For many companies, goods sit in warehouses before they are sold. In this lesson, we’ll look at how companies keep track of their inventory in warehouses using warehouse management systems.
What is a Warehouse Management System?
Have you ever been shopping for clothes and found the perfect outfit, but it’s just not your size? Or maybe it’s not the right color. Anyway, if you’re like me, chances are that you immediately chase someone down and ask them if they have the desired size or style in inventory, if not on display. Some smaller shops may still have people go look in a back room; however, for many large department stores, all it requires is a quick look on a computer or tablet.
The software that these people are using is a part of an inventory management system, which is a program that tells people what they have in stock. It is in turn a smaller subset of warehouse management systems, which are those methods by which companies can know what they have in stock at any given time. In this lesson, we’ll take a look at the uses of warehouse management systems and different types of warehouse management systems used by companies big and small.
Uses of a Warehouse Management System
The ability to check on different size for a customer is only one aspect that warehouse management systems can help with. Sure, every sale is important, but warehouse management systems are often focused on much more than that. They help make sure that retailers, whether as stores owned by the company or as independent retailers, stay in stock of the goods that they need. They provide up-to-date information about what is available in the nearest warehouses. As you can imagine, this is very useful. It provides production managers with the sort of data that they need in order to prepare the latest production batches.
Moreover, it’s not just about what is available but also where it is in a warehouse. Warehouses tend to be very large buildings, and mindlessly searching for inventory can take forever. Warehouse inventory systems provide a way of tracking inventory throughout the warehouse, even down to the nearest bay door in order to get it out and shipped.
Simple Systems
Now let’s take a look at some of the more basic forms of warehouse management systems. Let’s start with a system that requires just a pen and paper. Many smaller companies can just keep track of their inventory, due to the small size of it, on paper. Take a jeweler for example. A jeweler’s stock could fit in a small safe. A paper list of what a jeweler has will allow them to quickly check what needs to be ordered or made without having to open the safe every time.
What about slightly larger companies? Take a baker, for example. Bakers want to be sure that they are moving inventory quickly because no one wants stale bread. For this reason, many smaller companies make a spreadsheet with columns or rows customized for what they need it to do. It doesn’t have to be anything special, but it is a bit more involved than pen and paper.
More Complex Systems
Large companies with more complex inventories may appreciate the advantages offered by more advanced database systems. Let’s say that a company had a number of warehouses and facilities and the need to track movement through them. Database software can help them to not only tell where a particular item or batch of goods is but also help track them through the system to reduce inefficiencies in the future.
Finally, for companies that have larger demands with respect to warehouse management systems, there are entire software suites devoted to tracking goods. The sky is the limit when it comes to these systems, which not only combine the ability to track the history of a specific system but also use special bar codes or RF tags to keep even better track of each pallet in a warehouse.
Lesson Summary
Let’s review. Warehouse management systems are methods by which companies can know what they have in stock at any given time and let companies keep track of what is in their inventory without the need to constantly be counting boxes. For small companies, like jewelers or bakers, the needs for warehouse management systems can be met with basic spreadsheets, if not pen and paper. However, larger companies may have larger needs. If a company is trying to increase its efficiency, it may want to use a dedicated software suite, while larger companies that want to be extremely efficient benefit from programs that allow RF tagging and bar codes.