3 Reasons Inventory Management for Warehouses is Vital

January 10, 2023

Man reaching on to pallet rack in warehouse

Inventory in a material handling or distribution center warehouse can be the annual task we all dread the most. For some of us, it means directing our scant-enough resources to a possible week-long task, while a skeleton crew manages the normal day to day. It can mean hiring additional workers and equipment, expenses we don’t need in these inflationary times.

For some of us, however, DC warehouse inventory has become less of an annual chore and more of a continuous and much smoother process occurring in the background every single day. We’ll talk about how you can find this material handling and DC warehouse harmony, too. First, let’s explore 3 reasons why inventory is so vital to our operations, in case you were thinking about just skipping it altogether.

Why is Inventory so Vital to Material Handling and DC Warehouse Operations?

Wouldn’t it be nice to not worry about conducting inventory in your DC or fulfillment center warehouse? Unfortunately, that’s a pipe dream that can actually lead to a nightmare situation if you don’t understand how to conduct inventory and why it’s so important. Here are three reasons why it’s so critical to your success.

Rows of Pallet Rack in a warehouse

  1. Balance Supply and Demand (Keep Customers Happy)

The material handling and DC warehouse industry had begun getting its toes wet in the e-commerce world when the pandemic hit and thrust us all into a crazy explosion of online shopping. In short order, those who were flexible and open to the necessary changes not only kept up but thrived. Our demand for easier, and more accurate, ways to receive, stock and ship caused recent design innovations to go into high gear. Warehouses that rely on pencil and paper to keep track of inventory are going to fall behind in this new world of automation.

What if you got a very profitable order for some product that you typically stock, only to find that you have none and perhaps due to ongoing supply chain issues, cannot get it in time to satisfy your customer? What if a large hospital group is one of your regular customers and needs a larger than normal order of some medical supplies, but you cannot locate the needed items in your warehouse? Losing a steady customer to a competitor is a real possibility in these situations. Especially in today’s fast-paced, need-it-now atmosphere.

Simply put, you need a real-time updated inventory at your fingertips at all times these days.

  1. Reduce or Eliminate Returns (Build Customer Loyalty)

Completely eliminating returns (another bane of the fulfillment center warehouse industry) may be another pipe dream. But, we can certainly reduce it to a more manageable level when we ship the correct order and it isn’t damaged.

Customers don’t like to return items any more than we like to receive them. It’s a big hassle on both ends. That’s why sending out the right item, in a timely manner and with no imperfections is the ideal solution for both. Utilizing your inventory management in the correct way can help you achieve this place of warehouse optimization. How does it work?

It works because items that come into your distribution center damaged or incorrect are not simply stocked and forgotten. With the right innovative warehouse management tool, these items are placed to the side and returned to the sender, never to leave the warehouse by the front door. You already know, as a businessperson, that customer retention is far less expensive than customer acquisition. You’ll retain more loyal customers when they have a good experience with you.

  1. Ensure Valuable Space (Benefit from Price Reductions)

Let’s refer back to our example of a large hospital group customer. Suppose you know that you’ll need to order a much larger stock of certain medical supplies prior to winter flu season. And suppose one of your sources for whatever reason has a large sale on those items. The balance of your inventory has a direct impact on your ability to capitalize. How does that work?

Even though your warehouse is part of your business, you are still paying rent for the space in that warehouse. If you are overstocked with unsellable items taking up valuable space, you are, in effect, paying rent on space you cannot utilize. You cannot bring in a large order if you don’t have the space to stock it until winter flu season, for example. And without a constant and accurate inventory, you won’t know what’s moving and what’s not.

Best Practices for Inventory Management for Warehouses

So, now you know why having an accurate and timely inventory is so vital to your distribution center warehouse operations. As we mentioned, the pandemic and explosion of e-commerce brought some necessary material handling innovations to the forefront. If you haven’t looked into how some of this new technology can help you solve your inventory challenges, then you are doing your fulfillment center warehouse application – and yourself – a disservice.

Let’s take a look at some ways you can help streamline your inventory control so it remains as accurate and efficient as possible.

  • Cross Docking: Setting up your receiving and shipping area so that goods coming in never make it into warehouse storage but go directly into an outgoing situation, either directly into the customer’s possession or loaded onto a trailer for shipping out.
  • Reorganize Warehouse Space: This suggestion may elicit a collective groan because nobody’s got time for that, right? But, in effect, starting over with a better foundation for your specific operation can be the move that puts you in the strongest position for future success.
  • Incorporate Inventory Management Software: If you want to eliminate that once a year inventory chore and have a real-time efficient and ongoing system, you’ll need to invest in inventory management software.

Is inventory a pain? Yes. Is fixing the problems and finding a better way forward a challenge? It can be. If you find the right trusted partner, however, you can take a lot of the angst and headache out of finding and utilizing what we like to call your warehouse maximum operating potential (MaxOp).

Warehouse Inventory Solutions

Warehouse management systems have come a long way from your warehouse supervisor and his paper and pencils.

But since warehouse management systems (WMS) come in a huge variety of shapes and sizes, as well as in complexity, there’s no reason for material handling companies doing business in this current e-commerce climate to shy away from incorporating the benefits of a solid WMS. And back to our original topic, you can find a WMS that provides a smooth, ongoing warehouse inventory in real time. It just takes the will to make changes.

Find Affordable Warehouse Inventory Solutions Today

As we move into a new year, it may be time to take a hard look at your processes and aim for more efficient and profitable results. Start by reviewing your material handling and DC warehouse inventory system. See some places for improvement? We can help. We are 54 Intralogistics, part of Darr Equipment, a name you know and trust. Contact us for a free evaluation or give us a call at (800) 964-LIFT.