Guide to Warehouse Inventory Management

Warehouse management system is a critical component of stock control if your small firm keeps items in a warehouse. Learn the fundamentals of warehouse inventory control. 

Warehouse management is a subset of inventory management that focuses on knowing which things are coming in and going out, as well as where each item is, which includes cycle counting in warehouse

Warehouse inventory management looks to be a simple process on the surface. Isn’t it just inventory in and inventory out after all? In actuality, controlling warehouse inventory is a significantly more complicated undertaking, leading to the development of numerous schools of thought.

And they’ve converged on the most effective approach to inventory management, resulting in a few well-established approaches that serve as a foundation for inventory control in warehouses and other contexts.

Why warehouse inventory management is needed

Warehouse management is similar to inventory management, but it focuses on the day-to-day operations of a particular storage facility, including product counts and locations, as well as operator performance.

These inventory management methods can help small business owners who are opening their first warehouse or who want to streamline the operations of their existing warehouses, as well as those who do warehouse cycle counts.

If your small business maintains the things it sells in a warehouse, warehouse management is an important part of supply chain management. Warehouse management is essential for keeping track of the things in your company’s inventory and ensuring that inventory levels are kept at optimal levels so that you can quickly fulfill customer requests. 

Understanding how to build a warehouse management plan – and the inventory management software your firm needs to support it – is crucial to keeping track of your inventory, preventing loss and theft, and pleasing consumers by fulfilling orders quickly.

Keep in mind that developing the most complete approach for your company will almost certainly necessitate a combination of tactics.

Bulk shipments

This strategy is based on the idea that buying and shipping items in bulk is nearly always less expensive. Bulk shipping is one of the most used procedures in the business, and it may be used for items with a huge demand from customers.

The disadvantage of bulk shipping is that you will have to spend more money on storing the goods, which will most likely be offset by the money saved from buying large quantities of things and selling them quickly.

With bulk shipments- 

  • Profitability potential is greatest.
  • Lower shipping expenses result from fewer shipments.
  • It’s ideal for items that have a steady demand and a lengthy shelf life.

ABC inventory management

ABC inventory management is a method of categorizing items in order of significance, with A being the most important and C being the least valuable. Not all things are created equal, and greater attention should be devoted to products that are more popular.

ABC analysis relies on yearly consumption units, inventory value, and cost significance, albeit there are no hard and fast criteria.

When selective control, financial allocation, and human resources are necessary, the key is to run each group individually.

With ABC inventory management-

  • Allows for improved time management and resource allocation by aiding demand forecasts by studying a product’s popularity over time.
  • Assists in the development of a multi-tiered customer service strategy.
  • Allows for inventory accuracy.
  • Encourages smart pricing.


Backordering refers to a company’s choice to accept orders for out-of-stock items and receive payment for them. If managed properly, it’s a dream come true for most firms.

When there is only one out-of-stock item, generating a fresh purchase order for that item and alerting the buyer when the backordered item will arrive is all that is required. When you’re dealing with tens or even hundreds of different sales every day, issues start to arise.

Nonetheless, allowing backorders leads to greater revenue, so it’s a balancing act that many companies are ready to do.

Just in Time (JIT)

JIT inventory management reduces the amount of inventory that a company retains on hand. Because you only buy inventory a few days before it’s needed for distribution or sale, it’s considered a hazardous strategy.

JIT reduces inventory holding costs by keeping stock levels low and prevents instances where deadstock – effectively frozen capital – stays on shelves for months at a time.

Businesses must, however, be extremely nimble and capable of handling a significantly shorter manufacturing cycle.


A wholesaler places stock in the hands of a retailer on consignment, but retains ownership of the goods until it is sold, at which point the retailer acquires the spent stock.

Selling on consignment often includes a high level of demand uncertainty from the retailer’s perspective and a high level of confidence from the wholesaler’s perspective.

So, hopefully these techniques will help you keep a perfectly organized and well maintained warehouse with a great inventory management system in place as well.

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