The terms ‘inventory management’ and ‘warehouse management’ are mistakenly used interchangeably since they both deal with products and operations within organizations in the distribution and manufacturing industry. Despite their similarities, many factors differentiate them.
Business owners and warehouse managers should understand the differences between the two terms because the management system utilized to track inventory depends on several factors that can impact your company’s efficiency and profitability. In this article, you will learn the similarities and differences between warehouse and inventory management. This article also compares warehouse and inventory management and explains how they function together.
What is Warehouse Management?
Warehouse management is the process of controlling and maintaining the operations in a warehouse. The process includes receiving the inventory from the seller, moving the goods inside the warehouse, and allocating storage space for the products in the warehouse. It involves all the activities that take place inside a warehouse.
Warehouse management includes the following:
- Managing equipment and inventory effectively
- Educating and training employees at the warehouse
- Demand forecasting
- Scaling warehouse operations from a business growth perspective
- Maintaining relationships with courier companies to deliver items to customers on time
- Obtaining licenses and certifications from concerned authorities
- Keeping track of everyday outbound and inbound shipments and other activities
Businesses opt for a WMS or Warehouse Management System in their warehouse to make their warehouse operations easier. A WMS helps maintain the inventory levels and avoids stock out situations to allow you to get the best ROI (Return on Investment). It also enables you to forecast demand accurately by giving you information on which products are selling the most and which are not moving from the shelves.
What is Inventory Management?
An inventory management system is how a company keeps track of its stocked inventory. It helps channel the inventory accordingly and deliver to the customers without delay. The process also monitors the dimensions, weight, and amounts of the inventory in stock.
Having a good inventory management system helps eCommerce businesses prevent time lags in processing orders to the final delivery, as it will accurately track the goods in the storage. In today’s competitive world, you must always have your inventory levels data on hand because only then will you be able to provide your customers with a spectacular shopping experience. The process effectively performs your business’s inventory checks without losing potential sales.
What Do Warehouse Management and Inventory Management Have in Common?
Inventory management and warehouse management are similar activities, as both aids in moving inventory from the supplier to the consumer efficiently. Each involves shipping, storing, and reordering stock. They have the following features in common:
Offer visibility into all stock for one warehouse or the whole company.
Use barcode tools, software, and radio frequency identification (RFID) to enhance accuracy and efficiency.
IDS is here to assist you in optimizing your supply chain with manufacturing inventory control, productivity and tracking.
Differences between Warehouse Management and Inventory Management
|Inventory Management System||Warehouse Management System|
|Tracks inventory across all locations||Tracks locations and stock movement within a warehouse|
|Focuses on maintaining inventory levels to fulfill orders||Focuses on packing, picking, and shipping stock|
|Provides information about all inventory||Generates reports on the status of stocks|
Inventory Management system is a simpler process than a warehouse management system. Inventory management provides you with a record of the total inventory in a particular storage location. Warehouse management is the process that businesses perform to manage storage systems inside a warehouse. For example, if a warehouse has multiple storage bins for the same product, warehouse management helps you manage your items. In contrast, inventory management can only inform you about how many items you have.
Typically, inventory management is the first activity in a holistic warehouse management strategy. Warehouse management strategy includes several processes, including, but not limited to, order fulfillment, such as sales, distribution, product supply, and so on. In other words, warehouse management is more essential to everyday operations in the order fulfillment process when compared to inventory management.
Inventory management will only provide information about the quantity of a specific item in your stocked goods. Managing that inventory in a warehouse is done with warehouse management, which enables you to dedicate particular locations for the inventory. Warehouse management gives an organization more control over its operations since it gives them more information than inventory management to complete other tasks in the order fulfillment process.
WMS allows businesses to analyze and change storage and inventory when needed, while inventory management does not provide this option. Communication devices used in Warehouse Management make it possible to make these changes and gain a better understanding of the inventory and product locations, which results in a more streamlined and efficient operation.
Now that you have noted the differences between inventory management and warehouse management, take the next step in deciding which process is best for your business. While both methods increase efficiency and reduce manual efforts, they do so in their own unique ways. Let us know your requirements, and we will guide you in making the best choice for your business.