10 essential warehouse processes

These are the 10 important warehouse processes that warehouse managers or management needs to be aware of to run a warehouse efficiently. Having a common process helps employees understand effectively what they need to do to best serve your customers, in turn more profits for your company.

Receiving Orders

It is very important to know what is the WMS is intended. What problems is the most important to solve at your warehouse? We have consulted various clients that has different objectives for the system

  1. Unloading: Goods are unloaded from transportation vehicles.
  2. Verification: Check the received goods against purchase orders and delivery notes.
  3. Inspection: Inspect goods for damage and quality.
  4. Documentation: Record the receipt of goods and update inventory records

 

Labelling

Labelling or Putaway is used to identify a unique product or SKU , important to identify the age of the item in the warehouse, especially when there is an expiry or shelf life. Depending on your nature of business, this process is very much dependent on the SKU

General types of product Identifications:

  • Produce or Fresh food, no SKU - In this case it is important to go by Location to identify the Receiving Date of the produce or fresh food. In most cases there will be a Packing process to include a packaging and SKU so the produce can be distributed in supermarkets and groceries
  • One SKU for one product or variation - Likewise to ensure the Receiving Date of the product, having a Location in your warehouse is important so that the system tracks the receiving date for LIFO, Last In First Out operations or FIFO, First In First Out during the Picking process below.
  • Products with Serial Numbers - Serial Numbers are one the best ways to be able to tell exact information about a product, this mostly happens in electronics and machineries sector
  • Other Considerations:
    • Barcode scanners will be a great way to enhance the speed of the process. You will see them in every product in a shop, supermarket or groceries 
    • QR Code or Quick Response Codes in some ways are more sophisticated Barcodes as they can contain a lot more information, including the information like ingredients 
    • RFID or Radio Frequency Identification due to its unique features that does not require 

The Process of Labelling :

  1. Labeling: Label goods with barcodes or RFID tags for tracking.
  2. Storage Assignment: Assign storage locations based on item type, size, and demand.
  3. Transport: Move goods to their assigned storage locations.
  4. Placement: Place goods in designated locations, ensuring they are easily accessible

 

Storage & Location

Storing the product or item is important for the retrieval of the item, during a sales process or inventory adjustments. In a typical warehouse , having a Location is important. Location can mean the physical location, a different warehouse or a shelf within a warehouse. By knowing the Location of the product we can immediately retrieve the right product for the right customer.

  • Organization: Arrange goods in a logical manner for easy retrieval.
  • Inventory Management: Maintain accurate records of inventory levels, locations, and conditions.
  • Condition Monitoring: Regularly check stored goods for quality and compliance with storage conditions.

FIFO, First In First Out

FIFO is the most common method of picking process, as it means that the oldest inventory items are first picked, sold or used first. This method assumes that items that enter the warehouse first will also be the first to leave

  1. Perishable Goods: FIFO is ideal for products with a limited shelf life, such as food, pharmaceuticals, and cosmetics, to ensure that older stock is used or sold before it expires.
  2. Regulated Industries: Industries with strict regulations on product expiry dates often use FIFO to comply with safety and quality standards.

LIFO, Last In First Out

LIFO means that the most recently received inventory items are sold or used first. This method assumes that the newest inventory items are the first to leave the warehouse. LIFO is less common for several reasons but we see them in several scenarios: 

  1. Non-Perishable Goods: LIFO can be used for non-perishable items, such as construction materials, where the shelf life is not a concern.
  2. Inflationary Periods: In times of rising prices, LIFO can help match current costs with current revenues, reflecting a more accurate profit margin.
  3. Contractual Obligations: In certain companies especially when shipped abroad , there is a requirement to cater for a minimum shelf life for a products that is being delivered

 

Picking

Once you have established what is the main pain point to solve with WMS, you need to consider different aspects of implementation of an effective WMS. We have consulted various clients that has different requirements for the system

  1. Order Generation: Generate picking lists based on customer orders.
  2. Route Optimization: Plan efficient picking routes to minimize travel time.
  3. Picking Execution: Retrieve goods from storage locations according to the picking list.
  4. Verification: Verify picked items against the order to ensure accuracy.

Packing

Once you have established what is the main pain point to solve with WMS, you need to consider different aspects of implementation of an effective WMS. We have consulted various clients that has different requirements for the system

  1. Packaging Selection: Choose appropriate packaging materials to protect goods.
  2. Order Consolidation: Consolidate picked items for individual orders.
  3. Labeling: Label packages with shipping and handling information.
  4. Quality Check: Inspect packages to ensure they are correctly packed and labeled.

Delivery

Once you have established 

  1. Carrier Selection: Choose appropriate carriers based on destination, cost, and delivery time.
  2. Documentation: Prepare shipping documents such as bills of lading and shipping labels.
  3. Loading: Load packages onto transportation vehicles.
  4. Dispatch: Send out shipments to customers or other destinations

Returns

Return Orders or Return Processing involves the process when the client returns products being delivered. A proper Return process ensures that the products that are in good conditions be returned to the right Location for the next Sale and removal of a defective product

  1. Receiving Returns: Accept returned goods from customers.
  2. Inspection: Inspect returned goods for damage and usability.
    1. Restocking: Return items to inventory if they are in good condition. Usable products will be returned to the Location in a system for the next Sale.
    2. Disposal: Dispose of or recycle damaged or unusable goods. Damaged or Defective products will be removed from the product through Inventory Adjustments 

Inventory Control

Once you have established 

  1. Cycle Counting: Regularly count a subset of inventory to ensure accuracy.
  2. Stock Audits: Conduct full inventory audits periodically.
  3. Inventory Adjustments to properly report the accurate count when Sales process
  4. Replenishment or Purchases: Reorder goods to maintain optimal inventory levels.
  5. Shrinkage Management: Monitor and manage inventory shrinkage due to theft, damage, or errors.

Warehouse Management

The process of Warehouse Management in this phase is not intensive but nevertheless depending on the frequency of the products in and out of the Warehouse, the frequncy of this process ranges from once a year to once every month. 

  1. Space Utilization: Optimize the use of available storage space.
  2. Labor Management: Schedule and manage warehouse staff to ensure efficient operations.
  3. Equipment Maintenance: Maintain and service warehouse equipment to prevent downtime.
  4. Safety Compliance: Ensure compliance with safety regulations and protocols to protect workers and goods.

Reporting Data

Stock movements with proper audit trails including Returns, and Disposal will help to audits and reporting of the Reporting

  1. Tracking: Use WMS to track inventory levels, orders, and shipments in real-time.
  2. Reporting: Generate reports on warehouse performance, inventory levels, order fulfillment, and other key metrics.
  3. Analysis: Analyze data to identify trends, optimize processes, and make informed decisions.

Summary

Not every company and every industry will have the same process, in our process of consulting , all companies pick and choose process that is relevant to them. It is important to know what are the processes that is applicable to your company

We believe every company is unique with different processes, even within the same industry. We work with our clients to make sure the processes fits your company, instead of the other way around.
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