Best Practices for Efficient Inventory Management in High SKU Warehouses

Every warehouse has the things they need to store and organise, but some warehouses have more to store than others do.

A great number of warehouses are beginning to experience an increase in the total number of SKUs that they are required to monitor and manage. A good starting point is to invest in quality inventory shelving systems and custom fitting solutions. But is it enough? Your warehouse may be looking at a higher number of SKUs in your inventory than it ever has before as a result of factors such as the growth of e-commerce, the expansion of retail outlets into new areas of sales, and the increased demand for product storage and distribution.

Which is something to look forward to, right? Even if it does tend to lead to bottlenecks in productivity, it is preferable to the alternative, which is running out of inventory, which can lead to you running out of business. If your warehouse has begun to deal with a larger selection of SKU counts, here are some suggestions for keeping everything organised and ensuring that everything can move freely:

Beginning with regular maintenance:

When you first got started, your warehouse may have been well-organized and productive, but even the best-laid processes have a tendency to fall apart when inventory levels start increasing. This may have been the case in your warehouse. Take a look at certain key performance indicators (KPIs), such as the average product handling time, which SKUs tend to move more quickly than others, and which daily tasks may have begun to be neglected as a result of the increase in products, and start making a "to-do" list of what to begin looking into based on your findings. If the metrics tell you that you need better inventory shelving systems and custom fitting solutions, do it!

Examine the products that have sold the most:

Having knowledge of which SKUs sell the most will have a significant impact on nearly every other facet of your inventory management strategies moving forward. Look at the numbers of sales for the products that move the most quickly through your store to get an idea of what you should put first and how to do it. Obviously, simply being aware of the sales figures is not going to be sufficient...

...and assign a priority to them:

The proper organisation of a large number of stock-keeping units (SKUs) is one of the simplest ways to bring that number under control. Once you've identified your top five to ten best-selling products, you should investigate where they are stored and how they are currently being managed, and then make adjustments as necessary. Is it situated in such a way that it can be accessed in a manner that is both easy and safe, or do you need to rearrange the shelving in your warehouse so that it can better accommodate these SKUs? Are they being stored properly, or would a different kind of shelving, such as pallet racks, be necessary to support their weight and make it possible to access them in a manner that is less hazardous? Examine your inventory shelving systems and custom fitting solutions and make certain that the products that are most in demand can be managed in the appropriate manner.

Examine the procedures you use to count:

Your methods for tracking your inventory might require some assistance as it continues to grow in size. You should think about switching to cycle counts so that you can perform more frequent updates on inventory, particularly with products that sell out more quickly. Additionally, you should make sure that everything is checked as frequently as possible and with as few errors as your current system can manage in order to prevent additional discrepancies in the future.

Clear the way for the arrival of:

Even outside of the general storage area, a significant number of mistakes in inventory counting take place during the receiving stage of the shipping and tracking process. Do not simply assign your receiving area a minuscule office on the incorrect side of the building; instead, designate a receiving area right next to the shipping area and provide them with an ample amount of wire shelving and work surface. This will ensure that all incoming inventory is processed and tracked as accurately and correctly as is possible.

Make time in your schedule for housekeeping:

If you have a warehouse that deals in a large number of SKUs, it's a good idea to give your employees some time at the end of each shift to clean up and put everything back where it belongs. This is a good strategy for any warehouse. Stop processing orders and taking in new inventory thirty minutes before the end of each shift, and instead use that time to tend to housekeeping responsibilities that have come up during the shift. Clean up, put everything back where it belongs, and perform some last-minute counts of items that might have been moved around quite a bit during the previous shift in order to prevent further errors down the road.

These are just a few ideas to get you started; however, remember that staying proactive is important no matter what you end up doing, so keep these in mind. When it comes to large inventories, having a solid defence is much more important than having a strong offence.

I'm Preben Paulsen and working with Planova and they are leading manufacturer and supplier of Shelving solutions, shop fitting, retail store displays and best space planners in Europe.