Effective Warehousing And Inventory Management: Process and Tips

Why is it important to have inventory control in the warehouse management system

Running a successful business requires effectively managing multiple operations simultaneously. Warehousing and inventory management needs to be carefully done as it’s the first step when preparing products for sale. 

Let’s look at some best practices to help your company quickly and accurately ship products and gain customer satisfaction. 

Why is it important to have inventory control in the warehouse management system?

Why is it important to have inventory control in the warehouse management system
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Inventory control is important in the warehouse management system to forecast demand and meet minimum inventory levels. It allows you to stock up required amounts of products without overstocking products that might not sell. 

Planning your inventory well will also keep you prepared for seasonal sales and allow you to meet your customers’ needs. Read more on how can manufacturers use 3PL inventory management to sell in the US to help you plan better too. 

What are the steps in inventory management?

The inventory management process involves recording and managing stocks in a warehouse. Items go through the cycle of transport from the supplier until it gets shipped to the consumer. These are the main steps that are involved. 

  • Purchasing and receiving goods. These are goods that are already pre-produced or are raw materials for production. 
  • Review and store. Products received are checked to be in good quality, tagged and then stored in the warehouse. 
  • Holding stock. Stock is held in the warehouse and inventory levels are measured periodically until stock is ordered by a customer. 
  • Product sale. Orders are placed, pick lists are generated and warehouse teams pick up inventory for delivery. 
  • Reporting. Inventory reports are generated for key stakeholders and reports detail products that need to be restocked.

How do you set up a warehouse inventory?

Inventories should be set up with the goal of easy accessibility to products for quick picking. The warehouse set-up should consider the efficiency of the space when lining up shelves and bins. Label everything – products, boxes and shelves with inventory control numbers so they can be found easily. 

Create a labelled map that can be referred to with photos to know where products are stored. Divide your premises into zones to store similar items that are often bought together. 

Warehouse and inventory management training

There are courses available that train managers to run their warehouses efficiently. Managers can learn the principles necessary to evaluate, analyze and make changes to increase the performance of the warehouse. Training managers helps reduce wastage, increase productivity and improve operations. 

How to manage warehouse inventory effectively?

How to manage warehouse inventory effectively
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Managing a warehouse effectively requires hard working staff, a confident manager and an excellent system. The best way to detect where your warehouse needs improvement is to look at the data available and then find solutions. 

There is no one size fits all because each business is different so you’ll need to choose what works for your business. 

Warehouse efficiency tips and best practices

Choosing the right system for managing your inventory will improve your efficiency. Let’s look at tips that can get your warehouse working at its best. 

Planning your warehouse space

Place best seller items and heavy items closer to the shipping area. Fully utilize your warehouse space by optimizing vertical spaces for shelving. Label your boxes and use different types of shelving for different items to maximize functionality. 

Reorganize your floor plans periodically as demands for products change. Create workstations that are organized for picking and shipping. When arranging your warehouse, ensure that there is enough aisle space and traffic flow is not blocked. 

Adopt lean inventory practices

Adopting a lean inventory system that only purchases goods you need will reduce the amount of clutter in your warehouse. Opt to have small frequent deliveries and reduced safety stocks. This eases the amount of organizing that needs to be done at one go.

Be adaptable

Adapting to changes quickly is a key skill that will quickly solve problems. As business needs change, you may need to implement new strategies or technology to manage operations. Don’t hold on to the way things are being done and be open to change. 

Monitor inventory error rates

Inventory errors may not be a constantly recurring situation but they do tend to happen. It’s good to monitor error rates to see what mistakes are being made and how often to help solve problems. 

Labor efficiency

Increasing labor efficiency is less about blaming and more about solving problems your staff may face. Find out what is causing them to be unable to perform their best. Consider setting rewards for meeting performance indicators to encourage hard work. 

Train your staff

Training introduces your staff to the principles that lie behind what they do and understanding this helps them make informed choices and keep standards up. Staff should know the warehouse and its process well. 

Reduce human error by having staff who know how to use the equipment and locate items quickly.

Perfect picking and packing process

There should be a seamless system for picking items that have been ordered and packing them for delivery. Choose the type of picking that works best for your warehouse and double check your orders before shipping. Packaging options should be reduced to systematize and reduce time taken to pack items. 

Implement cross-docking

Cross docking practices deliver products straight from the manufacturer to customers without stocking products in the warehouse. Products are unloaded from suppliers and loaded off to be shipped. This practice has to be partnered with careful inventory monitoring to avoid losing track of shipments. 

How to implement warehousing transportation and inventory management?

How to implement warehousing transportation and inventory management
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Transporting goods plays a major role in warehouse management and customer satisfaction. The warehouse team needs to plan transportation via the right shipping method and the right connecting carrier. 

Transport management can be handled manually or there are many transportation management software that can be used. 

Deliveries of inbound and outbound products can be scheduled and easily tracked. The ability to be able to track packages ensures both customers and businesses that packages are safe and on the route. 

Last-mile delivery tracking will also provide assurance and predictability to customers about estimated time of arrival of their products. 

Good warehouse practices checklist

Here’s a quick checklist to inspect whether your warehouse practices good habits. The list of things to check in a warehouse is inexhaustible but this is a good place to start. Audit your warehouse from time to time to maintain good standards. 

  • Safety should be a priority in the warehouse. 
  • Employees should be properly trained and wear safety gear. 
  • First aid kits are available and fire extinguishers are visible. 
  • There are clearly marked exits and good ventilation. 
  • Your warehouse layout is optimized, there are no wasted spaces. 
  • The walkways are cleared of clutter and allow for smooth traffic. 
  • Inventory is being counted periodically. 
  • Staff are trained and able to rotate different stations. 
  • Staff show up on time to work and meet performance expectations. 


There are many different ways and strategies you can use to effectively manage your warehouse. Pick and choose what works for you and feel free to change them along the way to suit the growth of your business. Pay attention to the issues your warehouse faces and look to fix the root problems so you can maintain a healthy warehouse operation. 

The article is a part of our comprehensive series on “Warehouse Management Systems

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