The terms ‘warehouse management’ and ‘inventory management’ are used interchangeably at times, probably because they both are concerned about products and operations. Both involve tracking via cycle counts, bar codes, packing, shipping, etc. However, the two could not be more different.
Being aware of the difference between warehouse and inventory management and implementing the best method for your organization can enhance your chances of earning profits to a great extent. To determine which one is the best, please understand the core elements of each.
Warehouse management involves a wide range of procedures associated with maintaining as well as regulating the warehouse of a business.
Starting from logistics and asset tracking to incoming freight, warehouse management encompasses everything that happens inside the warehouse.
A company that has a powerful grasp over warehouse management is capable of increasing the profits and decreasing the overhead. Thanks to software such as an RFID warehouse management system, you will control daily operations such as shipments, put away, pick up of goods, and deliveries.
The six specific procedures to keep in mind include:
- Inbound Processing – The items are logged and checked before they are placed in the right boxes. They are later packed for dispatch.
- Slotting – The fast-moving products are placed at the front. The customers must have easy access to them.
- Picking – The items are placed so that the workers can pick them up without any hassle.
- Packing – The items are packed properly. An accurate slip is provided. The deliveries must be smooth, after all.
- Shipping – The items are placed on the correct vehicle and allowed to be delivered at the correct doorstep.
- Handling Returns – The returned items are unloaded before the vehicles are loaded again.
Inventory management could be loosely defined as the process of keeping the inventory as well as the safe stock on the right track.
Inventory management is an integral part of the supply chain. It has aspects such as regulating and overseeing the orders, storage, and controlling the quantity of products for sale.
Inventory management relies on the below-mentioned strategies:
- In Time – The inventory is programmed to arrive within a stipulated period or when it is needed.
- ABC Analysis – Based on the consumption, a business divides its inventory into three parts. The items with the highest value account for 70%, items of the moderate value account for only 20%, and small value items account for less than 10%.
- Drop Shipping –This strategy removes the need for holding inventory. Thanks to dropshipping, a company can transfer orders directly and shipment details to the manufacturer, who then ships the items to the customers. With drop shipping, you would need a warehouse. Amazing, right?
- Cross Docking – In this practice, the semitrailer trucks or the railroad cars unload the materials on the outbound trucks directly. There is no in-between storage.
Now that you know almost everything about warehouse and inventory management, please choose one with utmost caution. Remember, the fate of your business lies on your decision.