What is warehouse management? What is its main difference with inventory management? Why is it important? What are its processes and common challenges?
Published 24 Nov 2022
| By Tiffany Argent, Jaydee Reyes
Warehouse management is the overall process of overseeing the day-to-day operations of a warehouse. This includes the major procedures involved in ensuring the smooth performance of activities such as receiving, inventory, storage, packing, and shipping of products out of warehouses. Warehouse managers, inventory managers, and logistics providers employ warehouse management to streamline product tracking, show accurate inventory levels, and increase warehouse efficiency.
Warehouse management and inventory management are often used interchangeably which sometimes leads to confusion over their primary purpose and distinctions. So, what is the main difference between the two?
Inventory management deals with the more specific business unit that focuses on making sure that there’s an accurate number of products, goods, or services readily available in the supply chain. It uses relevant information such as sales trends, historical data, and seasonal demands to forecast the stock levels needed to fulfill market needs. Inventory management also includes handling raw materials, item components, and finished products.
Warehouse management, on the other hand, is a more general and broad unit that includes a review of all the aspects considered in maintaining warehouses such as warehouse design, lay-out, geography, item tracking, and reporting. Warehouse management also observes the policies and procedures involved in efficient warehouse operations through resources including people, equipment, and finished products.
In addition, warehouse management is ideal for bigger companies with complex operations while inventory management is sufficient for smaller-sized businesses—depending on their prominent needs.
According to a study released by Oracle, 82% of American consumers worry that delays in deliveries or other forms of disruption in the supply chain negatively impact their way of life. As an essential component of the transport and logistics industry, warehouse management plays a huge role in the supply chain. Businesses implement warehouse management for various reasons but why is it an important factor in achieving a highly-efficient business logistics?
The warehouse management process is composed of six major steps that are highly dependent on each other. Every optimized process would affect how the next ones would perform so it is crucial to ensure that each one is operating according to its ideal functions. Below are the six core processes of warehouse management:
Warehouse receiving is the first and one of the most important processes of warehouse management. This step requires receivers to check incoming items and make sure that they are of the right quantity, are functioning properly, and are received promptly.
Receiving can somehow be considered as the business’ first layer of protection against unnecessary expenses. During this stage, warehouse receivers can identify items that aren’t at par with expectations, send them back to the suppliers, and therefore save the company from potentially costly damages.
Put-away is the second warehouse management process where the items received will be moved from the receiving docks onto their most ideal storage locations. An efficient and accurate put-away process ensures the safety of employees and the safe storage of items. It also helps maximize space allocation, eases tracking of items, and minimizes traveling time of products—which all ultimately enhance the whole warehouse experience.
In the storage process, it is important to keep items in their most appropriate location throughout the warehouse. Considerations include safety, space, and efficiency. To achieve optimum use of the facilities, warehouse managers can ask questions along the lines of:
Picking, as the name suggests, is the warehouse management process where employees locate and pick up individual items across the warehouse to fulfill orders. This is one of the most crucial steps in the whole process because it is directly tied to customer satisfaction.
The process of picking is also one of the most labor-intensive and most expensive activities for warehouses. So, optimizing this step not only enables businesses to efficiently manage orders but also to reduce errors, drive profit, and strengthen company reputation.
Next, we have the process of packing or packaging. This is the part where all the picked items for a specific customer are consolidated and prepared to be delivered. Considerations that have to be observed include components such as accurate packing slip, appropriate packaging materials (especially for fragile items), and the ideal packaging weight.
The primary goal of packing is to ensure that items will be safe and damage-free the moment they leave the premises of the warehouse until they are delivered to the customers.
Shipping or delivery is the culmination of all the previously-mentioned steps of warehouse management. With this process, relevant staff sends out the finalized orders while ensuring that the appropriate transportation mode is utilized to bring the items to the customers.
Shipping is only considered successful if the items are delivered with the correct documentation, at the right time, and according to the expected quality.
Empower your team with SafetyCulture to perform checks, train staff, report issues, and automate tasks with our digital platform.
Because there are several processes, people, and strategies involved to ensure its smooth operation, the industry of warehouse management also encounters numerous challenges. Aside from human errors and issues with warehouse safety, the following are some of the top challenges that the warehouse sector commonly faces:
To combat these challenges, businesses can always utilize tools or new technologies that could streamline warehouse operations and improve efficiency.
SafetyCulture is a highly-intuitive platform that businesses can use to manage the whole process of warehouse operations effectively. Aside from utilizing ready-to-use warehouse-related templates from the expansive Public Library, SafetyCulture can also help in proactively identifying issues in the procedures to promptly address them. This platform also enables you to do the following:
As a highly-integrated solution, you can also take advantage of the free training platform EdApp by SafetyCulture. With this app, you can train your employees, staff, operators, and other relevant people to perform their job, safely and efficiently. Through interactive and visually-appealing microlessons, your employees are empowered with useful insights to improve warehouse operations, anytime and anywhere.
In addition, SHEQSY by SafetyCulture can further enhance the way that things work. This lone worker technology reduces risk exposure to employees working alone or without direct supervision from higher-ups. In the context of warehouse management—operators, drivers, and warehouse staff can regularly conduct risk assessments as often as necessary for their daily tasks. This mobile-first solution also ensures that lone workers can easily identify, assess, and report hazards as soon as they happen.
Below are other readily available templates that you might find useful:
Tiffany is the Head of Customer QSHE Services at SafetyCulture, a chartered member of IOSH and an IOSH mentor with 17 years of health and safety management experience in freight forwarding, warehouse operations, science and manufacturing.
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