How a Warehouse Management System and Enhanced Processes Help Improve Your Service Level While Minimizing Your Warehouse Footprint

Making your operation more efficient is one way to increase your service level while reducing your need for service stock.

Key Takeaways:

• The right tools can help you carry no more safety stock than you need to respond to disruptions.

• Warehouse Management Systems provide data that allows you to forecast demand and respond to issues. 

• Inventory, vendor, and supplier strategies can help reduce the need to hold safety stock. 

For many warehouses, safety stock is an important part of ensuring you’re equipped to meet fluctuations in product demand and when you have variability in your lead time.

During COVID, there has been increased difficulty keeping products in stock, which creates variation in lead time. At the same time, there have also been fluctuations in demand. Either of these can result in a stock-out situation.

Safety stock was designed for exactly this situation. But the downside is that safety stock involves more storage space.

This brings up another current issue: In many markets, the demand for warehouse space is heating up. As one source notes, “a year-plus of social distancing and widespread store closures has accelerated an already growing demand for online goods, leaving many businesses in search of one thing: warehouse space.”

It may seem like a dilemma: Is it better to take on more safety stock, even though this might require more warehouse space, or is it ideal to maintain a smaller footprint and risk disappointing customers with slower delivery times?

Fortunately, the right steps can help you get the best of both worlds.

While safety stock should never be at zero, an operation that isn’t run effectively may often end up carrying more safety stock than is necessary.

The right processes and tools can help minimize the amount required by:

• automatically monitoring your inventory levels
• ensuring customers know whether or not a product is in stock when you buy it
• fostering connections between you, vendors, and suppliers, to achieve the best efficiency

Remove Barriers To Success With a Warehouse
Management System

An inventory management system (sometimes called a warehouse management system) can help reduce the inefficiencies preventing you from achieving a higher service level.

Inventory management tools, when used correctly, give you accurate insights into your stock with minimal effort compared to traditional methods. Warehouse management systems track every item that’s received, stored, packed, and delivered. Any time an item is claimed expired, or moved, the updated info is automatically synced across your entire system.

Tracking products this way allows you to easily audit your stock. Our client services team also notes that many of our customers have found that it is especially useful in denser storage areas. This is because in a densely-packed warehouse, items may be difficult to see and physically count, and a warehouse management system gets around that by tracking what is where.

This accuracy and real-time visibility create a foundation for minimizing your footprint. Here’s how.

Know When to Reorder

With this clear and accurate data, it’s easy to identify the right time to reorder, which avoids stockout.

Respond to Changes

Comprehensive and real-time visibility into your whole network allows you to see where bottlenecks are and deal with them before they become an issue.

Forecast Demand

Finally, robust and accurate historical data can help you more accurately forecast demand. This ensures you’re never carrying more safety stock than needed.

Manage Expectations and Enhance Customer Service

Accurate data on inventory can also enhance the order process. While this doesn’t eliminate stockouts, it helps cut down manage expectations and deliver effective customer service in a case where one occurs.

At Routeique, our team notes this is true whether clients use their own E-Commerce portal or our solution to capture orders. 

A strong connection between the order portal and inventory ensures that customers have an accurate view of what will be on hand is important to ensuring service delivery. It ensures customers know what’s in stock when they order. Additionally, with the Routeique order portal, if a product won't be available, it will suggest recommended alternatives.

Beyond Technology:
Consider Your Inventory Management Strategies

At Routeique, our team offers more than technology. Our experienced team comes to the table as a strategic partner. Because of this, in addition to suggesting tech solutions, we examine and optimize processes to help your organization run smoothly.

That’s why, in cases where a client wants to increase their service level while minimizing their footprint and need for safety stock, we may suggest additional solutions that exist outside of the Routeique platform. 

For example, different vendor and supplier strategies can also help reduce the need for keeping safety stock. In these cases, working closely with your vendor or retailers can help reduce the need for you to hold extra stock.

Before we dive in though, there’s one key point worth noting. While these recommendations are process-based, they still rely on having access to inventory. In fact, since you’re introducing partners outside of your warehouse, it may be even more crucial that the info is accurate and up-to-date. For this reason, a warehouse management system is still an important foundation.

Opting for Vendor-Managed Inventory

With vendor-managed inventory, you share your inventory data with vendors. With this data, they’ll control your order size and the resupply lead times. If they’re an effective supplier, they will strategically resupply you when needed, based on their own lead times and your inventory data. This contrasts with a situation where you’re responsible for monitoring your own stock, sending out purchase orders. (In addition to reducing inventory needed, it can cut down on your team’s work.)

At Routeique, we connect you to your entire supply network. Our tools allow for seamless communication between both you and your vendors. It securely shares the data your suppliers need while maintaining privacy where needed.

Selling Goods On Consignment

In a consignment situation, you own the stock until it has been sold. In other words, your retailers hold the product, but don’t need to pay for the product until it’s been sold. Because of this, additional goods can go directly to the retailer without the need to store them on-site. This helps reduce your stock levels and ensures that end customers are less likely to experience a stock-out situation.

Learn More

Our team of supply chain experts takes each business’s unique situation into account. With a combination of technology, data analysis, and consulting, we work hard to help you succeed in the supply chain space.

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