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What is a Warehouse Management System?

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What is a Warehouse Management System?

What is a Warehouse Management System? 

Before getting to know and discussing further the Warehouse Management System (WMS), first we have to know what exactly is meant by "Warehouse"

A warehouse is a location that functions to store goods for the needs of the production process or production results in a certain amount and period which is then distributed to the location to be directed based on consumer demand and orders.

Warehouse management (warehouse management) can be defined as the management of activities that are interrelated in the temporary storage of goods. 

Meanwhile, the Warehouse Management System or warehousing management system itself is the main key in supply chain management, where the main objective is to control all processes that occur in it, such as shipping, receiving, putaway. , move (movement of goods), and picking (taking goods).

The main purpose of the Warehouse Management System is to be able to control all processes that occur in the warehouse. 

The Warehouse Management System can also provide information related to the location of storage of goods based on the number of goods and types of goods so that the storage area in the warehouse can be used optimally and will make it easier to find out the amount of stock for each item in the warehouse. 

The company can also reduce the number of human errors that occur, maximize the efficiency, effectiveness, and productivity of warehouse employees.

Several Methods in the WMS

In the Warehouse Management System, there are several methods you can use, including:

FIFO (First In First Out)

This methods is the first item that comes in is the first one that comes out.

An example is eggs, meaning that the eggs that are sold first are the first eggs that enter your shop. If you sell eggs that enter later, the eggs that enter first will be damaged. 

This method is widely applied in various businesses because of its simple calculation, either a physical / periodic system or a perpetual system that will produce the same inventory valuation.

LIFO (Last In First Out)

This Methods is the last item entered must exit first.

For example, if the item is a brick, automatically the top one has to be taken because it will be difficult to pick up the bricks that come earlier at the bottom.

FEFO (First Expired First Out)

This methods is almost similar to FIFO, however, that is, items that expire quickly must first come out.

Examples are several types of Fast Moving Consumer Goods (FMCG) businesses such as pharmacies, food stores, cakes, or convenience stores. Products that have been sold have a very short time or expiration, so they will spoil quickly if they are not sold quickly.

No matter how simple or complex the application is, the purpose of the warehouse management system remains the same, which is to provide the information needed by management to efficiently control the movement of material in a warehouse. 

Ultimately, the goal is to increase your profits and you can't get more profit just by selling more products, but also by selling products faster, more accurately, and getting more profit from satisfied customers.

Inventory Control Strategies

Now, let's take a quick look at the inventory control strategies to improve efficiency in the warehouse, including:

1. Product Stock Categories

The first inventory control strategy is to provide product stock categories so you can easily track and find them. 

You can perform ABC analysis as a method of categorizing your company's inventory, it consists of dividing the product stock into three categories namely A, B, and C with A being the most valuable and C being the smallest.

For example, let's say Category A is the smallest category, namely the product that is always provided as the biggest moneymaker. Category B products are less important than Category A products and more important than Category C products, whereas Category C products are of little importance. 

If there are more than three product categories, then the fourth product can be called Category D.

2. Use Inventory Control Software

Internet of Things has changed the world of business today. It affects how we live and how we work. Inventory control software also prevents human error, the most common problem in handling stock and tracking products entering and leaving the warehouse.

Using inventory control software can provide several advantages, such as: predicting stock requirements, optimizing product stock levels, monitoring stock movements from one warehouse to another, conducting inventory assessments, and tracking shipments.

3. Perform Regular Audits

If your company wants to implement a proper inventory control strategy, it is highly recommended to conduct regular audits. 

This stock-taking is necessary to make sure the physical quantity of the product matches the data and that all your other strategies are working. 

Auditing or stock-taking will reduce error rates and improve data accuracy, checking product stock quantities faster as the process continues. All you have to do is use the barcode scanner integrated with the system to track and inspect products.

Those are the 3 best inventory control strategies that you can apply to improve inventory control in your company. 

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