What do you do when the high costs of inventory damage, obsolescence, and pilferage erode profit? What do you do when you lack real-time inventory data to properly manage these aforementioned warehouse management costs? These costs erode profit because companies lack the technology to properly manage their inventory counts.
Inventory is often damaged due to poor handling, but poor handling is typically caused by poor storage practices. Here are five critical ways you can use technology to improve warehouse productivity, while protecting your inventory from damage.
1. Barcoding Inventory
Managing inventory by Excel spreadsheets is an outdated strategy that will cost your company valuable time. This manual approach to warehouse management is rarely accurate. In fact, Excel spreadsheets are only updated when someone does it by hand, which ultimately means they don’t operate in real time. Barcoding inventory and tracking inventory counts through a warehouse management system helps you avoid stockouts, while also helping you to better manage your inventory and warehouse management costs.
2. Handheld Mobile Scanners
Barcoding inventory is one thing, but empowering your warehouse employees with the proper tools to manage that inventory involves providing them with handheld mobile scanners. Warehouse management doesn’t merely involve entering values into a laptop. It involves tracking incoming and outgoing shipments with an accuracy that simplifies how your purchasing, inventory, and warehouse management teams reconcile inventory counts. It’s those accurate inventory counts that your sales team needs in order to win business.
3. Tracking Inventory Costs Through Inventory Software
Inventory is a cost of financing. However, there are other costs that impact profit margins. Tracking these costs monthly, quarterly and yearly is essential to understanding what portions of these costs have the greatest impact on your bottom line. For instance, how much does financing impact these costs relative to the costs of damaged inventory, obsolete inventory, insurance and or pilferage? Understanding each cost will allow you to ensure that you have a plan moving forward to reduce their impact within your warehouse.
4. Having the Right Rack Systems
Proper storage and handling is essential when mitigating issues pertaining to inventory damage. Double deep racking systems provided by companies like Arpac Storage Systems Corp will allow you to minimize your inventory cost per square foot of warehouse space by storing more inventory within a given location. Pushback racking is another option that simplifies how you segregate certain inventory classes, like raw materials, spare parts, consumables, and/or finished goods. The right rack systems should be sturdy, well-manufactured, and able to protect your inventory against the inevitable damage that would occur without them. After all, when inventory is left out in the open, damage is more likely to occur. Rack systems provide essential protection from accidents and poor handling.
5. Mobile Devices for Sales
Sales are what make your inventory turnover rates increase. The higher your sales volume, the less likely you’ll encounter issues with all those aforementioned cost drivers. Faster sales cycles mean your profit is higher because your carrying costs are lower. The best way to upgrade your warehouse management practices is to make sure your sales team is as empowered as your warehouse management team.
It’s time to leave those outdated strategies behind and upgrade how you manage your warehouse. If successful, you’ll reduce costs and improve inventory accuracy while also helping your warehouse management team. More importantly, you’ll empower your sales team to perform.