Stock or Inventory Management in a Warehouse

February 16, 2022

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The e-commerce business, to flourish the sales in the market requires appropriate space or warehouse to keep the stock in a safe and secured manner. Any business or company must ensure that they have sufficient supply stored in the warehouse to meet the needs and desires of the vast audience cost-effectively. Stock management is a pattern or process to manage or organize the stock effectively in the store.

The Direct-to-Consumer is the best business model to acquire and manage inventory stock management in the industries.

Certain variables impact the inventory or stock management in the warehouse:

  • Management of the pieces of stuff purchased and proper planning to store them.
  • You should maintain the quality of the products.
  • Advertisement and campaign of sales and its forecast.
  • The storage solution must be ideal that differentiate the inventory management for the optimization of the warehouse space and locate the appropriate centers for distributing the stuff.
  • To look at the real-time delivery of the brand products.

Inventory or the stock management methods

The stock management follows specific methods to perform the process prominently.

First in First Out (FIFO) method

The FIFO inventory management method is described as the good that arrived first in the warehouse will leave the store first. The stocks or inventory are maintained at optimal cost and follow the rotation to store the products securely. Such methods are used for perishable products.

Other industrial systems that they can accept to expand inventory management are compact systems, Pallet shuttle systems, and live storage systems for pallets.

Last in, First Out (LIFO) method.

LIFO stock management method described as the last stock added in the store will be the first to leave the warehouse. Such processes are used for non-perishable products that do not lose their value or expire over time. There are some systems like drive-in pallet racking and push-back racking to get the solution to implement the LIFO inventory management method.

ABC management method

In this method, the inventories are divided into A, B, and C categories.

  • Category A:

This stuff is of the highest stock value and requires special attention to look into. Category A includes the property that provides 20% of the inventory stock. Products in category A take the lowest positions to access the industries or warehouses.

  • Category B:

Category B of the inventories rotate less and occupy less control by the business or industries. Such categories include 30% of the inventory stocks. Lists are stored in batches rather than in the unit’s form.

  • Category C

The products in such categories rotate the least and include 50% of the stock management. The products are replenishable as they leave the warehouse stock and acquire the highest parts in the industry racking. As this stuff turns less, it is simple and easy to control.

Just In Time (JIT) model

Any industry trying to process the Just in Time model to run their stock management must have the raw material to its fullest for each product along with the minimum storage. The organization follows the process to get rid of the stock depletion. The automatic practice is a crystal-clear example of such a process.

Optimal order or Wilson’s model 

The optimal order model deals with inventory management, which considers the quantity and volume of the products to be placed on utilizing the proper stock management of the system. The model helps calculate the amount of the order available in the warehouse stock.

Cost of the stock warehouse management 

As a businessman, you must look into the cost management of the stock effectively for greater productivity.

Here are four main types of stock management of the warehouse stock:

  1. Purchasing cost:The purchasing cost is all about the amount paid for the products in each order to the supplier side. You can shift the amount to minimal if the quantity of the stuff increases when the order placed keeps on increasing.
  2. Cost of the order: The cost of the making order includes the management and administrative expenses in each order by the industries or the companies.
  3. Depletion of the Stock cost: Depletion of the stock occurs when customer demand is not met and due to which revenue is not generated and may include some indirect costs that may affect the business capability, potential, or credibility of the lost orders.
  4. Cost of Stock maintenance stock cost includes warehouse management costs, rental costs, staff costs, depreciation of the stock in the warehouse, insurance costs, and installation costs.

Types of Stock from the operational perspective:

Optimal Stock

The optimal stock deals in max-to-max profits. It manages the appropriate demand and profit at the stored stuff.

Zero Stock 

The stock is connected to the Just in Time (JIT) model, which is featured according to market demand and reduces the store from the warehouse. In the case of the automotive sector, it features zero stock.

Physical Stock

The stock available in the warehouse is described as physical stock.

Net Stock

Net stock is calculated by subtracting the unused stock from the current inventory available in the warehouse.

Available Stock

It adds the stock in the warehouse along with the orders that are not met from the supplier side.

Warehouse management is an essential operation to be handled effectively for the growth of the business. The Warehouse management system stores the perishable and non-perishable items in different ways for the future delivery and consumption of the things by the audience. The flow of the goods depends upon the type of stock, planning, and strategies of purchasing the brand products, controlling the resource, establishing a more powerful bond between the buyer and the supplier, looking at the storage of the stuff prominently.

Want to grow your business?

Your staircase to
growth is here!

Quick tricks for growth:

  • Reconciliation of overcharges
  • Single inventory dashboard
  • Reduced order processing time
  • Standard and accurate data

Want to know how to do this? Don’t worry!



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