Warehouse management

For successful order fulfillment, products must be accurately and quickly packaged and delivered. These tasks take place in a warehouse where goods are stored and can be packed, labeled, and shipped. Find out why efficient and effective warehouse management is essential to ecommerce success and growth.

What is warehouse management?

Warehouse management is the process of running the most efficient and effective warehouse possible. It encompasses all the principles, strategies, practices, and procedures required to manage a warehouse’s daily operations.

Warehouse management includes inventory management, and both are a part of order management.

What are the basics of warehouse management?

Warehouse management involves five essential processes:

  • Tracking inventory
  • Picking and packing
  • Receiving and storage
  • Preparing orders for shipment
  • Reporting

These basic processes underlying warehouse management are intricate and present significant challenges. Handling those challenges successfully involves six fundamental tenets:

  • Accuracy
  • Cost control
  • Efficiency
  • Cleanliness
  • Safety
  • Security

What is warehouse performance management?

Warehouse performance management is simply warehouse management with an eye on improving selected performance metrics. These may be anything from customer retention rates to in-house processing speeds and profit margins. In each case, there could be different areas to focus on improving.

Total warehouse performance management requires the optimizing and integrating each process into a warehouse operation to ensure everything is working in harmony. By maximizing efficiency, you can minimize costs and increase productivity. 

Warehouse performance management tasks include selecting the best technology, delivery options, and shipping carriers for your needs. You'll also need to secure the ideal warehouse to meet your anticipated growth without the risk of outgrowing the space.

Collectively, these actions will help improve warehouse performance in terms of more efficiently receiving inventory, more quickly packing boxes, and providing faster deliveries.


What is SKU management?

SKU management is the use of SKUs, alphanumeric codes, to identify, organize, and track your inventory. A critical part of warehousing management, SKU management helps you easily differentiate between products and varieties of those products no matter how many you sell. Even if you start out only selling a few items, using SKUs to manage your inventory from the beginning will help you to better manage inventory when production grows, which in turn makes for a better-organized warehouse. SKU management can also help your business place and track orders and work with third-party suppliers.


What’s the importance of warehouse management?

Warehouse management can affect the success and growth of your business in many ways, most notably:

  • Customer satisfaction and retention
  • Maximizing capital and increasing revenue
  • Remaining competitive in your niche

What are the benefits of warehouse management?

Effective warehouse management benefits companies in significant ways, including logistical growth, processing speed, and improved storage.

Logistical growth

As your business grows, you’ll face new challenges regarding order fulfillment logistics. The more efficient your warehouse management, the better prepared you are to overcome challenges and grow your fulfillment logistics accordingly. These include details like:

  • How many dock doors warehouse workers can use at once
  • How you make use of available facility space
  • How many pickers and packers are on the warehouse floor throughout the day

Processing speed

With proper warehouse management, you can streamline operations and improve efficiency in your supply chain. Using common warehousing management strategies, you can establish different stations for these different stages of the order fulfillment process:

  • Picking
  • Packing
  • Processing returns
  • Labeling for shipment

When you have only one associate or team assigned exclusively to each station, that associate or team can concentrate on a single task. Task batching like this maximizes the rate of processing and shipping.

To further improve processing speeds, arrange your stations in the most logical and practical manner possible. For example, the warehouse manager should place each station so that the workers can easily pass their work on to the next station in the chain.

By organizing your warehouse processes in this way, you can help ensure packages get processed and shipped as fast and accurately as possible.

Improved storage

Standard warehousing management practices include storing each SKU in a dedicated location, such as a rack, pallet, bin, or shelf. Organizing your inventory storage in this manner helps your warehouse team to easily pinpoint the location of any particular item, accelerating the order fulfillment process.


What is a warehouse management system?

A software solution for simplifying warehousing management can help you systematically achieve the goals of warehouse performance management more quickly and easily through automation.

Often, you’ll find warehouse management system (WMS) software bundled into an integrated business performance suite of enterprise resource planning (ERP) software solutions.

An effective WMS can:

  • Use automation to leverage data for forecasting sales, conducting on-demand analyses, and improving efficiency in daily operations
  • Give insights into the quantity and location of inventory in real time
  • Share information with other modules in your ERP or with standalone software solutions like transportation management or accounting software
  • Track productivity and report on it to identify strong points to enhance and weak points to improve
  • Develop step-by-step instructions for accurately and consistently executing each daily process like picking, packing, receiving, and processing returns

If you’re exploring outsourcing your fulfillment, make sure you're asking the right questions when evaluating a warehouse partner.

Who handles warehouse management in a company?

The warehouse manager is responsible for a company's warehouse management. This professional personally handles or oversees:

  • Acquiring one or more warehouses as needed
  • Organizing warehouse space
  • Scheduling warehouse workers
  • Managing inventory
  • Fulfilling orders

What is the warehouse management process?

There are six fundamental processes constituting warehousing management. These processes work hand-in-hand, with each one impacting the efficiency of the subsequent one. As such, you must optimize all six steps to get the smoothest and most effective warehousing operation.

These steps are:

  • Receiving
  • Put-away
  • Storage
  • Picking
  • Packing
  • Shipping

Can I outsource my warehouse management?

Managing a warehouse will only be the responsibility of your company if you keep fulfillment operations in-house. If you choose to outsource to a third party like a 3PL or a 4PL, the warehouse will be managed by these companies, freeing you to focus on your business. You should vet how the warehouses used by a 3PL or a 4PL are managed to ensure they’ll meet their SLAs and work effectively on your behalf.

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