies believe in the might of pen and paper in keeping the track of inventory records. However, the sheers volume of today’s processes in managing warehouses and the inventories has made the hand-written tracking procedure obsolescent. The very same problem exists with the manual entry of information into the computers and electronic shipping systems. Although, such methods are still prevailing and are in use; they can easily misread, misunderstood, or entered incorrectly. As a result, subsequent shipping order for a specific order becomes disorganized and inaccurate.

Modern warehouse management demands bar codes of Radio Frequency Identification (RFID) to automatically track and collect data about an item. This significantly eliminates the potential for human errors in transcribing human errors manually.

When the automated data collection emerged, the cost of implanting such technology exceeded the possible losses from the human errors. But nevertheless, automated data collection has become more affordable and cost-effective in the global economy. Automation carries a remarkable ROI within when the warehouse makes the transition. Initial charge will be hard for the warehouse, but it will cut costs, reduce the expenses and improve overall performance of the facility.

Transaction Based Movements Inventory Flow

Every little movement throughout a warehouse highlights a chance to lose a track of inventory, cause an error in the order, or will result in additional picking errors. Every movement from arrival to picking to wrapping up of the shipment should be made to generate a transaction.

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Transactions generally are misunderstood as something which reflects the sale of merchandise. Transactions within a warehouse, actually, allow for the tracking of the product’s movement and status of the order fulfilment process.

Dock Arrival Times

It is to be made sure that all the merchandises should arrive on the dock at the time of the truck arrival. This not only reduces the wasted space by sitting product but also smoothens the entire shipment procedure. Furthermore, different type of shipments such as full pallets, cases and individual shipments should be pushed to the dock simultaneously as it speeds up the process.

Aberdeen, the oil capital of Scotland.
Aberdeen, the oil capital of Scotland.

Picking Procedures

For an effortless management of warehouse to better inventory flow requires the predictions and managing orders that are yet to be arrived. Pickers, human or robotic, should always plan for the next wave of picking. For example, if an upcoming wave will result in picking shortages in one end of the warehouse, pickers then should be diverted from lower-priority picking duties to the surge-area. This will assist in maintaining the pickup times and ensuring that the all shipments leave the warehouse at the appropriate time.

Victorious warriors win first and then go to war, while defeated warriors go to war and then seek to win- Sun Tzu

System-Directed Replenishment

As order progress through the flow of order fulfilment and picking, the slots will gradually get empty. When a given slot falls below the standard minimum level, the Warehouse Management System (WMS) should generate an order request to the manufacturer. But however, this order should be considered only when a given product will be in high demand in the coming weeks. The will help account for inventory flow fluctuations customer-demands increase and decrease throughout the year. The WMS should be designed to reorder the products according to the priority before the product reaches the minimal levels.

Vendor Compliance Programs

The modern trade involves hundreds, if thousands, of potential vendors unlike the ideal traditional warehouse which would focus on incoming product from one vendor. A vendor compliance program is held responsible for allowing warehouse managers to ensure all inventory is fetched to the facility at the correct time, in the right quantity and well packaged. Hence the communication between the vendor and the facility plays a strong role in ensuring an accurate flow of inventory and improving efficiency in the warehouse.

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Approach: A warehouse may hire a vendor compliance manager to ensure that all vendors meet the facility’s requirement. Furthermore, this manager would be responsible for determining the percentage of vendors who comply with such requirements and suggest improvisations to poor performing vendors.

Returns Management

Returns are an inevitable part of any warehouse management strategy; regardless of the efficiency, effectiveness and implementation of best practices. Customers may end up returning an item due to buyer’s remorse. However, DC (Distribution Centre) or warehouse sees this as an additional cost.

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To maintain the accuracy of the inventory and warehouse, all returns need to be scrutinized carefully for the resale value, needed repairs, or return to the manufacturer. Subsequently, WMS must account for all the returns that will be able to be restocked in the appropriate slot for meeting the future needs.

Flexibility and Evaluation

Errors are bound to happen in warehouse management and the warehouse team must be ready to adapt to changes in processes. This flexibility allows meeting the varying demands of customers and vendors. If a problem recurs, the warehouse processes should be re-evaluated to determine what change in procedure will correct future problems. Maintaining flexibility is critical to meet demands in the global market.

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Making a warehouse improve the efficiency and maintain the control of inventory flow sounds simple. But improving warehouse inventory management reflects numerous changes and thousands of individual processes and every attempt to trim problems should be considered, applied and adjusted throughout the entire shipping process. By following these eight steps, a warehouse can improve their functionality and gain more control over the inventory. Inventory Flow Optimization plays a vital role in the supply chain, and if not maintained then could adversely affect the transportation.

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