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Multi Warehouse Inventory Management for Small to Medium Businesses

Posted: September 06, 2019 by Ly Phan

Multi Warehouse Inventory Management for Small to Medium Businesses

New businesses often start with just one warehouse, which means physical counting and tracking products is a relatively straightforward process. However, as companies grow, it often comes with a need to scale up operations and add more locations to provide the capacity to support demand. As a result, multi warehouse inventory management becomes a key priority. While running businesses across multiple locations brings its own complexities, it’s essential to understand the advantages of doing so.

Benefits of Multi-Location Business

In today’s hyper-connected world, global trade is commonplace even for small to medium businesses. The internet is a primary driver behind this trend, with the eCommerce boom delivering a $5bn boost to the warehouse industry by 2025. Yet, the need for physical warehouses and distribution centers remains.

Logistics

There is a considerable amount of pressure on eCommerce businesses to offer affordable and quick shipping as part of their customer service. Online retail giant, Amazon, began to offer  “same-day” shipping in 2014 to its Prime members. The success of this service has led thousands of other smaller businesses to follow suit to remain competitive.

Therefore, eCommerce businesses have either built their own distribution centers or joined forces with 3PL companies to fulfill customer demand for faster deliveries. Whether you are a 3PL, order fulfillment, or eCommerce business, it’s essential to have warehouses in prime locations.

Investing in multiple warehouses pays off in the long-run in terms of reducing transport costs, add flexibility, and ensure local areas has the required level of stock. For order fulfillment centers, the final point is an important one. If a company based in New York sells 80% of a particular product to California, then it would make sense to stock the majority in a warehouse near Los Angeles.

Reach

As a business looking to scale, it’s important to continually reach out to new markets - both demographically and geographically. Utilizing multiple locations can enable companies to access new audiences and provide a robust platform for growth. 

As pointed out earlier, the eCommerce sector is under pressure to ship products quickly and cheaply to its customers, which leads to multiple distribution centers. However, such a need for more than one location is not limited to retail businesses. For instance, the 3PL sector relies on strong transportation links and being near as many customers as possible

The principle remains the same. Growing businesses need to maximize flexibility and access to markets and talent. 

 

Challenges of Multi-Warehouse Management

Though having warehouses in multiple locations present a range of opportunities for businesses, it does come with its challenges. Retaining control over costs, inventory, and logistics is critical to a company’s success - and that task only grows with additional warehouses.

Inventory

Tracking inventory through the supply chain and across multiple locations can prove to be a tricky challenge. Without oversight and real-time visibility, stock levels at different warehouses can easily fall short, leading to problems across the supply chain.

In a single warehouse, you may be able to get away with simple physical counts, but when operating multiple warehouses, there’s a need to sync and corroborate the data. Failing to do so increases the risk of stockouts, errors, and lost inventory. In turn, this can potentially lead to increased costs and unhappy customers. 

Communication

One area which sees a significant impact from moving from a single warehouse to a multi-location operation is communication. As with any business, clear lines of communication are essential - whether it’s between workers or systems.

From the perspective of systems, it can prove a challenge to ensure the warehouses are “talking” to each other efficiently. This involves sharing the data in real-time and taking measures to fulfill the needs of each individual location. In terms of workers, the task is to utilize clear communication channels between the different teams, whether it’s through inventory management systems or other platforms.

The challenge is to avoid mixed or conflicting messages, which can lead to confusion among both people and systems.

Organization

Managing multiple warehouses is effectively an organization challenge. Alongside communication and inventory, other factors need to be considered, including:

  1. Costs
  2. Human Resources
  3. Logistics
  4. Shipping
  5. Warehouse Layout

Such a challenge requires a holistic and proactive approach, with inventory management at the forefront of any solution. The purpose of warehouses is to ensure a smooth flow of goods throughout the supply chain, and as ever, technology can provide an answer.

 

Multi-Warehouse Inventory Management System

Multi warehouse inventory management system is important for any business

As a business, it’s vital to find a solution that is flexible, robust, and secure. SmartTurn provides a cloud-based inventory management system that can work with both singular and multi-warehouse businesses. It gives small to medium companies the opportunity to automate processes, sync data across multiple locations, and facilitate smooth communication between teams.

The cloud-based software enables data to be updated in real-time, from wherever you are in the world. For instance, if products are being shipped from a warehouse in Texas, the entire system will be updated so that teams across the US and beyond can be informed instantly.

This feature is essential when it comes to multi-warehouse operations, for several reasons:

  1. Limits stockouts: Certain products may be more popular in some areas than others, so if there’s a risk of a stockout, the system will alert the business to reorder or move inventory to rectify the problem. 
  2. Improves accuracy: SmartTurn’s software supports barcoding systems, which can lead to greater inventory accuracy. As a result, a business can reduce the time it takes to find products and ensure the right shipments are made to customers.
  3. Greater efficiency: The cloud-based software can be accessed through a range of devices, including tablets, enabling warehouse operators to do their work on the move. Moreover, it reduces paperwork and increases productivity.

 

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