How to Control Inventory: 6 Crucial Tips

December 4, 2017

Warehouses and distribution centers vary widely, but they share a common challenge of how to control inventory.

To prevent out-of-stocks as well as excess, lost, and inaccurate inventory, there are six crucial tips and best practices that any warehouse or distribution center should follow.

1. Get organized and maximize space utilization.
Analyze your operation and look for opportunities to optimize the organization and utilization of your physical space.

Arrange your warehouse based on the most logical and efficient flow for all areas, including receiving, put-away, picking, staging, and shipping.

Better organization will help you find and track your inventory faster as well as eliminate errors and inefficiencies that cause out-of-stocks, excess or lost inventory, and costly slowdowns.

2. Error-proof your receiving.
Incoming products or materials should be verified and inspected immediately, and they need to be put away quickly and correctly. You’ll also want to document any shortages, damage, or defects.

To do this, create a receiving area with the space, layout, and systems to facilitate these activities. Typically this requires workflow automation, a warehouse management system (WMS), and barcoding or RFID technologies.

Using these tools, products or materials can be scanned, counted, verified, and documented automatically and then routed to their proper location.

3. Implement and automate cycle counts.
Cycle counts are a way to audit your inventory for accuracy and identify the causes of errors without conducting a full physical inventory. Rather than counting everything in your warehouse at one time, you count a small subset of your inventory in a specific location, and you conduct regular cycle counts throughout the year.

When moving to cycle counts, products are typically placed into categories based on ABC analysis. The highest-volume and/or highest-value items are placed in the “A” category. These products are counted more frequently or controlled and tracked more tightly because they typically have the biggest impact on overall inventory cost.

Others are placed in “B” and “C” categories in descending order of value, volume, and/or importance.

4. Institute quality controls.
Create a system to double-check all your picking and orders for accuracy, including checking each picked SKU and quantity against each order. You should also have a final quality check in place to ensure items are not damaged and the correct items are packed and shipped.

Fortunately, quality controls can be automated by using a WMS and handheld or wearable barcode scanners and mobile computers, which workers can use to scan and verify items against each order.

5. Automate forecasting and replenishment.
Institute a system to automatically capture and maintain an accurate account of your inventory levels, orders, and shipments. This will help you plan and forecast your future requirements and maintain the right stock to minimize costs and ensure flawless fulfillment.

Automation is easily achieved by using barcode labels and scanners, RFID tags and readers, and a WMS. These simplify data capture and give you access to reports so you can see a complete inventory picture across your entire operation.

6. Implement the right warehouse management system and technologies.
The right WMS will help you automate your processes, capture real-time inventory data, and implement all the best practices for better inventory control.

Combining WMS software and Zebra mobile technologies, our system automates inventory management and helps optimize the performance and profitability of warehousing operations.

Is it right for your warehouse?