What Is Warehouse Management and How To Do It Right
by Jaidyn Farar
Businesses that operate logistics centers face significant challenges: high labor and warehousing costs, skills shortages, environmental concerns, and more. As they work to overcome these challenges, warehouse managers remain focused on the big picture—their top priority in 2024 is improving customer satisfaction levels.
With good warehouse management, you can speed up complex fulfillment processes, create a work environment that attracts and retains employees, and ensure fast, accurate deliveries that meet your customers’ expectations.
What is warehouse management?
Warehouse management involves overseeing and coordinating all the processes that take place in a business’s warehouse. This includes tasks such as optimizing the facility’s layout, scheduling labor, implementing safety protocols, ordering and receiving inventory, fulfilling orders, and shipping.
Warehouses are full of moving parts—people, equipment, software, and products. The goal of warehouse management is to integrate every part and process so orders can be fulfilled as quickly and cost-effectively as possible.
What does a warehouse manager do? A warehouse manager oversees the day-to-day operations of a warehouse, making sure inventory is stored efficiently and orders are fulfilled accurately and on time.
What is the most important thing in warehouse management? The most important results of warehouse management include maximizing productivity, minimizing costs, and creating a safe work environment for employees.
Inventory management vs. warehouse management
Inventory management refers to a specific set of activities: forecasting demand, monitoring stock levels, receiving goods, and fulfilling orders. Warehouse management is a broader term encompassing every aspect of warehouse operations, including things like warehouse layout design and productivity monitoring.
Benefits of warehouse management
Great warehouse management allows you to quickly and accurately fulfill orders. This leads to high customer satisfaction, which in turn results in positive online reviews and word-of-mouth marketing. A well-managed warehouse is key to building a strong reputation and increasing your revenue.
Warehouse management can also lead to better relationships with suppliers and carriers, as streamlined processes and clear communication make it easier to coordinate deliveries and manage expectations.
The warehouse management process
Managing your warehouse involves overseeing each of these key processes.
- Receiving. Receiving includes accepting and verifying incoming goods and inspecting for any damage or discrepancies before they’re entered into inventory.
- Put-away and storage. This stage involves moving received goods to their designated locations within the warehouse and organizing them systematically for easy access. With proper storage practices, you’ll keep the warehouse organized and prevent goods from getting damaged.
- Picking. Picking is the process of retrieving items from their storage locations to fulfill customer orders. This is often accomplished using digital systems that show pickers where to find each item.
- Packing. After items are picked, they are prepared for shipping. Packers place them in appropriate packaging materials, add a shipping label, and include necessary documentation. Proper packing ensures the goods are protected during transit.
- Shipping. Finally, packed orders are shipped to customers. The shipping process includes selecting shipping methods, purchasing shipping labels, and coordinating with carriers.
- Slotting. Slotting is the process of organizing inventory within a warehouse to optimize picking efficiency and reduce travel time for pickers. It involves analyzing product demand and movement patterns, then storing items in the most effective locations.
- Reporting. Reporting involves generating and analyzing warehouse data on various warehouse operations, such as inventory levels, order fulfillment rates, and efficiency metrics. Accurate reporting helps you make better decisions and identify areas for improvement.
With effective warehouse management, each of these processes will flow as smoothly as possible. You’ll maximize space, speed up picking and packing with the right tools and techniques, and coordinate shipping details so you can get packages out on time.
Key components of great warehouse management
What can you do to improve your warehouse management? Following the principles below will put you on the right track for an efficient warehouse, one where all the moving parts work together in harmony.
It all starts with understanding your objectives.
Knowing your objectives
Your business has unique needs and goals, and your warehouse management strategy should reflect that. Understanding your objectives is the first step toward using space, labor, and equipment optimally.
Determine what your warehouse needs to accomplish. Does your inventory require specialized storage conditions to prevent damage or spoilage? Do you need to meet strict delivery speed requirements? Are you interested in going green to attract eco-friendly customers?
Whatever your specific goals, keep the customer in mind! Although they won’t see the behind-the-scenes warehouse activities, they’ll see the results. If a package gets lost due to an address typo, damaged by mishandling, or delayed by fulfillment center bottlenecks, the recipient won’t be satisfied with their delivery experience.
Controlling and coordinating complex processes
Warehouse processes are complex, each involving the precise coordination of people, equipment, software, and inventory. To achieve a high level of control, managers need to have visibility into everything. This is best accomplished with a warehouse management system (WMS) that provides real-time insights into inventory levels, order statuses, and labor productivity. Regular quality control measures, such as inspections and audits, also help maintain high standards.
Automating key processes
Many warehouse activities can be time-consuming, strenuous, or even dangerous for staff members. Manual processes are also error-prone, potentially costing your company both time and money. To solve these issues, look for opportunities to automate your warehouse. Warehouse automation streamlines repetitive tasks, freeing up human labor for more complex activities and improving overall productivity.
Using data insights to drive improvement
You can’t always see opportunities for improvement just by observing the day-to-day activities in a warehouse. Often, your most valuable insights will come from the data collected by your WMS and other systems. Measure key performance indicators such as picking accuracy, order lead time, order fill rate, product return rates, and inventory turnover. Regularly review this data to identify patterns and trends that can inform strategic decisions.
Ensuring worker safety
Worker safety is essential in maintaining an efficient and productive warehouse environment. Start by establishing detailed safety protocols that cover all aspects of warehouse operations, from equipment handling to emergency procedures. But don’t stop there! Conduct regular training sessions to keep safety guidelines top of mind for all employees.
What is a warehouse management system (WMS)?
A warehouse management system (WMS) is software that facilitates efficient warehouse management by providing greater visibility into inventory levels and location, employee productivity, and order fulfillment processes. While a WMS can be a module of an enterprise resource planning (ERP) system, it can also be a standalone cloud-based or on-premise platform.
Main purposes of a WMS
A WMS automates manual warehouse processes to save time and reduce errors. It makes it easier to understand what’s happening in your warehouse, identify inefficiencies, and improve your supply chain strategies. In addition to these strategic benefits, a WMS also helps with daily tasks like picking and packing.
The main purposes of a WMS include:
- Forecasting demand
- Eliminating operational errors and redundancies
- Providing real-time insight into inventory levels and location
- Sharing data with other supply chain software
- Monitoring productivity
- Optimizing the use of warehouse space
- Creating instructions for picking, packing, and receiving
- Managing staffing needs and employee schedules
- Reducing waste
How to choose the best WMS
The right WMS for your business will align with your goals, have the capabilities you need, and come with top-notch support so you can continue operating at full capacity even when challenges arise.
When choosing a WMS, consider the following factors:
- Warehouse operations and needs. Evaluate whether the WMS can meet your specific requirements. Can it keep up with your order volume, especially during peak season? Will it work with your automation technology, including picking and conveyor systems? Does it have multi-site capabilities?
- Flexibility, scalability, and configurability. Choose a WMS that can be configured to adapt to your processes and workflows, allowing for customization as your needs evolve. Your chosen solution should be able to scale with your business, accommodating growth in product range, order volumes, and geographic locations.
- Integration capabilities. Can the WMS integrate with other technologies and systems used in your warehouse? This may include ERP systems, order management systems (OMS), shipping software, and your ecommerce platform.
- User interface. Prioritize a user-friendly interface that is intuitive and easy for warehouse staff to navigate. This will reduce training time and potential errors.
- Vendor reputation. Choose a reputable WMS vendor with a track record of delivering reliable solutions.
- Implementation process. Assess the experience and expertise of the vendor’s implementation team, and consider the implementation timeline, milestones, and key performance indicators (KPIs).
Simplify warehouse management with EasyPost
For modern warehouse management, you need an array of tools. And when it comes to the shipping side of ecommerce warehouse management, you need a solution that lets you effortlessly connect with your preferred carriers, generate compliant shipping labels, and automate key shipping processes.
The EasyPost suite of Shipping APIs provides these capabilities and more, helping businesses of all sizes optimize their warehouse management. With EasyPost, you’ll not only speed up shipping and increase warehouse efficiency, but you’ll also be able to access rate discounts for carriers like USPS, UPS, FedEx, and more.