Multi Warehouse Inventory Management Archives – unicommerce.com

Multi-Warehouse Inventory Management: Challenges and Solutions

Team Unicommerce — Mon, 05 Aug 2024 12:04:44 +0000

Table of Contents

Introduction
What is Multi-Warehouse Inventory Management
Challenges of Managing Inventory in Multiple Warehouses
– Lack of Inventory Synchronization
– Challenges in Inventory Allocation
– Inefficient Inter-Warehouse Stock Transfers
– Substandard Order Routing Process
– Underutilized Warehouse Space
Let’s Manage Multiple Warehouses with Ease
Frequently Asked Questions (FAQs)

As your business grows, so does your inventory. And with more products to store and manage, one warehouse isn’t enough. So, it’s time to expand to multiple locations! But with great growth comes great responsibility (and a few headaches).

The transition from a single warehouse to a multi-warehouse operation introduces various challenges, the most common of which is inventory management.

So, how do you keep everything running smoothly across these multiple locations?

Don’t worry; we’ve got the answer for you. With the right strategies and tools, you can tackle these challenges head-on and keep your operations smooth. Let’s dive in!

What is Multi-Warehouse Inventory Management?

Multi-Warehouse Inventory Management is the strategic distribution and control of inventory across multiple storage locations to optimize operational efficiency and meet customer demand. It involves coordinating the storage, tracking, and movement of products across multiple warehouses so that the orders are timely fulfilled.

It’s all about strategically placing your goods closer to your customers’ locations so you can deliver faster and save on shipping costs. Consider a company like Blinkit, a prominent online quick commerce service in India. Blinkit strategically positions its warehouses in major cities such as Delhi, Mumbai, Bengaluru, and Chennai. Also, within these cities, the company operates various dark stores.

These are small, localized warehouses or fulfillment centers that are located closer to residential areas. This approach makes sure that products are readily available near customers, which reduces SLA breaches and facilitates faster order processing.

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Challenges of Managing Inventory in Multiple Warehouses

Managing inventory across these warehouses isn’t as easy as it sounds; it comes with its own set of challenges. Let’s try to decode the solutions to these challenges!

1. Lack of Inventory Synchronization

It is one of the primary challenges in multi-warehouse inventory management. This issue arises when inventory data is not updated in real-time across all warehouses, leading to inconsistencies and inaccuracies.

Neemans, a shoe brand, encountered similar challenges. Because its products were available in multiple warehouses, it struggled to maintain accurate inventory records. This led to issues in tracking product availability, resulting in overstocking in some locations and stockouts in others.

The brand adopted a robust tracking and inventory management system to overcome these challenges and synchronize inventory across all warehouses.

2. Challenges in Inventory Allocation

Allocating inventory to multiple warehouses can be challenging for brands if it’s not handled carefully. The key question is figuring out which products should go to which warehouse.

Since each warehouse has its own mix of products, it is very important to strike the right balance to avoid running out of stock or having too many products.

Data and reports really help with this problem. They help businesses make smart decisions about where to allocate their inventory. By setting clear rules, brands can ensure everything runs smoothly and their products get where they’re most needed.

3. Inefficient Inter-Warehouse Stock Transfers

When you are dealing with multiple warehouses, each facility often serves different purposes, such as a parent warehouse that can be used for product assembly and child warehouses that can be used for e-commerce fulfillment. This warehouse ecosystem can pose logistical challenges, particularly in ensuring seamless inventory transfers between locations.

A significant issue is inventory damage during transit. It’s common for items to get flawed or damaged, and without proper documentation and tracking, these discrepancies can pile up. This leads to more damaged goods and no way to reconcile them in the records.

For example, a leading children’s wear brand in the Philippines faced this challenge. They tackled it by implementing a gate pass scanning system designed specifically for multi-warehouse operations. This system ensured smoother and more accurate stock movement, significantly reducing the problem.

4. Substandard Order Routing Process

Brands often encounter challenges routing customer orders to the right warehouses, which can lead to frustrating shipment delays and SLA breaches. For instance, Upscalio is a technology consulting and software development company that partners with digital-first brands selling on e-commerce marketplaces.

The brand faced similar issues until it implemented a Unicommerce’s sophisticated warehouse management system that uses proximity-based order allocation within its warehouses. This system allowed orders to be fulfilled from the nearest locations where inventory is readily available. If inventory isn’t available in the nearest warehouse, the system intelligently routes orders to the next closest facility.

You can also optimize order allocation using parameters such as order priority, warehouse capacity, etc. This approach enhances order fulfillment speed by reducing delivery times and ensuring accurate order processing.

5. Underutilized Warehouse Space

Another big challenge in managing inventory across multiple warehouses is not making the most of available space. This happens when warehouses aren’t organized efficiently, leading to wasted storage capacity and higher operational costs.

To address this challenge effectively, sellers can analyze their warehouse infrastructure, layout, and operations to understand current usage patterns. You can then create a warehouse plan, optimize storage by using shelf management systems to assign dedicated shelves and create distinct zones for efficient inventory management.

For example, dedicated shelving for different inventory types, like fast-moving vs slow-moving items, can boost storage efficiency. Inventory practices, such as prioritizing upcoming orders and storing them strategically, will help you minimize underutilized space and enhance overall warehouse efficiency.

Let’s Manage Multiple Warehouses with Ease!

Managing inventory across multiple warehouses is undoubtedly challenging, but with the right approach, it can greatly enhance your e-commerce business operations. Using a robust warehouse management system with features like inter-facility stock transfer, precise order and inventory allocation, and effective shelf management is key to streamlining warehouse operations.

By optimizing how you organize and move inventory across your warehouses, you can ensure orders go out on time and customers stay happy. Whether it’s preventing stock shortages, speeding up deliveries, or making the most of your storage space, a well-planned approach can make a big difference.

So what are you waiting for? Embrace these practices and tools to easily manage your network of warehouses today!

Frequently Asked Questions (FAQs)

1. What is the warehouse inventory cycle?

Warehouse inventory cycle is the process of regularly counting a small portion of your inventory on a regular intervals. Also known as cycle count this auditing method helps you identify and correct discrepancies in inventory levels.

2. What is the difference between a warehouse control system and WMS?

A Warehouse Control System (WCS) manages real-time warehouse operations and is responsible for managing material handling equipment like conveyors, pick-to-light modules, carousels, etc. On the other hand, a Warehouse Management System (WMS) handles broader warehouse functions such as inventory management, picking, packing, and shipping.

3. What is the role of automation in warehouse management?

Automation in warehouse management improves efficiency by automating tasks like order processing, inventory tracking, and replenishment, reducing human error and speeding up processes. By automating tasks, you can optimize the use of space and resources, enhance inventory accuracy, and improve the overall productivity of your warehouse.

Multiple Warehouse Management in E-Commerce: Factors To Consider Before Opting

Team Unicommerce — Thu, 26 Oct 2023 04:02:19 +0000

E-commerce is quickly shaping up to be the preferred way of doing business for emerging brands and brands that have previously maintained a steadfast offline presence. Today, everything is sold online, from groceries to pharmaceuticals, financial services to education, and consumer goods to luxury items.

As customers are learning to buy different products and services online, their expectations for variety, convenience, and service are also increasing. With the exponential growth in market demand, e-commerce companies are establishing new marketing and sales channels.

At the same time, efforts are being made to achieve operational efficiencies that can elevate the customer experience while adding to the bottom line. To maintain an omnichannel presence in the market, e-commerce providers have to set up multiple warehouses and manage a complicated value chain.

Factors to Consider When Selecting Multiple Warehouse Management In E-commerce

This is impossible to do manually, and thus, there is an undeniable need for an online multi-warehouse management system that can automate several aspects of warehouse management system (WMS). But before opting for a multiple warehouse management system, certain key factors must be considered.

1. Centralization of Multi Warehouse Inventory Management

Automated inventory synchronization across warehouses can enable you to manage orders and multi-channel distribution pipelines with better efficacy. Therefore, first and foremost, the multi-warehouse management system of your choice should offer you a centralized view and control of your inventory.

Not only should the inventory turnover of each SKU (Stock Keeping Unit) in your multiple warehouses be accounted for, excessive stock and stock-out situations should be duly recorded and notified. Centralized control can allow you to route stock from overstocked locations to stock-out locations, ensuring minimal order delays and cancellations due to operational inefficiencies.

2. Real-Time and Customizable Reporting

Next, you need real-time information access about what’s going on in your warehouse network to manage stock inventory effectively. You require a bird’s eye view of which stock units are in demand and which haven’t moved at all, geographic market-specific demand variations, and seasonal trends. You should also be able to generate customizable reports to analyze inventory status and strategize warehouse utilization.

An online multi warehouse management system can enable you to achieve this, as the information remains remotely accessible and available in real-time. Furthermore, you should also be able to run day-to-day operations with dynamic dashboards and reports.

3. Shipping and Logistics Integration

A significant percentage of the operational cost for your e-commerce business comes from shipping and logistics. Therefore, another critical factor that can boost multiple warehouse management is how well your system integrates with shipping and logistics aggregators. In doing so, you can capitalize on their existing logistic network and shipping efficiencies without over-extending your resources.

Furthermore, strategic integration between warehouse and logistics can increase your order fulfillment efficiency and reduce duplication of information within the system.

4. Virtual Multiple Warehouse Inventory Management

Unutilized or under-utilized warehouse space increases your inventory carrying cost and burdens your value chain, even when you have a network of multiple warehouses to match market demand. You need a multi-warehouse management system that gives you a complete virtual view of warehouse space to facilitate space planning and allocation.

Inventory thus stocked can have better visibility and accessibility. At the same time, your order processing time can go down significantly, leading to delightful customer experiences.

5. Accountability and Quality Control

The stock maintained in multiple warehouses and logistics pipelines is susceptible to damage, theft, and obsolescence. And customers who unsuspectingly receive such stock would be forced to return the product and walk away with a negative experience with your brand. This is where the vitality of frequent quality checks and quality control standards comes in to maintain your inventory health.

With barcode or QR code-based inventory management, this can be easily implemented across multiple warehouses at minimal additional cost. You can easily avoid fulfilling orders with defective or damaged stock and replace the same with quality stock. If multiple warehouse inventory management software can do this for you, you can save millions in returns and passive inventory value loss.

6. Returns and Exchange Management

Products returns and exchange is an inevitable part of the e-commerce business, which, if left unchecked, can dramatically reduce sales and operational performance. Therefore, you need a multi-warehouse inventory management system to regularize the returns and exchange process.

There should be a systematic log of returned or exchanged products, their dispatch and receipt warehouse locations, and subsequent actions taken. At the same time, you should be receiving customer behavior insights that can minimize product returns in the long term.

In sum, you can ensure that your multiple warehouse network is optimally managed by considering these factors before opting for any multiple warehouse inventory management software. Through smart automation, reporting, and integration, you can use multiple warehouse management to boost e-commerce sales as well as consistently deliver on your brand’s promise.