10 Reasons Why To Build Inventories

1. To cater for demand variations

2. Seasonal variations and fluctuations

3. To prevent out-of-stock and provide better customer services

4. To cater for supply variations

5. Volume discounts/Economic Order Quantity

6. Supply lead time variations

7. Purchase price fluctuations

8. To ensure better and smoothly production operations

9. Plant maintenance

10. Potential operation interruption due to electricity, water, gas supply outage

Warehouse Inventory Control Starts With Proper Layout Planning

A proper layout planning in the warehouse is crucial towards better inventory control and management. Here is a classic example:

Original Layout of the Warehouse:

Here are the summaries:-

  1. Storage capacity: about 1,540 pallets.
  2. Different color zone represent storage of different products (in terms of properties, packaging etc).
  3. Major problems due to poor layout:-
    • Very messy and goods are being stored anywhere with space available.
    • Similar product being stored at different zones due to unbalance of storage space being allocated. Operator has to search multiple areas in order to get the right item.
    • No access at the end of each storage row (Dead-end) — it only allows ONE-way access. Forklift driver unable to cross to next row easily if he couldn’t find the right product within the same row.
    • Picking productivity is poor.
    • Operator always pick the goods near to the office (shorter distance and more turning space).
    • Poor First In First Out (FIFO) practice — causing high over shelf-life problem.
    • No specific area for goods receiving and delivery respectively which resulted in high delivery mistake and poor inventory accuracy etc.

Revised Layout of the Warehouse:

Here are the summaries:-

  1. Storage capacity: about 1,500 pallets.
  2. To clearly segregate the storage zones based on nature of packing/property/size/weight.
  3. Provide access from both sides of the storage racking row.
  4. Forklift driver can drive freely along the racking row to pick the right item.
  5. Higher picking productivity.
  6. Specific area for Receiving and Delivery respectively. No mixed up.
  7. Inventory accuracy improved tremendously etc.


Obviously, a proper planned layout for warehouse is crucial towards better inventory control and management. It improves productivity, accuracy, and more important is, operators work easier.

Please refer to the Inventory Management Software Case Studies page for more examples.

What is Warehouse Management System (WMS)

A Warehouse Management System, or WMS, is a key part of the supply chain and primarily aims to control the movement and storage of materials within a store or a big warehouse and process the associated transactions, including shipping, receiving and picking. The systems also direct and optimize stock put-away based on real-time information about the status of bin utilization.

Warehouse management systems often utilize barcode system to ensure  efficiency in monitor the flow of products. Once the data has been collected, there is either a batch synchronization with, or a real-time wireless transmission to the database. The database can then provide useful reports about the status of goods in the warehouse.

The objective of a warehouse management system is to provide a computerized procedures of handling the receipt of stock and returns into a warehouse facility, model and manage the logical representation of the physical storage facilities (e.g. racking etc.), manage the stock within the facility and enable a seamless link to order processing and logistics management in order to pick, pack and ship product out of the facility.

Warehouse management systems can be stand alone systems or modules of an ERP system or supply chain execution suite. The primary purpose of a WMS is to control the movement and storage of materials within a warehouse – you might even describe it as the legs at the end-of-the line which automates the store, traffic and shipping management.

In its simplest form, the WMS can data track products during the production process and act as an interpreter and message buffer between existing ERP and WMS systems. Warehouse Management is not just managing within the boundaries of a warehouse today, it is much wider and goes beyond the physical boundaries. Inventory management, inventory planning, cost management, IT applications & communication technology to be used are all related to warehouse management. The container storage, loading and unloading are also covered by warehouse management today. Warehouse management today is part of SCM and demand management. Even production management is to a great extent dependent on warehouse management. Efficient warehouse management gives a cutting edge to a retail chain distribution company. Warehouse management does not just start with receipt of material but it actually starts with actual initial planning when container design is made for a product. Warehouse design and process design within the warehouse.

Warehouse management monitors the progress of products through the warehouse. It involves the physical warehouse infrastructure, tracking systems, and communication between product stations. Warehouse management deals with receipt, storage and movement of goods, normally finished goods, to intermediate storage locations or to final customer. In the multi-echelon model for distribution, there are levels of warehouses, starting with the Central Warehouse(s), regional warehouses serviced by the central warehouses and retail warehouses serviced by the regional warehouses and so on. The objective of warehouse management is to help in optimal cost of timely order fulfillment by managing the resources economically. Warehouse management = “Management of storage of products and services rendered on the products within the four walls of a warehouse”.

The eStockCard Inventory software has been designed to meet most of the function in a WMS System. Download the Free Inventory Software today!

Benefits of Warehouse Management System (WMS)

Warehouse management systems (WMS) are best described as the advanced technology and operating processes that optimize all warehousing functions. These functions typically begin with receipts from suppliers and end with shipments to customers, and include all inventory movements and information flows in between. Warehouse management systems have typically been associated with larger, more complex distribution operations. Small, non-complex distribution facilities have historically not been viewed as candidates to significantly streamline operations and reduce costs. However, even smaller and midsize companies are increasingly recognizing the significance of warehouse management systems in today’s environment of integrated logistics, just-in-time delivery, and e-commerce fulfillment.

In practice, successful WMS solutions are generally designed to merge computer hardware, software, and peripheral equipment with improved operating practices for managing inventory, space, labor, and capital equipment in warehouses and distribution centers. Implementation of a WMS allows a company to increase its competitive advantage by reducing labor costs, improving customer service, increasing inventory accuracy, and improving flexibility and responsiveness. A WMS enables a company to manage inventory in real time, with information as current as the most recent order, shipment, or receipt and any movement in between.

WMS Benefits

* Faster inventory turns. A WMS can reduce lead times by limiting inventory movement and improving the accuracy of inventory records, thereby supporting a JIT environment. As a result, the need for safety stock is reduced, which increases inventory turnover and working capital utilization.

* More efficient use of available warehouse space. In addition to reducing safety-stock requirements, a WMS can often increase available warehouse space by more efficiently locating items in relation to receiving, assembly, packing, and shipping points. This increased efficiency can both improve productivity and lower inventory holding costs significantly.

* Reduction in inventory paperwork. Implementation of a real time WMS can significantly reduce the paperwork traditionally associated with warehouse operations, as well as ensure timely and accurate flow of inventory and information. Receiving reports, pick tickets, move tickets, packing lists, etc., which are typically maintained as hard copies, can all be maintained electronically.

* Improved cycle counting. Companies can use WMS to capture relevant data (e.g., frequency of movement, specific locations, etc.) to systematically schedule personnel for cycle counts. Such cycle counts not only can improve the accuracy of inventory records for planning purposes, but also can eliminate or reduce the need for complete, costly physical inventories.

* Reduced dependency on warehouse personnel. Implementing a comprehensive WMS facilitates standardization of inventory movements, picking methods, and inventory locations. This standardization helps to minimize reliance on informal practices, resulting in reduced training costs and lower error rates.

* Enhanced customer service. By streamlining processes from order to delivery, companies can more accurately determine product availability and realistic delivery dates. A WMS can automatically identify and release back-ordered inventory and also can reduce returns as a result of increased shipment accuracy.

* Improved labor productivity. A WMS helps optimize material flow, typically by incorporating several inventory picks into one or by “cross docking”. Cross docking is a process that routes incoming shipments to the location closest to the outbound shipping dock, thereby reducing warehouse handling.

Advantages for WMS Users

For Management: WMS can help management to access an instant picture of

* How much inventory exists in the warehouse

* How many orders are currently being shipped

* What are the stages of processing of pending orders

* Staff productivity details

* Goods shipped by the warehouse over any given period of time.

The warehouse management can determine how much inventory exists in the various stages of processing unlike in non-automated warehouse management.

Sales people can determine how much inventory is available and can relate better to the warehouse staff thus bettering their Customer Relationship levels. Customer Managers can reserve inventory for a customer thereby ensuring that it will not be shipped to anyone else. Inventory Managers can track transactions at a very fine detail to diagnose unexpected sudden changes in inventory. For example, if we had thousands of pieces of some SKU yesterday and today we don’t have any, then where did they go? Were they shipped to some other customer? Were they sent to some other warehouse of the company to be shipped from there? Or did they get lost or were picked away? WMS helps answering such problems. The reports generated during checking processes enable policy decision to be taken about the reliability of the suppliers. WMS is designed to be flexible i.e., the process flow of the DC/Warehouse can now be modified easily as business needs change.

For Warehouse Supervisors: Productivity reports for each operator can now be generated and used to implement productivity based remuneration schemes or to fire unproductive employees. For those warehouses that have to cope up with Union problems these reports can help the company tremendously. Efficient tracking of warehouses activities are possible with WMS as it provides a comprehensive set of web-enabled reports detailing all the activities happening in the warehouse and their effect on the inventory management. WMS also helps to detect bottlenecks in operations, which can increase the overall throughput of the warehouse.

For Warehouse Operators: WMS provides graphical user interfaces (GUIs) wherein most of the time the operator has to just scans the barcodes. Default navigation of cursor on the screen mimics the standard business rule. Thus WMS eases the operator’s task and makes the data input process fast, increasing the overall efficiency of the operator. Some programs like Locating and Pulling are especially designed to run on hand-held radio frequency terminals. These terminals make the task of pickers and locators easy, as these are easy to carry. Modern WMS programs have been coded with extra emphasis on scanner based data input to minimize the need for keyboard or mouse input.

Checklists For Good Warehousing Practices

In every organization, a warehouse is an important asset for the stock inventory storing. Therefore a good warehouse practices is necessary and important to be followed everyday in the daily operation.

The best practices to maintain a good warehouse would be as follow:-

  • Pick up wrap, boards, paper, and debris. “Clean as you go.”
  • Keep dock doors closed and latched when not in use.
  • Keep off perimeter, including trashcans.
  • Never set food cases on the floor.
  • Record inbound product temperatures and reefer setting.
  • Remember the “Danger Zone” for “high-risk” foods.
  • No food, drink, gum, or tobacco products in the Warehouse.
  • Report all spills or damaged traps or cases immediately.
  • No personal food in our coolers/freezer.
  • No food in trash cans. Debris only.
  • Inspect empty pallets for rodent or insect activity or odors.
  • Sweep out and inspect trailers before loading. Fill out “Trailer Inspection Program” form completely.
  • Segregate foods from non-foods.
  • Take meals in break room, lunchroom, or outside the building.
  • Never sit or walk on freight.
  • Keep dumpster lids closed when not loading.
  • No food or drink in lockers.
  • Use a Slip Sheet on damages and returns. Fill out “Incoming damages and Overages” report.
  • Keep cooler/freezer doors closed at all times.
  • Traps should be flush against the wall.
  • Report any rodent, bird, or insect activity to a Supervisor or member of the Food Safety Team.
  • Fill out Trailer Inspection Sheet on Outgoing Loads.
  • Keep 14” between every two rows for inspection and cleaning.
  • Report damaged racks, guardrails, and cooler doors.
  • Adequate free air circulation all around the load is essential during refrigerated/frozen transportation.
  • Personal items and effects are to be kept in designated areas.
  • Inspect all incoming freight for spillage, especially bagged product.
  • Where seals are present on incoming loads, the seal number should be checked against the seal number on the bill of lading to ensure that the two match.
  • No glass containers inside the warehouse.


Implement Cycle Counting

Most of us know what it is. Some of us recognize the benefits of it. Few of us have made it be part of standard operating procedures in their organization. Cycle counting will increase the accuracy of inventory data in your systems.

By examining inventory daily, you’ll find those mystery items that have found their way to the shelves. You can correct items that have been put in the wrong place. You can rotate stock according to their expiry date. The list can go on indefinitely.

Cycle counting is penicillin for many organization ranging from manufacturer to distributors because it attacks so many little problems and solves them on a timely basis.

Ideas To Improve Warehouse Operation

The warehouse operations for the stock inventory need to be monitored from time to time to find out whether the organization is wasting money in storing products and materials.

Cubic Feet of Storage

Evaluate how well you are using the storage space you have. Inefficient storage can cause you to add warehouse space you don’t need and to limit orders that you think you can’t store. You may have enough space; you just may not be using it well. Decide if ideas like racking, mezzanines and conveyor belt systems can help you use space better.

Look at Critical Inventory Levels

Make sure you have established critical inventory levels for each product. This is the level below which you may not be able to meet demand. Set an acceptable inventory level by averaging how much of the product you carry per month and adding a percentage for safety stock. One of your strategies for assessing warehouse operations should be to evaluate how inventory levels are maintained.

Evaluate Pick Locations

As much as 70 percent of a stock picker’s time is spent walking through the warehouse. Evaluate whether you need to locate important inventory (fast-moving stock) near the stock pickers so they can easily get to it. Assess your operation by how much time is spent looking for stock or walking to it.

Assess Your Need for Bar Code Technology

If you do not have bar code technology, evaluate how it can help you track items in the warehouse. If you do have bar code technology, look at how well your employees are using it. Bar codes can help you track products, speed up the retrieval process and eliminate paperwork.

Examine Your Ability to Expand Storage Space

Based on sales forecasts, look at how much additional product you could store if you had to. Evaluate the warehouse operation in terms of its ability to be flexible, and provide space for new products or new product sizes.

Analyze Product Locations

If you have one product stored in several locations, assess whether that is the most efficient way to store it. Also, evaluate whether employees know where to find multiple locations for a product. You may want to consolidate locations so that products are not too spread out, causing unnecessary reordering and delays in filling orders.

Evaluate Vendor Packaging

The way vendor package products can affect your warehouse operational costs. If you want ship alones — items reshipped to customers in original packaging — and your vendor has repacked these items in non original packages, you will incur a great expense in preparing them for shipment. Also, if your storage procedures require pallets with specific heights, make sure your vendors are in compliance. You may be spending money correcting vendor errors and inconsistencies.

30-day Satisfaction Guarantee!

The eStockCard Team is glad to announce that we will be giving 30-day Satisfaction Guarantee to the new customers who purchased Chronos eStockCard Inventory Software from 30th August 2012 onwards. For any reason you are not satisfied with our software, please email and tell us your concern, we will try our best to solve it within 10 days. If after this period of time we still unable to give you a solution, we will honor the 30 days money back to you.

Here are the terms and conditions for this “30-day Satisfaction Guarantee”:-

  1. Offer a 30 days money back guarantee from the purchase dated.
  2. Any administration charges being charged upon by the credit card company, payment gateway or banks would be deducted from the refund amount.
  3. Under no circumstances, will the refund being entertained after the 30 days from the purchased date.
  4. To submit the refund request by login into the Client Center from www.estockcard.com within 30 days from the purchase date.
  5. To have, at least allow us to address your concern due to the dissatisfaction first within the next 10 days. However if we are still unable to address your concern, we will honor the 30 days money back to you.
  6. To send back the deactivation code to us within 24 hours once refund decision is confirmed by both parties.
  7. The refund amount would be reversed to the credit card used to purchase the eStockCard (via Paypal) or bank account (via Wire Transfer). Please allow one or two billing cycle for the credit to appear.
  8. All the software customization works are NOT BE VALID under the 30 days money back guarantee.
  9. Please refer to the latest Term and Conditions from our website.

If you have any question on this, please feel free to contact us. Thank you.

Spare Part Inventory Management

Spare parts inventory management plays an important role in maintaining the stock inventory at an optimum cost.

Presently, the industries are going for capital intensive, mass production oriented and sophisticated technology. The downtime for such plant and machinery is thus extensively expensive.

It has been observed in many industries that the non-availability of spare parts contributes to as much as 50% of the total down time. Further to that, the cost of spare parts is usually about  50% of the total maintenance cost for the factory. Thus, it is a paradox to note that the maintenance department is complaining of the non-availability of the spare parts for their usage and finance department is facing the problem of increasing locked up capital in spare parts inventory.

This amply signifies the importance of spare parts management in any organisation.The unique problems faced by the organisation in controlling/managing the spare parts are as follows:-

1) There is an element of uncertainty as to when a part is required and also the quantity of its requirement. This is due to the fact that the failure of a component, can not be estimated correctly.

2) Spare parts are not that easily available in the market as they are not fast moving items. Only the  original manufacturer has the supply of spares. Ususally new models are introduced to incorporate the design improvements and old models are phased out thus the spares for old models are not readily available.

3) the number and variety of spare parts are too large making the close control more and more tedious. For instance, the number of items of spares in a medium scale engineering industry may be around 30,000 and that in a large scale chemical industry may be around 150,000.

4) There is a tendency from the stage of purchase of the equipment to the stage of the use of the spare parts, to requisition spare parts more number than that are actually required and accumulation of spares takes place.

5) The rate of consumption of spare parts for some are very high and for some are very low.

Improve Productivity in Manual Picking (Part 2)

Continue  from previous . ..


A picking list has an effect on the time needed to pick up the inventory. It should have a location, an item code ,description and quantity to be picked.. In some instances a batch number or lot number is required.  Item size also has an impact on
picking. It generally takes less time to pick small items than to pick large items that are bulky or hard to handle. Using the correct equipment helps to improve this situation.



Proper marking or labeling makes a difference in the picking time. If an item is not  marked or  poorly marked, it takes time to determine if it is the right item. If there are several markings or labels on the item, confusion occurs and time is wasted determining the correct inventory.



Equipment has an important impact on picking. For example, pushing a cart is not as quick as using an electric pallet jack. Equipment attachments also have an important effect on picking.


• Can the worker read well and understand simple instructions?

• Is the worker capable of doing what he or she is supposed to do, and is the worker properly motivated to do an effective job?



Warehouse layout has an effect on picking. If the aisles are not properly laid out, considerable walking may be required to go from one item to the next. There are substantial differences in the time needed to pick from shelving, the floor, flow racks,
pallet racks or drive-in racks.



Proper equipment maintenance has a tremendous bearing on picking, as breakdowns must be avoided. The impact of a conveyor which stops with 20 or 30 people working it, can be disastrous.


Load integrity has an impact on picking. Moving a pallet load of full cartons or bags of chemicals that are unstable or slide off can be disconcerting and time consuming.



Poor housekeeping waste pickers time in locating and pick up the required inventory.

•How fast can you move when there is merchandise or trash on the floor or in the aisles which slow down a picker
from moving?

Just trying to move a pallet jack over small pieces of debris in the aisle can slow up an operation.


• What effect does training have on picking?

• Do pickers know the location system?

• Do they know how to use their equipment?

• Do they know, or are they trained to put items into containers with the markings up so that the checkers don’t have to re-handle them?

• Do pickers know how to check and sign their picking lists?



• How about a system of measurement?

• Are there predetermined standards which tell you what you are measuring?

• Should you be measuring weight, lines, orders, pieces or dollars per hour?

• If you have a measurement, is it analyzed to determine productivity for the total operation and for each picker?

• Does this analysis tell you where to look for ways to improve picking?



Supervision is probably the most important element in a picking operation.

• Is the warehouse laid out s that the supervisor can see the pickers?

• Are there standards which can be used to measure the pickers?

• Does the supervisor watch to see what they are doing and if they are doing it correctly?

We can concluded that  many factors influence the picking function, which is itself only one of many elements to be considered in productive warehouse management