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A Comprehensive Guide to Warehousing and Inventory Management

Take a look at any comprehensive business guide, and chances are that it’ll focus almost exclusively on the customer-facing side of your business. While customer relations, selling tactics, and executive decisions are all important when it comes to the overall success or failure of your business, you can’t discount the grunt work: warehousing and inventory management practices.

In fact, how you run your warehouse and how well you manage your inventory can affect the bottom line of your business much more drastically than you might think. Furthermore, good warehousing and inventory management can lead to significant economic gains across the board, along with greater flex ability when you need to shift product, make a big change, or adjust to customer concerns.

With all this in mind, let’s consider the question of warehousing and inventory management more deeply and look at some effective practices you can implement starting today.

What Is Inventory Management?

In a nutshell, inventory management is the art of masterfully controlling both your inflow and outflow of inventory, as well as controlling and maintaining inventory stock at all times. In practical terms, inventory management means:

  • being able to meet orders on time
  • knowing where all inventory pieces are 24/7
  • executing and anticipating necessary purchases and removals of products or material

In many cases, inventory management is intermingled with warehouse management: a subsection of the broader inventory management concept. Warehouse management concerns itself with successfully managing warehouse activities and requirements, usually through leveraging skilled employees or managers alongside certain technology.

Why Is Inventory Management Important?

Inventory management – and the smart, efficient warehousing that comes along with it – is the lifeblood of any business that moves product as part of its cornerstone business offerings.

It’s easy to see why. Businesses need to know where and how they can get their product to supply centers, stores, or customers quickly and efficiently without many (or any) hiccups. Without inventory management technology and leaders on the front lines, business inventory can all too easily become cluttered, disorganized, or even miscounted.

Poor inventory management can lead to:

  • lack of products when you need them most
  • inaccurate counts or product audits
  • slow response to shifting customer needs
  • and more

Suffice it to say that inventory management isn’t a minor concern that successful businesses can safely ignore. 

In fact, businesses that want to maximize their profitability and meet all the expectations of their customers on time will need to make good warehousing and inventory management a chief concern of their operational processes.

Good Warehousing and Inventory Management Practices

While much of successful inventory management is learned through doing, there are good warehousing and inventory counting practices you can apply starting today to bolster your efforts and see immediate results.

Determine a Good Warehouse Layout

First and foremost, understand the physical layout of your warehouses or storehouses for your business. The layout of a warehouse can significantly help or hinder employees much more than you might initially think.

Warehouse layout affects:

  • where products are
  • how quickly employees can get the products
  • how fast shipments are unloaded and loaded
  • and more

With this in mind, it’s often helpful to separate your warehouses into different zones or “lots.” This can help you separate your inventory by type, size, or another attribute and make for faster product retrieval. Smarter organizing of your warehouse layout will help employees navigate their storage facility more accurately and efficiently.

If your warehouse is set up sub-optimally, consider reorganizing your warehouse when possible. It may take some time and a slight bite out of your productivity in the short-term. But it will significantly improve your inventory management in the long-term.

Appoint a Skilled Warehouse Manager

Every team needs a leader, and warehouse employees are no different. You should always appoint a warehouse manager to run your storehouses. Try to look for someone who has plenty of experience operating a warehouse of a similar size or type to your own.

Good warehouse managers can assist by:

  • monitoring workers in the day-to-day operation of your warehouse
  • make sure that all items are cataloged and scanned properly
  • use warehouse inventory management software
  • handle any issues or anomalies
  • respond dynamically to problems identified by your warehouse employees

A good warehouse manager can make or break an otherwise smoothly running facility, so be sure that your operation has at least one overseeing your inventory operations.

Establish a Solid Workflow

Your business’s warehouse workflow should be specific to its exact needs and labor requirements, not a copied/pasted workflow from the customer-facing side of things. Your aforementioned warehouse manager should have some ideas about how to establish a successful workflow for inventory management.

Good warehouse workflows will address important points such as:

  • how inventory is tracked when it comes to the warehouse
  • how and where new inventory is received and marked
  • how inventory is recorded leaving the warehouse
  • and more

Put in simpler terms, a warehouse’s workflow can tell workers exactly where pieces need to go and where products should stay until called. It eliminates uncertainty and prevents time-wasting since workers and managers won’t need to ask tons of questions before each activity.

This is advantageous if you ever need to integrate new promotional or premium products, such as for a marketing campaign or for clients that want custom-designed solutions. A solid workflow can even accommodate evolving needs.

If you have some experience in this arena, consider discussing specific topics with your warehouse manager like:

  • how inventory location will be tracked, such as by serial tracking or lot tracking
  • how regular cycle counts should be performed. Cycle counts can help with loss prevention and control your total inventory amount
  • what accounting methods will be used, such as first in first out (FIFO) or last in first out (LIFO)
  • how auditing data will be reported
Leverage Warehousing/Inventory Management Software

Any successful business should leverage all available tools to their maximum effect. That includes warehouse inventory management software.

This is essential if you want to automate certain rote tasks and cut down on the labor hours required to handle day-to-day busywork. Plus, inventory management software can help to update your records of existing inventory at all times, making loss prevention even better.

Furthermore, warehouse inventory management software can help you plan for the future by providing you with hard data about the units you’ve sold, selling trends, and more. For instance, maybe your brand wants to start a new upcycling campaign to draw in younger customers. You can use software to determine what resources you have and how you can use them.

The best warehouse management software can even automatically reorder certain stock depending on your business and industry.

Automate, Automate, Automate

This is similar to the last tip, but it’s worth repeating by itself: try to automate as much of the inventory management process as possible. While you do need skilled people in key positions, lots of warehousing and inventory work can be automated these days, such as:

  • data collection
  • scanning
  • barcoding
  • picking and packing product
  • inventory tracking
  • shipping

Again, most of these tasks should be at least partially automated thanks to inventory management software. Through automation, you’ll worry less about human error, increase your business’s efficiency across the board, and ultimately save yourself time and money. Savings like this could help your business survive during tough economic times.

Enable Employee Excellence

Lastly, be sure to focus on cultivating employee excellence wherever possible. The easier you make it for your warehouse workers to do their jobs, the better they’ll perform overall and the more efficient they will be.

In many cases, enabling employee excellence is simpler than you might initially consider. For example, setting important safety standards and ensuring that everyone is aware of those standards can protect your employees from harm, minimize employee absences and the likelihood of worker’s compensation affecting your bottom line.

You might also enable employee excellence by adjusting the cleaning schedule in your warehouse so that your janitorial staff isn’t getting in the way of your warehouse workers and vice versa.

Your newly implemented technology can help to bolster employee performance. For example, you could use new technology to regularly train your employees in new practices or tools they might use to accelerate their inventory processes. This is especially helpful when onboarding new employees who may need to become familiarized with your business’s software and systems.

All in all, a warehouse running with confident, capable employees will naturally perform much better than a warehouse running with subpar, poorly-trained employees who are never given a chance to succeed. 


In the end, warehouse and inventory management is a complex topic that requires a lot of forethought and planning to be successful. The more you consider these topics before hiring your warehouse manager and leaping into warehouse renovations, the better prepared you’ll be to tackle issues that inevitably come up and the better decisions you’ll make.

Still, despite the difficulty involved in setting up good practices, inventory management is an important part of your business’s success. Spend the appropriate amount of time on this topic, and you’ll see benefits in no time. 

Contact Harper + Scott today to discuss the evolving needs of your business.