7 Things to Know before Implementing Inventory Management System

20-09-2021 17:08:17 Comment(s) By Abir

Before one takes the plunge of implementing an inventory management system within a distribution center, one must go back and forth in ensuring that the money that has been pumped in in the form of investment does not go null and void. These considerations go well beyond simple financial audits and have to do with deep contemplation into the business and the whereabouts of it.

If one has to put forth in simple words, the answer to this question, ‘What does WMS do?’, then the response would be that it streamlines the entire supply chain operation and thus takes the center stage in the supply chain ecosystem. The whole ambit of the order fulfillment process, ranging from sourcing to inventory control and from shipping to order return management, is taken care of by the centralized warehouse management system.


As it has been mentioned, inventory management is one of the key components of WMS functionality. Over the years, it has gained prominence due to the service it renders in keeping the record of warehouse inventory clean and accurate.


Reasons behind the Sudden Thrust over Inventory Management System


The inventory management system is that dynamic solution that keeps the record of the inventory within the warehouse. Various methods and approaches of inventory management are applied to ensure the optimum result and to make sure that the products are procured and/or shipped on time. At the center of a competent inventory management system resides the keenly insightful data that notifies the warehouse of the availability/unavailability of products and the changing trends, demands, and patterns so that warehouse resilience is swiftly achieved.


A centralized inventory management system is one of the most pre-requisite things to run warehouse operations smoothly for big retailers and e-commerce platforms. These organizations having multiple distribution centers across a geographical location need to depend on their sister warehouses regularly to strike the balance between supply and demand curves. Without proper software support to coordinate amongst them, the entire objective of communications would collapse.


It has been conspicuously noticed that warehouses lose out on a lot of useful time and resources in optimizing the first-mile movement. In most cases, these actions bear no fruit and end up in smoke if a proper inventory management system is not there to provide a buttress. The chaos in most cases results out of the lack of knowledge about the product’s unavailability and the exact location of the products. Subsequently, the warehouse workers hit panic mode, run helter-skelter and thus end up doing something that Shakespeare would have called, “Full of sound and fury/Signifying nothing”. This nothingness of disruption can be faithfully avoided with an efficient inventory management system.


 The Things One Must Ensure before Implementing Inventory Management System

  1. Identify the Most Suitable Technique: There are several inventory management techniques available in the logistics vertical. Some of them include ABC inventory, FEFO, FIFO, LIFO techniques etcetera. One of the very first and foremost things that a warehouse must do is that out of the pool of methods at their disposal they must choose the one that cuts the coat according to the cloth. The warehouse must consider what kind of products they are dealing with and the features that they have. In accordance with the product dynamics, the most appropriate inventory management technique is chosen so that the warehouse space is optimized and zero wastage is ensured.
  2. Integration: The whole objective of having a centralized inventory management system gets ruptured if there is no proper format of integration. In order to gain better visibility into the products’ supply chain and to offer seamlessness and the same degree of effectiveness across the supply chain, integration with other solutions to get an overarching view over the supply chain becomes a very important factor. Companies that wish to dabble into inventory management must look into this factor.
  3. Set Up a Proper SOP: Standard operating procedure which is known by its abbreviation SOP, is the properly documented step-by-step instructions that help workers carry out operations. Whatever is done in implementing or operating the system must be duly documented so that it may function as a reference point for the future. Once the SOP is built up, it can be referred to and adhered to strictly to attain optimization.
  4. Know the Stock Levels: The most important thing to consider before a suitable inventory management system is implemented is that companies know their stock levels in and out. The details of the stock, including their features, their demand, and sales velocity should be under the grasp of the companies so that all their future actions are based on that. Furthermore, each company must have its threshold limits so that as soon as the stock reaches certain limits, the inventory management system informs the warehouse that the stock needs to be replenished.
  5. Staff Training: Human force is the best asset of any company. If properly trained and utilized, they can bring better results than the companies can even expect. Thus it bears upon every company that before they implement anything new, they must duly train their staff about the new design, methodology, technology et al. They must be brought in to consensus that they follow the SOPs. With the proper training and monitoring, the warehouse’s workforce can yield tremendously profitable results without much scope of wastage in time and money.
  6. Re-think the Warehouse Layout: One major concern that is sadly often neglected is the warehouse layout or design. The warehouse is an expensive space and every square inch of it must be utilized to its hilt. It must also be kept in mind that products are not huddled together or kept in such a way that it may evoke confusion among pickers. Sometimes, it is also judicious that the warehouse space is vertically increased to accommodate the increased flow of products. At others, the length of the aisle space needs to be considered before digital application so that warehouse equipment can do their work without any hint of obstruction. The design needs to be based on the type of warehouse, the kind of products it harbors, and its tools. The layout must be reviewed at fixed intervals so that it remains updated with the upgraded technological advancements and methods.
  7. Have Actionable KPIs: The success of any new enterprise is gauged against some yardsticks. The parameters that are set against the inventory system operations are Key Performance Indicators or KPIs. Every company must set up a solid KPI to judge the performance of their investment and to track how the solutions are faring. Without a proper set of KPIs, the whole venture takes the form of a lost ship that doesn’t know where to sail.

 

Concluding Ideas

Warehouse automation or initiating a new solution in the fabric of the system is a tiresome task. Apart from looking over the financial pros and cons of it, the above-mentioned factors indeed need to be looked into before taking the leap. Otherwise, a whimsical decision may lead to financial drainage rather than securing a vantage point. However, once all the internal and external factors are judged even-handedly, WMS or inventory management system must be chosen very wisely. Only a carefully cultivated solution like that of Rattusapps can yield fruit that would be of greater use. With decades of expertise and years of research, the system has been developed by the Rattusapps team and it can ensure a handsome ROI in the long haul. Hence one must choose judiciously to stay abreast.

 

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