Effective methods of warehouse management in Logistics

Warehouse management in Logistics is one of the important activities, helping companies optimize costs, improve operational efficiency and better meet customer needs. In the article below, 1C Vietnam will provide businesses with specific information about effective inventory management methods in Logistics.

1. What is warehouse management in Logistics?

Warehouse management in Logistics is a collection of tasks related to organizing, arranging, monitoring and controlling activities of importing, exporting and storing goods in the warehouse. Warehouse management plays an important role in the supply chain, helping businesses ensure quality, quantity, cost and time requirements of goods in the warehouse.

2. Benefits of warehouse management in Logistics

With the development of Logistics, warehouse management activities become more meaningful and bring many benefits to businesses including:

• Enhance business efficiency: Proper warehouse management helps businesses minimize storage, transportation and handling costs of goods, thereby improving business efficiency.
• Enhance competitiveness: When warehouses in Logistics are well managed, businesses can quickly respond to customer needs, increase their satisfaction and loyalty, thereby enhancing competitiveness in the market. market.
• Improve product quality: Effective Logistics warehouse management allows businesses to ensure that goods are stored in safe and quality conditions, thereby improving and enhancing product quality.
• Minimize risks: Enterprises that perform well in Logistics warehouse management will create favorable conditions to minimize warehouse-related risks, such as loss, damage of goods or fire and explosion.

3. Classification of warehouse management in Logistics

Warehouse management in Logistics is classified according to the specific characteristics of goods. Each type of goods will have different properties, sizes, and designs, so businesses need to have appropriate management methods. Below are 3 popular ways of classifying warehouse management:

• Parts warehouse management: Includes all input materials and semi-finished products of the production stages used to create finished products.
• Product warehouse management: Includes completed products, ready for sale. This is a high-value commodity that needs to be closely managed to avoid damage and loss.
• Warehouse management of pre-packaged materials: Usually includes packaging, straps, cartons, plastic, pallets,... used to contain and package goods.

4. Current standard Logistics warehouse management process

The inventory management process in Logistics includes steps designed to manage and control import and export activities of goods in the warehouse. This process includes the following 5 specific steps:

4.1 Plan for warehousing

Warehouse planning is the first step in the warehouse management process. The warehousing plan needs to ensure the following elements:

• Correct product: Products imported into the warehouse must be of the correct type, design, and quality as required.
• Correct quantity: The quantity of products in stock must be accurate and consistent with the order.
• Right time: Warehouse warehousing time must be consistent with the business's production and business plan.

If you do not properly follow the warehouse planning process, businesses may encounter the following problems:

• Warehoused items that do not meet standards: Products that do not meet standards will take up warehouse space, making the process of arranging and finding products later difficult.
• Incorrect quantity of products: Businesses will have difficulty finding free space to store products or having to change storage plans to match the actual quantity.
• Damaged or lost goods: Goods that are not stored properly will be easily damaged and lost, affecting purchasing costs and goods supply progress.

4.2 Inventory control

The purpose of inventory is to ensure transparency and accuracy throughout the entire management process. This activity needs to be done regularly and regularly, and should not be delayed for too long. If delayed, businesses will waste a lot of time and manpower to find the cause of the difference and may affect the warehouse operation process.

4.3 Handling damaged goods

In the Logistics warehouse management process , goods quality management is an important step to help ensure quality during the transportation and supply process. This activity requires carefulness and meticulousness to ensure that goods are arranged in the most scientific, reasonable and safe manner to avoid damage.

When goods are stacked on top of each other or in disordered order, the business's search and inventory process will be more difficult and time-consuming. In addition, damaged and poor quality goods will also affect the reputation and image of the business. Therefore, properly arranging warehouses will help businesses minimize risks and ensure efficiency in warehouse operations.

When goods are damaged due to storage errors, warehouse management staff need to handle them immediately to avoid affecting the quality and value of the product. Depending on the level of damage, warehouse management personnel will remove, repair or reuse the goods.

4.4 Plan for warehouse release

To plan effective warehouse release, businesses need to take the following steps:

• Packaging products according to standards: Each product line will have separate packaging standards, ensuring convenience for delivery and avoiding unnecessary incidents during transportation.
• Warehouse inventory: Ensure the quantity of goods delivered matches the actual quantity of goods in the warehouse.
• Checking the quality of goods: Ensuring that warehoused goods meet the required quality.
• Balance the quantity of goods to match the time: Adjust the quantity of goods shipped to suit customer needs and production plans.

4.5 Prepare periodic statistical reports

Creating various types of reports appropriate to each task criteria is a necessary step, allowing businesses to effectively manage warehouses in Logistics. Types of periodic statistical reports include:

• Warehouse book: Monitor details of import, export, and inventory of each item in each warehouse.
• Warehouse report for each branch: Summary of import, export, and inventory situation of each branch.
• Report on warehouse import and export fluctuations: Track changes in quantity and value of goods in the warehouse.
• Goods inspection report: Check the actual quantity and quality of goods in the warehouse compared to the quantity and quality according to the books.

However, creating too many reports can lead to difficulty managing and finding information. Therefore, businesses should only choose necessary types of reports, and increase the frequency of reporting to promptly handle fluctuations and ensure data accuracy.

5. Warehouse management methods in Logistics

To effectively manage warehouses in Logistics , businesses need to apply appropriate methods and processes. Below are some warehouse management methods that businesses can refer to:

5.1 Warehouse management according to FIFO, LIFO and FEFO

FIFO (First in - First out) method: Goods that are warehoused first will be given priority to be released first. This solution is often applied to items with a short shelf life such as food, confectionery, consumer goods, technology items, cosmetics,...

LIFO (Last in - First out) method: Goods that are warehoused later will be released first. This solution applies to materials that can be in long-term inventory such as construction materials to ensure price updates as well as appropriate balance of production and sales costs.

FEFO (First Expired First Out) method: This is an inventory management method based on the principle of "first expired first out", meaning products with shorter expiry dates will be prioritized for release first. products with a longer shelf life. The FEFO method is applied to products that have a short shelf life, are perishable, or may become obsolete over time.

5.2 Division of warehouse into each area

With this method, inventory needs to be arranged in clear areas based on the nature of the goods and the frequency of import and export. For example:

• Fixed goods should be placed inside or on a high floor.
• Frequently imported and exported goods should be placed on lower floors, near the entrance.
• Separate types of goods should be placed in separate areas.

5.3 Sort warehouse by SKU

SKU (Stock Keeping Unit) is a unit of goods classification. Sorting by SKU means that based on the storage location of the goods as well as the nature of the goods, the business will name the goods, usually a string of characters (including letters and numbers).

5.4 Use barcodes or labeling

To differentiate stored products, each product needs to be labeled. The sticker can contain the SKU code or incorporate a barcode scanner system. When entering the warehouse, each item will have a barcode scanned to create a receipt. The receipt will contain information related to the product, including barcode, product name, quantity, price, etc. This information will be stored and used throughout the process of importing and exporting goods or managing them. inventory management.

5.5 Build a clear warehouse management process

To ensure effective warehouse operations, businesses need to build a scientific and appropriate management process. The warehouse management process in professional Logistics often includes the following steps:

• Create a warehouse diagram and disseminate it to all employees: Warehouse diagrams help employees easily determine the location of each type of goods, thereby facilitating storage and import and export of goods.
• Controlling import and export goods: Controlling import and export goods helps businesses ensure the accuracy of quantity and quality of goods.
• Periodic inventory checks: Periodic inventory checks help businesses understand the inventory situation, thereby planning appropriate production, business and supply of goods.
• Prepare goods: Is the step of collecting and assembling goods according to customer orders.
• Packaging and labeling: These are activities that help protect goods from damage and facilitate transportation.
• Delivery to the carrier: Is the final step of the warehouse management process.

Building and seriously implementing warehouse management processes will help businesses ensure effective warehouse operations, minimize errors, thereby improving service quality and optimizing costs.

5.6 Check and clean the warehouse

Periodically checking warehouses is an important activity that helps businesses clearly understand the status of goods, thereby making effective business decisions.

The density of the testing cycle depends on the size and characteristics of the business. Normally, businesses should check their warehouses on average about every 3 months or every 6 months. For large warehouses, businesses need to allocate appropriate human resources and time to ensure the inspection process takes place effectively.

The process of periodically checking warehouses needs to be carried out by each area and each group of goods. Some tasks businesses need to perform are as follows:

• Count inventory and compare with relevant books to ensure accurate data.
• Check the quality of goods to detect damaged products, technical errors,...
• Carefully check the expiration date of the goods to have a plan to sell or carry out a timely discount and discharge campaign.
• Check best-selling products to have a plan to replenish goods promptly.
• Check for possible risks in the warehouse (leakage, flooding, rats, termites, fire and explosion risks,...)

Through periodic inspection activities, businesses need to take timely measures to handle and overcome errors. This helps ensure data accuracy, limiting goods loss and business risks.

5.7 Use effective warehouse management software

Excel is an effective warehouse management solution for small warehouses with a small quantity of imported and exported goods. However, especially with large warehouses, large quantities of imported and exported goods, and diverse product codes, using Excel will be difficult and even impossible to manage accurately. Therefore, a more comprehensive solution for businesses is to use warehouse management software that is 100% automated. If a business is looking for automated warehouse management software, 1C:Company Management software is a comprehensive solution that can do it.

6. 1C:Company Management solution supports automatic warehouse management

1C:Company Management software is an open solution with flexible features and can be easily customized to each specific business. Developed on a modern technology platform, this software possesses powerful features to automate business processes in enterprises, helping to improve operational efficiency and sustainable growth.

Solution 1C:Company Management has the ability to connect production - sales - purchasing - finance - human resources/salary - warehouse departments on the same single software system. From there, businesses can easily track, monitor and coordinate tasks between departments smoothly and effectively.

1C:Company Management solution provides all the necessary features for businesses to effectively manage warehouses in Logistics . Specifically, the software can perform the following tasks:

• Calculate the cost of materials: The software automatically calculates the cost of materials based on input information, helping businesses manage budget resources and avoid losses.
• Set inventory limits: Businesses can set maximum and minimum inventory levels of finished products and supplies, helping to ensure product availability and avoid shortages.
• Controlling the transfer of goods: The system regularly monitors the situation of export and import of warehouses, helping to control the quantity and warehouse address of finished products, avoiding surplus or shortage.
• Inventory and material reserve reports: The report fully notes the increase and decrease in the number of finished products, helping businesses conduct periodic inventory counts.
• Management of material information in the warehouse: The software stores all product information and data, supporting the process of exporting, importing or updating inventory.

Above are the processes and methods of warehouse management in Logistics quickly and effectively. In addition, businesses can apply warehouse management software to help improve product quality, minimize loss, save costs and increase competitiveness. For consulting support on automated warehouse management solutions suitable to your business's specific needs, please contact 1C Vietnam immediately!