Inventory Management for the Small to Mid-Sized Business

This article will begin a series on best practices in setting up and managing your inventory and your warehouse.  You don’t have to be a big business to use technology to improve your inventory management processes.  In fact, if you are a smaller company it’s that much more important that you control even minor costs.  A well-designed inventory control system will save you money, improve customer service and reduce stress for your manufacturing and warehouse personnel.

Inventory management software, especially one that uses barcode technology, is a key tool to the success of controlling your inventory – but it isn’t the first step.  Before installing any software or other technology products, it’s important to have a well-designed warehouse and a process of moving inventory in and out of the warehouse that works smoothly.

Choose a leader for this project – someone who understands the multiple departments and uses of your inventory.  If you’re a small company, one person may be enough.  If you’re larger, form a committee from different departments – it will not only produce a better plan but when people are involved in planning there is more overall buy-in.

Warehouse Design

There are companies that specialize in laying out efficient warehouses – it can be a complex planning process.  Unless you have literally thousands of items and need some advanced warehouse management processes, the best way to lay out your warehouse, is by using common sense.

  • Group the fast-moving items together and toward the front of the warehouse for easier access.
  • Decide if you want to store in order of part number or if the size of your items is too variable for that – but in any  case use a logical layout.  Put groups of like items together, for example.  You want it to be intuitive for your warehouse workers.
  • Are you using shelving?  Leave room for new part numbers or excess inventory – and/or figure out where you can put overages if the shelves are full.
  • Are some of the items in large boxes or too large individually for shelving?  Designating a floor “location” is often the best choice.  The location can be up against a wall or taped off in the middle of the warehouse.
  • Determine a numbering scheme for your locations. (Example:  Section A, Shelf 1 = Location A1)
  • Are the inventory items going to be boxed or bagged?  If they are not, you will need bins for the smaller items.  Some companies ask their vendors to package smaller items in specific quantities for easier picking.  If you always use the item in quantities of 10, get them pre-packaged that way.

The next article will discuss Labeling your Warehouse.