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Warehousing 101: How to Set Up and Organize Your New Warehouse


Person moving boxes on a palette jack to organize them in a warehouse.

Your business is growing faster than you could have hoped for, but it has left you struggling to manage the increased inventory, equipment, and personnel. You decide to acquire a warehouse to control the growing operation and now you need a way to manage it all. But where do you start? Below are some tips for setting up and operating your warehouse for success.

Organize Your Warehouse

A business needs to access inventory quickly to reduce lead times, increase customer service, and manage stock levels. It may be tempting to move everything into a new space with the intention of organizing it later, but ‘later’ rarely happens. Taking a few basic steps can make inventory management much simpler. The main concept is to receive new inventory, put it away, pull it, pack it, and ship it as quickly and efficiently as possible.


Set your zones

The flow of inventory in your warehouse is an important consideration and is dependent on the industry you are servicing. If your organization caters to walk-in customers, having popular products located close to the reception counter for fast retrieval is recommended. If you are distributing larger, bulky products, make sure that pipe yards, dunnage racks, and forklift lanes are all laid out for ease of access and safety.


Shipping and receiving locations must have enough square footage to handle loading/unloading traffic without causing congestion. Packing should be placed close to shipping and storage to reduce process times. If a company handles Hazardous Materials then special containment measures must be applied and appropriate Safety Data Sheets must be maintained and positioned with the material for safe and easy access.


A place for everything and everything in its place

It does no good to have inventory that you cannot find. Inventory should be stored according to type, such as all pipe flanges in one section and all PPE in another. Products should be placed on shelves or in bins and clearly labeled. Using bar codes or SKUs can increase efficiency and reduce picking errors. Overstock ought to be placed in a consistent location that is easily accessible. Not only will this organization reduce put-away and pick times, but it will make periodic inventory counting easier.

Employee moving boxes with a forklift in a warehouse.

Control Your Warehouse

OK, you’ve organized your warehouse and it is operating smoothly. Now you need to be able to control all that movement. Bills of lading, customer orders, packing slips, packing orders, shipping labels, and inventory counts all must be produced and processed as efficiently as possible. The amount of data flowing through a modern warehouse can be harder to track than the inventory inside the warehouse itself.


Warehouse Management Systems

As your business grows, so too does your software needs for managing it. A small business can get by using just Excel and QuickBooks, but a larger company will find those methods can severely hamper their access to real-time data and system-wide integration.

Warehouse Management Systems are specifically designed to manage the operations aspect of your business. They can integrate Bills of lading, eCommerce, real-time inventory levels and movement, and much more. Many ERP systems offer WMS as an add-on module.


The choice of a WMS depends on many factors, such as price, operating location, platform, and the industry you are in. If you are a small to medium business using Windows computers, you may find a cloud-based WMS ideal. This type of system will give you the functionality you require without the need for a dedicated IT department to host and operate the WMS on-site. For larger companies with more complex operations including conveyor systems, sorting machines, or robots, a dedicated on-site system using Linux may be preferred for speed and integrated control.


There are a lot of factors to consider when it comes to choosing the right software for your company. Not only are current needs important, but future-proofing the software to ensure years of service should be considered. For more information on how to choose the best WMS solution for your organization, check out this helpful step-by-step.


Link your warehouse

As your business continues to grow, you may find that a WMS alone is insufficient for your needs. No matter how much information you process in your warehouse, if that data is not available to the other departments in your organization, you are effectively operating a silo system where each division is autonomous and having difficulty integrating and sharing information. That’s when it’s time to look at an ERP system.


Enterprise Resource Planning

Enterprise Resource Planning is a software suite that manages and integrates the different aspects of a business such as accounting, commerce, supply chain, operations, and more. There are a variety of ERP systems available on the market today, ranging from relatively inexpensive cloud-based systems for small business owners, to full suites ideal for large corporations.

WMS vs ERP

WMS has an advantage over ERP systems in that they are specifically made for warehouse management. While ERP systems can add modules for nearly all aspects of an organization’s business functions, the modules themselves are geared toward working together as an integrated system and do not necessarily offer all of the functions of a dedicated WMS.


ERP systems, however, are optimized to work as a full software suite that can handle all the data a company produces. Maintaining a single software suite across all dimensions of the organization reduces interoperability conflicts such as delays in invoice payments or extended eCommerce delivery times. These system investments usually have a positive ROI as they can reduce the mundane and repetitive task of order fulfillment, invoicing, and inventory reordering. The ability to track orders in real-time leads to accurate inventory counts, fewer picking errors, and increased customer satisfaction.


Whether you choose a WMS or ERP system is dependent on how much integration you require and how much capital you are willing to invest. Each system needs to be customized for your particular operation; and start-up, training, and support fees can be quite significant. The advantage is a software system that optimizes all aspects of your business by tracking and managing the data it generates.

 

ABOUT THE AUTHOR

Jason Kelly is completing an internship with ASCI. He is currently a senior at the University of Alaska Anchorage completing his final semester for a bachelor’s degree in Global Logistics Supply Chain Management with a minor in Computer Information Systems. He is also scheduled to receive an Occupational Endorsement Certificate in Business Analytics. His experience in logistics lies in oilfield supply, inventory consignments, and air cargo shipping.  

Contact us at hello@ascillc.com or (907) 348-1610  if you would like to set up a free consultation appointment to help with your business’ inventory management needs. 

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