Importance of Good Warehouse Inventory Management

Importance of Good Warehouse Inventory Management

As all of us in the industry know, good warehouse inventory management is a crucial part of building a successful brand and business. It covers everything from purchasing and shipping, to tracking, storage, rotation and reordering. It can literally make or break a business, because it doesn’t matter how good your products are if they are not stored correctly, and delivered efficiently to customers.

Let’s illustrate the importance of warehouse management with an example: imagine that a customer places an order, and we receive it, but on sending the order to the warehouse we are told that the product is out of stock. Or, due to an error, the warehouse ships an incorrect item. 

The result is a disappointed customer, and a frustrated sales team. After the effort that goes into getting a sale, the last thing we want is for that customer to have an unsatisfactory experience, which will likely mean they will take their business elsewhere. 

So, the key to inventory management is to have the right products in the right place at the right time. But how do we achieve that? How can we ensure that we are stocked up on the items that sell the most? How do we ensure that products are sent out correctly and efficiently, guaranteeing a positive experience for the customer? And how do we do all this while keeping our operations cost-effective? 

One of the most reliable solutions for all of the above is a Warehouse Inventory Management System. A warehouse management system addresses the common challenges faced in warehouse management, and controls and manages all warehouse activities.

What are the main advantages of a Warehouse Management System (WMS)? 

Improved inventory management

As we mentioned earlier, ensuring the warehouse has the right products and dispatches them efficiently is key to a successful operation. A warehouse management system not only eliminates the burden of paperwork, but can even achieve greater accuracy through automation and reduced human error. Detailed inventory management also mitigates stock issues, allowing warehouse managers to refresh inventory only when needed, which is both space and cost-effective.


Updated real-time information makes inventory management a much faster, easier and efficient task. Warehouse inventory systems can show you what you exactly have in stock at any given time. This ensures that your company will always be able to fulfil orders on time and accurately. It also allows you to get data on what sells quickly, what stays on the shelves too long, and what items tend to sell together.

Customer satisfaction

Excellent inventory management means orders are fulfilled faster and shipped to customers more quickly, meaning they are more likely to buy from you again. There is nothing worse than buying something online and receiving the wrong product, or having to wait too long to receive it. More accurate delivery improves the customer experience, and that means they will come back for more, and may even recommend your company to others.

Saves time and money

Increasing accuracy through a warehouse inventory system could even make it cheaper to run your business. Accurate inventory control helps to reduce the risk of loss due to obsolescence (outdated) or deterioration of items, and helps you to maintain the right amount of stock, preventing excess spending and storage. 

Proper stock control can also minimise the administrative workload, reducing the need for unnecessary paper work and reduce the staffing costs. The use of technology speeds up tracking and fulfilment operations, ensuring inventory records are accurate.

Essentially, with a proper inventory management system, less time and resources are spent on stock management.

Types of WMS

Now that we have seen the advantages of WMS, let’s have a look at the different types available. There are four main types of warehouse management systems: standalone, modules in supply chain management (SCM) software, modules within ERP systems, and cloud-based systems.

WMS module in supply chain management software

A WMS module in supply chain management software is recommended in the case of companies with complex supply chains. A WMS module focuses on the warehouse operations as part of a larger integrated supply chain management software system which manages all the activities required to create and deliver a product, including inventory management, transportation and logistics.

WMS module within an ERP system

A WMS module within a larger ERP system is another option for automating warehouse operations. Most ERP systems have some form of warehouse management capability or module, but do not offer the same level of functionality as a standalone WMS.

Standalone WMS

Standalone warehouse management systems provide features that enable efficient day-to-day warehouse operations, for example, monitoring and controlling supply chain flow from when goods arrive and leave the warehouse. 

Standalone warehouse management systems can be very dynamic and very customizable and work particularly well for smaller companies such as a third-party logistics providers. However, they may be less useful for larger operations as they lack some of the integration benefits offered by WMS that are integrated with a supply chain management system or an ERP system.

Cloud-based WMS

Warehouse management systems started out as on-premises systems. However, nowadays, cloud-based systems are becoming more and more common due to the fact that on-premise WMS require more internal resources. Cloud-based WMS reduce the expense of managing and maintaining on-premise systems, because they no longer need all the expensive hardware, data centres and staff. 

Which WMS is right for my business?

Selecting the right WMS for your business is an important decision, and it is worth taking into account the following four Rs:

Requirements: Have a clear idea of what your warehouse operational needs are and which areas need improving. It is also important to think about how your company plans to grow over the next five years so that you won’t outgrow your WMS.

Research: Find out which WMS are available, which ones suit your company, and develop a list of potential WMS providers based on your current and future requirements, as well as functionality and cost.

Reach out: Contact the WMS providers you think will best suit your company and ask them any questions you may have, and request a demo so that you can try them out.

Result: Make a final decision based on your research and the type of WMS that best fits your company’s needs.

Don’t miss out!

Join our monthly newsletter to stay at the forefront of the last-mile logistics. Subscribe now for the latest insights!

    This site is registered on as a development site.