Meet Aidan and Sam, a young couple who take a woodworking class together to find a hobby they both enjoy. Their new pastime quickly becomes a passion, and before long, they start a business creating beautiful, unique furniture from reclaimed wood.
But after two years, Aidan and Sam’s operations have outgrown their garage, and the couple has more work than they can handle on their own. They have a warehouse and the inventory to fill it — but they misplace orders, report inaccurate stock levels, and end up with frustrated customers.
The good news is that this problem is easy to fix. Aidan and Sam’s business needs a warehouse inventory management system, also known as a warehouse management system (WMS), to control stock and streamline fulfillment.
Warehouse inventory management systems: An overview
A WMS is a software solution that tracks and manages inventory levels, locations, and movements within a warehouse. It uses technology like barcode scanners to identify where items are at all times, providing immediate visibility into the status of your stock.
For growing companies like Aidan and Sam’s, a WMS is an absolute must. It speeds up nearly every in-warehouse process, like sorting incoming orders, picking and packing, shipping, and updating stock levels. This saves time and offers the valuable insights you need for informed decision-making.
5 benefits of using a warehouse inventory management system
No matter what you store in your warehouse, adopting a WMS is worth the financial and time investment. Here are some of them.
1. Enhanced inventory control
A WMS provides real-time visibility into inventory levels, allowing you to accurately monitor product movement and identify discrepancies quickly. This reduces the risk of stockouts, overstocks, and lost or misplaced items, ultimately optimizing the use of storage space and lowering carrying costs.
2. Streamlined order fulfillment
With a WMS, you optimize the entire fulfillment process, from order picking and packing to shipping and returns. This ensures accurate and timely deliveries, which keeps customers happy and eager to buy from you again.
3. Data-driven decision-making
This software uses your stock data to generate valuable reports on inventory levels, sales trends, and warehouse performance. Warehouse managers can use this information to identify patterns and make informed decisions that drive operational efficiency and improve profitability.
4. Improved productivity and efficiency
A WMS automates routine tasks like inventory tracking, order picking, and replenishment, freeing up staff to focus on higher-value activities. This increases productivity and also reduces labor costs.
5. Cost reduction
While implementing a WMS is an investment, it saves you money over time. By optimizing inventory levels and identifying slow-moving or obsolete items, a WMS avoids holding expensive stock, letting you discount or liquidate these items. Plus, automating routine tasks reduces the need for manual labor, leading to significant savings on staffing. And a WMS is much less prone to human error.
Types of warehouse management systems
When choosing a WMS, you can opt for an on-premises or cloud-based solution. Here’s a quick overview of the differences.
On-premises WMS
Installed and maintained on a company’s servers, on-premises WMSs offer greater control and customization. But the downside is that they require significant upfront investment and ongoing IT support. For smaller businesses, implementing an on-premises management solution would mean purchasing servers, finding a place to put them, and hiring people to oversee the system — and those steps are often too expensive.
Cloud-based WMS
Cloud-based systems, hosted on remote servers and accessed via the internet, are typically more affordable and easier to implement than on-premises options. They also offer automatic updates and seamless accessibility from any location with an internet connection. These systems are less customizable, but they certainly do the job for any business looking for a functional WMS.
8 best practices for an efficient warehouse inventory management system
While a WMS is a smart way to take control of warehouse inventory, you and your team need to know how to use it effectively. Following these best practices will help.
1. Conduct regular audits
A WMS knows how to track inventory as accurately as possible, but it’s not immune to errors. Perform periodic inventory counts to verify the data’s accuracy and identify discrepancies — that means physically counting the items in your warehouse and comparing them to the records in the system. If you choose a solution allowing barcode scanning, you’ll be surprised how quickly these audits go by.
2. Implement a barcode system
Barcode scanning technology is a common WMS feature, and it’s a highly efficient way to automate data entry, improve inventory accuracy, and speed up processes like receiving and packing. Barcodes provide a unique identifier for each SKU, making it easy to track inventory movement and reduce miscounts. Each time a product moves, just scan the barcode and the WMS updates its status.
3. Offer proper training
You don’t need everyone on your team to have expert knowledge of the WMS. But warehouse personnel do need to be trained on the features and functions they’ll use, like barcode scanning. And since most WMS companies update their software often, you should offer periodic refresher training to make sure employees learn what they need to know to do their jobs. This helps you make the most of the system.
4. Optimize your warehouse layout
A WMS is only as helpful as the rest of your space, and that includes warehouse layout. Design the area to minimize travel time and maximize efficiency. Strategically place high-demand items in easily accessible locations and group similar items together to make things easier for staff. An optimized layout reduces the time and effort it takes to locate and retrieve items, improving order fulfillment speed and overall productivity.
5. Use real-time data monitoring
One of the most valuable parts of a WMS is real-time data monitoring, which gives you reliable insights into inventory levels, order statuses, and warehouse performance. Staying on top of these metrics enables proactive decision-making, allowing you to identify bottlenecks and respond quickly to supply chain issues or changes in demand.
6. Look for a solution that integrates with other systems
As your company grows, you’ll use several systems for different business areas. The right WMS should offer integrations with all of this software, like your enterprise resource planning (ERP) system, customer relationship management (CRM) system, and accounting software like QuickBooks.
When these systems work together, you enjoy seamless data flow, eliminate the need for manual data entry, and have a more comprehensive view of your business. Order management and coordination between departments also become much easier.
7. Use demand forecasting
A good WMS gives you access to historical sales data to accurately forecast demand, ensuring the right products are available at the right time to keep customers happy. And by understanding demand patterns, you can optimize inventory levels, avoid stockouts, and reduce carrying costs, which are the expenses that come from storing and managing inventory.
8. Practice continuous improvement
Establishing an effective system isn’t one-and-done. Regularly review your warehouse processes and leverage the WMS’s reporting and analytics features to identify areas for improvement. By continuously striving for a better system, you optimize warehouse operations and set them up to adapt to changing market conditions.
How to choose the right warehouse inventory management system
When choosing warehouse management software, consider factors like budget, industry-specific needs, and scalability requirements. You want a solution that can grow with you, and there are plenty of WMS software options out there — though Fishbowl is a top contender.
A solution like Fishbowl is perfect for small-to-mid-sized businesses because it combines comprehensive features with a user-friendly interface and affordable plans, all with room to grow.
Fishbowl empowers businesses to:
- Gain real-time visibility into inventory levels across multiple locations
- Automate routine tasks like reordering and cycle counting
- Streamline order management, from picking and packing to shipping
- Gain insights into inventory trends and performance
- Integrate seamlessly with other business systems like QuickBooks
Fishbowl’s solution for warehouse inventory management
Enhanced inventory control. Streamlined order fulfillment. Improved productivity. These are just some of the major benefits of using Fishbowl to manage your warehouse inventory.
Fishbowl is the all-in-one inventory management solution designed to track stock, warehouse operations, and manufacturing workflows. If you’re ready to take control of your warehouse and gain end-to-end visibility over your operations, schedule a demo today.