Is your warehouse ‘choc full’ of stock? How to manage excess inventory more efficiently
If you have committed to holding additional stocks in case of future shortfalls over the coming months, ensure you are following these best practices to manage excess inventory as efficiently as possible to minimise costs or wastage.
Holding excess inventory can be a costly strategy and now, because of future economic uncertainty, the practice is becoming widespread. Companies are clearly balancing the additional costs of inventory management against the potential implications of being short of raw materials and deciding the former scenario is a preferable place to be. It’s no longer a case of ‘just in time’ but a question of ‘just in case’.
If you’ve committed to holding additional stocks in case of future shortfalls over the coming months, ensure you are following these best practices to manage excess inventory as efficiently as possible to minimise costs or wastage.
5 ways a WMS helps when your warehouse is ‘choc full’
Here’s how a WMS (warehouse management system) can help improve efficiency when warehouse space is tight and you are holding excess inventory for unforeseen events:
Putaway management and location assignments
Invaluable for warehouses with excess inventory, an effective put-away process is an important stock management strategy to maximise space utilisation and ensure the physical movement of products can be kept to a minimum. There are multiple ways a WMS can automate putaway, by identifying the best place to store items based on available spaces, monitoring how frequently the items will be picked and where they should be placed in the warehouse and whether items need special storage considerations.
The different putaway options available within a WMS can be flexible and suggested on an adhoc basis, or structured around a set of rules. For instance, they could be set to raise an alert if the incoming stocks need special handling instructions, e.g. allergens must be stored well away from any contaminants in a food warehouse.
Pick route optimisation and planning
As travelling can take up a large part of the time spent on warehouse picking processes, appropriate sequencing of picking tasks within an order is crucial to achieving high efficiency, especially when the warehouse is holding excess stock. After evaluating the day’s order pool and assigning tasks, a WMS automatically evaluates the routes available and will direct operatives to fulfil pick instructions using the most efficient travel path for their immediate location. Goods are picked more quickly, potentially using fewer resources.
Shelf life management and stock rotation
There is huge value in using a warehouse management system to optimise stock rotation and ensure that items with a limited shelf life are carefully managed to avoid any wastage. This extends beyond the obvious perishable raw materials to also include packaging items, which can in turn also impair finished product quality if they are past their recommended use by date. A WMS makes this easy by automatically reminding operatives of which lots to pick first, based on first in first out principles.
Perpetual inventory (PI) stock counting
If your warehouse is holding excess inventory, how are you managing stock counts? By introducing a daily PI or cyclical counting process supported by a WMS, warehouse managers can eliminate the need to undertake stock counts on a monthly or yearly basis. Cyclical counting is the most effective way to maintain inventory. It also means it’s business as usual whilst counting is in progress and shrinkage can be minimised. All materials movements are accurately recorded with an electronic audit trail and discrepancies are immediately apparent.
When product quality issues are raised, it is vital that all affected products can be quickly and accurately identified to minimise potential losses – both financially and to brand reputation. Using a WMS, it’s possible to create reports detailing lot/batch/expiry date information which confirms to compliance requirements and also allows for detailed trend analysis. At any point in time, a WMS will provide a full trail of what has happened to every element of stock during its entire lifecycle, providing extensive traceability management options. The audit trail covers the entire supply chain, right down to the source and provenance of the original raw ingredients at the SKU, UPC and lot level, limiting the impact of inventory wastage.