Warehouse Management

Warehouse management is an important part of merchandise management and describes all processes for managing goods within the warehouse. This includes, among other things, control, organization and monitoring of the individual processes from goods receipt to storage and goods issue.

What does warehouse management mean?

Warehouse management organizes and monitors all warehouse processes between goods receipt and goods issue and ensures smooth processing. It manages quantities and storage locations and thus enables the recording and checking of a company's internal logistics processes as well as the seamless tracing of individual items in the warehouse.

What processes take place in warehouse management?

Warehouse management includes, for example, the registration of changes in stock, information about warehouse statistics and the organization of packaging on pallets or in containers. This ensures control of stocks and access to warehouse key figures and important information at any time. For example, the warehouse management provides information about minimum, reorder or maximum stock levels or article locations. 

The individual areas at a glance:

  • Goods receipt (goods receipt, goods receipt control, goods inventory, putaway, returns management)
  • Internal warehouse processes (goods transport and storage, stock transfer, inventory, transfer posting)
  • Picking and packing for shipping (pick-by-voice, pick-by-light, multi-order picking)
  • Outgoing goods (preparation for shipping, handover to logistics service provider/transport company)

Organization in the warehouse

In the best case, the storage of products in the warehouse is based on the so-called ABC analysis. The A products with a high access frequency should therefore be located in the most accessible storage locations in order to be quickly and easily accessible. Products in the B classification are usually stored next to the fast-moving items at medium shelf height. C products, on the other hand, are located in storage locations that are further away from the aisle entrance or aisle exit or are stored very high up on the shelf.

In terms of product placement, a decision is also made between fixed, chaotic and mixed placement. In fixed or specific placement, fixed positions are assigned depending on the article number. In the case of the chaotic/aleatory principle, the placement takes place in any free storage location. The mixed form of the semi-aleatory principle means that depending on the goods, it is decided whether specific or aleatory placement is used.  

Terms used for inventory valuation

  • FiFo: First in, first out: What was bought first is sold first.
  • LiFo: Last in, first out: What was bought last is sold first.
  • HiFo: Highest in, first out: Products with the highest purchase value are consumed first.
  • LoFo: Lowest in. first out: Products with the lowest purchase value are consumed first.

Manual stock management

Especially in small companies, stock management is often done manually using Excel lists or papers. This simple form of warehouse management is possible without large investments, but quickly reaches its limits.

Warehouse management in the ERP system

Warehouse management can be integrated into the existing ERP system. In this case, all data such as orders, deliveries, purchasing, etc. are contained in the system. Through the integration, other areas such as replenishment or controlling also have access to the warehouse management data.

Warehouse management system (WMS)

A warehouse management system helps to have a constant overview of all goods in the company. In this way, all movements and processes are controlled, coordinated and optimized. The WMS is a software-based, inventory management system for better mapping of all goods movements and for better management, monitoring and control of warehouse processes. It is connected to the ERP system via interfaces and ensures that information on all goods (quality, storage time and location, shelf life, etc.) and orders is fed into the system. The WMS replaces manual processes with efficient and digital operations. This means that all movements in the warehouse can be displayed transparently and clearly at all times. The picking of goods into items ready for dispatch is also realized by a WMS. 

Many companies now rely on warehouse management software as a specialized, stand-alone system. In this way, digitization replaces traditional, manual operations with software so that errors can be reduced throughout the process.

Advantages of a warehouse management system

  • Greater transparency in the areas of inventory, shipping and tracking
  • Reduction of operating costs through better organization and division of the warehouse
  • Optimization of work scheduling for efficient employee deployment
  • Process simplification through automation
  • Paperless processing in the course of digitization with the corresponding advantages compared to classic paper document management
  • Easy training of new employees through intuitive data processing and perfectly matched hardware
  • Inventory security
  • Low error rate

Technologies in the WMS

Processes can be further simplified by using various technologies in the warehouse management system. Barcode scanners or applications for smartphones and tablets help with mobile data collection. Using the barcode, item or serial numbers, the device reads the information and transmits it to the warehouse management system. 

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