A Guide to Warehouse Optimisation and Inventory Management

Implementing warehouse optimisation and efficient inventory management helps to fulfil orders faster and with reduced error, meaning reduced costs and more satisfied customers. With that in mind, we’ve put together a guide on how you can optimise your warehouse and inventory management processes.

What is warehouse optimisation?

Warehouse optimisation means improving your warehouse processes and inventory management to allow it to run more efficiently. This can be achieved through the improvement or automation of existing processes. 

Warehouse automation can be split into process automation, which concerns the automation of manual processes such as data collection, and physical automation, which concerns the use of machinery such as robots to assist with the physical movement of goods.

A warehouse management strategy should aim to identify and implement the most cost-effective methods of receiving orders, picking the necessary items, fulfilling the orders, and shipping them within a timely manner that ensures customer satisfaction.

Benefits of warehouse optimisation

1) More efficient use of labour

Because warehouse optimisation relies in part on automating processes, employees can be used for more complex, strategic tasks where they are needed most, allowing orders to be fulfilled faster. This also means fewer employees will need to work overtime even in times of an increased workload, saving money and also reducing the costly chance of human error caused by fatigue.

2) Better planning and forecasting

Optimising the warehouse and inventory gives business owners a much clearer picture of how inventory is used and in what quantities. This, in turn, makes it easier to plan and forecast inventory demands, meaning there is less chance of running out of stock during periods of high demand. 

3) Improves order fulfilment accuracy

Many common order fulfilment errors are caused by a poorly organised inventory, poor packing processes, and poor stock control. The implementation of both automated systems and a warehouse that is laid out to facilitate efficient, accurate packing will reduce the chance of these errors, while also improving fulfilment speed.

4) More return customers

While customers may not see the processes that go into creating a more efficient warehouse, they will feel the effects of warehouse optimisation. Their orders will be fulfilled on time, with little chance of error, even if those items are in high demand. All of this leads to more satisfied customers, who are more likely to return.

Tips for warehouse optimisation

1) Invest in warehouse management software

Combining warehouse management software with an inventory management system is the best way to control the multiple tasks and processes that are being carried out in the warehouse at any one time. 

Processes such as stock ordering, picking, moving products, packing and labelling can all be managed by these systems while also allowing you to monitor stock levels and how inventory moves out of the warehouse.

2) Invest in robotic technology

Automation technology has come a long way and is now an essential component of warehouse optimisation. There is a range of machines available to help with the automation or assistance of physical tasks in the warehouse, such as automated guided vehicles, autonomous robots, automated storage and retrieval systems, and even drones. 

Implementing these technologies can result in fewer errors, reduced chance of employee injury, faster order fulfilment and the opportunity to build your business’s reputation as being at the forefront of innovation.

3) Understand product velocity to improve warehouse layout

If you understand the rate at which the different items in your inventory are sold or used to fulfil orders, then you can start to redesign your warehouse layout to accommodate the swift picking of the most in-demand products. 

For example, stock that is used in multiple different orders or items that are frequently picked together should be placed close by, on easily accessible shelves, or in pallet flows close to the packing area.

4) Use demand forecasting

Demand forecasting is one of the best ways to ensure you are managing your warehouse inventory effectively. It allows you to store the stock you need when you need it, without worrying about product availability or paying additional storage costs unnecessarily. 

To properly utilise demand forecasting, you need to know how quickly your products are selling, which seasons or periods of the year affect your sales, and what your best-selling items are.

5) Reduce errors with control checks and proper labelling

A final point that is worth making about warehouse optimisation and inventor management is to safeguard your processes against errors. This involves both quality control checks to ensure items are not expired, damaged or faulty, and reducing the chance of human error by adopting a clear, logical labelling system to mark your aisles, racks, and products for ease of picking.