What is Warehouse Management and Its Importance?

By Nick Spooner
CEO at Salesorder.com | Software and expertise for wholesaler optimization

Whether you are running a small wholesale business or managing a large corporation, the way you manage your warehouse can make or break your success.

Warehouse management is an essential component of supply chain management, encompassing the physical handling and storage of goods, inventory management, and order fulfillment. Effective warehouse management provides numerous benefits to wholesalers, including optimized inventory levels, reduced costs, and improved client satisfaction.

In this article, we will explore what warehouse management is, why it is essential, and some of the strategies for effective warehouse management.

what is warehouse management

What is Warehouse Management?

Wholesale warehouse management is the process of organizing, controlling, and optimizing the operations of a warehouse.

It involves managing the physical space, inventory levels, and staffing requirements to ensure that the warehouse is operating at maximum efficiency. The primary goal of warehouse management is to optimize the flow of goods through the warehouse to ensure timely and accurate delivery to clients.

Warehouse management can be broken down into six main processes:

  • Receiving: This involves accepting goods into the warehouse and recording their arrival. The process includes inspecting goods for damage and verifying that the shipment matches the purchase order.
  • Put-Away: This involves organizing the goods within the warehouse space. The goal is to maximize the use of space while ensuring that items are easily accessible for picking.
  • Storage: The storage process involves the organization, management, and optimization of the physical storage of inventory within the warehouse. This includes identifying the most appropriate storage locations, implementing inventory control measures, and ensuring efficient storage and retrieval of goods.
  • Inventory Management: This involves tracking inventory levels within the warehouse. The goal is to maintain accurate inventory levels while minimizing the cost of carrying inventory.
  • Order Picking: This involves selecting the correct items from the warehouse to fulfill client orders. The process must be accurate and timely to ensure that clients receive their orders on time.
  • Shipping: This involves preparing goods for shipment and ensuring that they are delivered to the correct location. The process includes verifying the shipment against the client’s order and providing tracking information to the client.

What is a Warehouse Management System?

A wholesale warehouse management system (WMS) is a software application designed to support warehouse management operations.

It is an essential tool for managing inventory, order fulfillment, and the movement of goods within the warehouse. The system provides real-time visibility into inventory levels, order status, and warehouse operations. A WMS can be customized to meet the specific needs of a warehouse, including the type of goods being stored, the volume of orders, and the level of automation required.

A WMS can perform a range of functions, including:

  • Inventory Management: A WMS will include wholesale inventory management software to track inventory levels, locations, and movements within the warehouse. The WMS provides real-time visibility into inventory levels, making it easier to manage stock levels, identify slow-moving products, and avoid stock-outs.
  • Order Management: The WMS manages client orders, ensuring that they are fulfilled accurately and on time. The system can track order status from the moment it is received until it is shipped, making it easier to manage client expectations and provide real-time updates on order status.
  • Picking and Packing: The WMS provides instructions for order picking and packing, ensuring that the correct items are selected and packaged for shipment. The system can also optimize the order-picking process by creating the most efficient picking routes, reducing the time and effort required to fulfill orders.
  • Shipping: The WMS generates shipping labels and tracks the shipment of goods to ensure that they are delivered to the correct location. The system can also integrate with shipping carriers, making it easier to manage the shipping process and track shipments in real time.
  • Reporting and Analytics: The WMS provides real-time reporting and analytics on warehouse operations, including inventory levels, order status, and productivity. The system can generate reports on key performance indicators (KPIs), such as order fulfillment rates, inventory accuracy, and employee productivity. This data can help wholesalers identify areas for improvement and optimize warehouse operations.

How to Manage Warehouse Inventory

Effective inventory management is critical to successful warehouse management. It involves managing inventory levels to ensure that the warehouse has the right amount of stock on hand to meet client demand while minimizing the cost of carrying inventory.

Here are some strategies for managing warehouse inventory:

Implement a Reliable Inventory Management System

To ensure that you have accurate information about your inventory levels, it is important to have a reliable inventory management system in place. Choose an inventory management software that can help you track inventory levels, reorder points, and sales patterns. With a reliable inventory management system, you can keep track of your inventory in real-time and make informed decisions about when to reorder products.

Organize Your Inventory

Having a well-organized warehouse makes it easier to pick and pack orders and minimizes the chances of stock-outs. To organize your inventory, you can categorize your products based on their attributes like size, weight, type, and popularity. You can also use a numbering system to identify and locate products quickly.

Set Up a Regular Inventory Audit

Conducting regular inventory audits is essential for keeping your inventory records accurate. These audits help you identify discrepancies between your stock levels and inventory records, which can occur due to theft, damage, or human error. By conducting periodic audits, you can ensure that your stock levels match your inventory records and take corrective action when necessary.


Optimize Storage Space

Efficient use of your warehouse space can help you reduce costs and improve your bottom line. To optimize your storage space, make use of vertical storage options and implement a first in, first out (FIFO) system to ensure that older products are used first.

You can also optimize your storage space by eliminating dead inventory. Dead inventory refers to products that are no longer in demand or have expired. By eliminating dead inventory, you can free up space for products that are in demand.

Implement Efficient Receiving and Shipping Processes

Establishing efficient receiving and shipping processes is essential for ensuring that products are received and shipped in a timely and accurate manner. This includes optimizing the inspection, quality control, and tracking processes. By implementing efficient receiving and shipping processes, you can reduce the chances of errors and delays in the supply chain.

Train Employees on Inventory Management

It is important to ensure that all warehouse personnel are trained on inventory management best practices, including using the inventory management system, inventory control, and handling and storing products. Training your staff on inventory management can help you minimize errors and ensure that your inventory records are accurate.

Utilize Inventory Forecasting

Inventory forecasting is a critical tool that can help you manage your warehouse more effectively. By analyzing past sales data and market trends, inventory forecasting can predict future demand and enable you to make informed decisions about inventory levels. With accurate inventory forecasting, you can avoid stock-outs and overstocking, optimize your storage space, and improve your bottom line by minimizing excess inventory costs.

The Importance of Warehouse Management

Effective warehouse management is essential to the success of any wholesaler that relies on a supply chain.

Here are some of the key benefits of effective warehouse management:

  • Cost Savings: Effective warehouse management can help minimize the cost of carrying inventory by ensuring that inventory levels are optimized. It can also reduce the cost of errors, such as incorrect orders or lost inventory.
  • Improved Client Service: Effective warehouse management ensures that client orders are fulfilled accurately and on time. This helps improve client satisfaction and loyalty.
  • Increased Productivity: Effective warehouse management can help increase productivity by optimizing warehouse operations, such as order picking and inventory management.
  • Real-Time Visibility: A WMS provides real-time visibility into warehouse operations, including inventory levels, order status, and productivity. This helps warehouse managers make data-driven decisions and quickly identify and address issues.
  • Scalability: Effective warehouse management can help wholesalers scale their operations by providing the infrastructure to support growth. A WMS can be customized to meet the specific needs of a wholesaler and can be easily scaled up as the wholesale business grows.

Efficient Warehouse Management with Salesorder

Increase the efficiency and organization of your warehouse management with Salesorder ERP software.

Our cloud-based ERP software offers an effective and simple wholesale warehouse management system (WMS). From tracking inventory to managing operations to ensuring optimal warehouse management processes, our comprehensive software is your total solution to managing your warehouse. Customize the workflows, pick strategies, automation, functions, and more in the WMS to match your growing wholesale business.

Get in touch to implement our warehouse management system in your wholesale business.

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