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Warehouse inventory management best practices for goods control.

5 minutes to read

Inventory management in a warehouse is important as it ensures you are prepared for fluctuations in demand. Inventory management also reduces the risk of waste, makes effective use of working capital and ultimately allows you to provide a better service to your customers.

warehouse inventory management best practices


If your warehouse wants to improve its inventory management and reap the benefits, you have come to the right place. This article discusses some of the most effective inventory management techniques to implement, including having a well-organised floor plan and embracing Just in Time.

1. Optimise the layout of your warehouse.

The layout of your warehouse holds great importance when managing inventory. The supply and demand of products usually change seasonally. Therefore, you should review and update your warehouse layout to prepare for these fluctuations. 

Your labour forecasts might predict a busier period is en route. If so, spend time making sure all of your inventory is stored in the correct areas and your paths are clear so materials can flow seamlessly from the point of origin to their final destination.

We have created another insightful article related to warehouse layout optimisation. It is available to read here.



2. Implement warehouse automation.

Managing inventory can be difficult, especially when it is left to your workforce to take on everything themselves. This is where warehouse automation projects can help.

Without the support of technology, human errors are bound to happen. Staff can start to feel the pressure, which ultimately has a knock-on effect on your entire operation.

Several automated solutions can take on much of the heavy lifting for your staff, including dedicated warehouse robotics. These solutions are critical for providing greater visibility and clarity regarding where products and materials are within the pipeline. Additionally, automated solutions will help you meet your sustainability goals as they are powered by batteries as opposed to combustion engines which can be detrimental to the environment.

From here, you can make better decisions when managing inventory and make regular improvements as you go.



3. Label your inventory.

This might seem like a straightforward tip, but labelling your inventory can make a world of difference when it comes to staying organised. Clear rack labels, bin labels and warehouse signage will streamline processes, reduce picking errors and make it easier for your staff to navigate, especially during busier periods. 

Technology can play a crucial role here, too. Be sure to utilise labelling software such as barcodes and scanners. These solutions allow employees to scan freight to locations in real-time and accurately identify the precise location of inventory stock.

Knowing exactly what you have by using labels will help your decision-making when you need to purchase new assets. Having outdated records increases the likelihood of buying items you don't need, ultimately harming your bottom line.



4. Introduce cycle counts.

Cycle counting is when a warehouse counts a small portion of its inventory over time instead of counting it all at once.

This can be beneficial because a warehouse does not have to shut down its operations and perform a full physical inventory count at once. There are three types of cycle counting your warehouse could implement. These include: 

  • Control group cycle counting: This process usually focuses on a small group of items counted many times in a short period, revealing any errors in the count technique and allowing them to be corrected.
  • Random sample cycle counting: Here, you would randomly select a certain number of items to be counted and repeat the process over several days.
  • ABC cycle counting: This method assumes that 20 percent of the parts in a warehouse relate to 80 percent of the sales. The items in the A category are counted most frequently, usually once a month or once a quarter. The items in the C category are counted less frequently, such as once every six months or once a year. Meanwhile, the items in category B are counted less frequently than A parts but more often than C parts.

5. Embrace Just in Time (JIT).

JIT is a lean production method pioneered as part of the Toyota Production System. The method involves manufacturing only what is needed, when it is needed and in the quantity required at a particular time. Its goal is simple — to avoid the build of waste and enhance productivity by streamlining manufacturing and reducing inventory where necessary.

By implementing this process, your warehouse can also respond rapidly to changes in demand, maximise your workflows and keep inventory costs to a minimum. JIT is one of the many lean methods your warehouse could implement to streamline processes and improve your inventory management. 

Some of the others include the 5S methodology, Kaizen and value stream mapping. You can learn about these in more detail here.


This is the beginning of your lean production journey.

We have years of experience helping warehouses embrace the power of Toyota lean manufacturing. That is why we have decided to collate our knowledge into a guide. The guide covers everything lean production. From the most effective strategies and techniques to the role technology has to play.

Ready to get started on your lean production journey? It all starts by downloading your copy of the guide below.

Lean production whitepaper