Warehouse Management: What It Is and How to Do It Right

This warehouse management article helps you understand practical advice for any business that is involved in running warehousing operations.

Good warehouse management is critical for businesses that store materials or goods. A well-managed warehouse can help streamline operations, improve inventory accuracy, and meet customer demand. In this article, we examine the components of warehouse management and how it can benefit your business. We’ll also look at how software fits into warehouse management, and tips for optimizing your warehouse.

warehouse management

Table of Contents

What is warehouse management?

Warehouse management is the process of directing the tasks in a warehouse for the storage and movement of goods. It involves tracking inventory movement, ensuring accurate stock levels, and optimizing operations to meet customer demand.

Benefits of Effective Warehouse Management

When warehouses are properly managed, it can have several positive impacts on your business. Good warehouse management help reduce costs, streamline lead times, improve your customer experience, reduce errors, and ultimately increase the overall productivity of your business.

  • Reduced Costs
  • Streamlined Processes & Faster Lead Times
  • Happier Customers
  • Increased Accuracy and Reliability in Inventory Tracking
  • Overall Increase in Productivity of the Organization
  • Automated Processing of Warehouse Activities
  • Better Insights
  • Reduction of Stock Outages and Obsolescence Issues
  • Better Use of Storage Space
  • Smoother Entire Supply Chain Management
warehouse with workers and pallets

The Core Warehouse Management Processes

Warehouse management involves several different processes which all need attention to have a smooth running system. These core processes include:


Managing incoming shipments is called the “warehouse receiving” process and is an important part of warehouse operations and must be carried out efficiently. Processes such as unloading goods from trailers/containers, checking for damage/defects, stocking items in the warehouse, and ordering new inventory when needed must be handled properly.


After materials receive, they need a warehouse strategy and process for when and where to place them in the warehouse. This is the warehouse putaway process.


Proper storage of goods is critical to ensure accuracy in inventory tracking. Items should be stored according to their size, weight, shelf life, and other characteristics so that they can be easily located and retrieved when needed.

Order Fulfillment

Once a customer order enters the system, the warehouse must be able to efficiently pick, pack, and ship out these products. The fulfillment process should be optimized to ensure customers are happy with their purchase.


Warehouses need to manage shipments effectively so that goods are delivered on time and in good condition. This involves planning routes, selecting carriers, obtaining tracking information from carriers, and managing freight costs.

Returns Processing

Returns are an inevitable part of doing business, and warehouses must perpare to properly handle any returns that come in from customers. This may involve inspecting returned items, restocking them back into inventory, or disposing of them as necessary.

Cycle Counting/Inventory Accuracy Checks

To ensure the accuracy of inventory levels, warehouses should conduct periodic cycle counting or full physical inventories. This involves going through the warehouse and counting all items to ensure that the system is accurately reflecting what’s in stock.

warehouse automation robotics

Benefits of Automating Warehouse Management

The benefits of automating warehouse management are numerous. Automation streamlines processes, reduces errors, and increases accuracy—all leading to increased productivity and cost savings. Additionally, automated processes can provide real-time visibility into inventory levels, helping to ensure that products are available when needed. Other advantages include:

Reduced Labor Costs

By automating manual warehouse processes, companies can reduce labor costs by up to 30%. This benefits all types of businesses, but especially those with large warehouses, where the need for additional staff scales more.

Increased Accuracy

Automated systems can help eliminate warehouse mistakes because of human error in a wide array of tasks. For example, automated cycle counting can help avoid discrepancies between inventory levels and what is actually on hand.

Improved Customer Experience

Automated processes can help improve customer service by providing real-time visibility into order status, location of goods, and estimated delivery times. This helps keep customers informed, reducing the number of inquiries related to orders and making it easier to provide timely responses when needed.

In addition to these benefits, automation can also make warehouses more efficient in terms of space utilization and energy consumption. As technology continues to evolve, new solutions are being developed that can further improve warehouse operations—ensuring that companies remain competitive in an ever-changing marketplace.

How Software Fits Into Warehouse Management

Software is now playing an increasingly important role in warehouse management. This software is called a “Warehouse Management System” or WMS. By leveraging the power of technology, warehouses can automate mundane tasks and streamline operations to save time and money. Furthermore, a good warehouse management system provides real-time tracking and inventory data, allowing for better decision-making and improved customer service.

Automating Tasks

One of the most useful applications of this software in warehouse management is the automation of certain repetitive tasks. For example, automated systems under the overview of a warehouse control system can quickly process orders and retrieve items from storage locations with minimal human oversight. This eliminates manual errors that can slow down the fulfillment process, resulting in faster delivery times and improved customer satisfaction.

Want to know more about warehouse automation?

Warehouses and fulfillment centers are increasingly turning to automation to optimize their order fulfillment processes. For more information, check out our article on warehouse automation trends!

order fulfillment barcode scanning

Digital Inventory Management

Another useful application is the automated tracking of expiration dates for products like produce that have a shelf life. This ensures that only safe products are shipped out.

Utilizing a Warehouse Management System (WMS) allows warehouses to maintain accurate, digital inventory records on stock levels and item locations at all times. This ensures that items are always available when customers place orders and reduce lost inventory due to misplacement or theft. Furthermore, WMS systems can be integrated with accounting systems to ensure accurate financial records are kept up to date.

Reporting & Analytics

In addition to improving operational efficiency, some warehouse management software solutions offer analytics capabilities that enable warehouses to optimize their processes further. For instance, advanced analytics tools may be used to monitor performance metrics such as order fill rate or lead time variability across different workflows or locations for identifying areas for improvement. Analyzing historical data also helps warehouses detect trends such as seasonality or changes in demand over time so they can better plan for future requirements.

Finally, many warehouse management software solutions come with built-in reporting tools which allow companies to easily generate reports on various aspects of their operations such as sales figures or labor costs. These reports provide valuable insights into the overall performance of a warehouse which helps managers make informed decisions about staffing needs or resource allocation for maximum efficiency gains.

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Tips for Optimizing Your Warehouse Operations

There are several things that we consider “low hanging fruit” when it comes to optimizing your warehousing. Here’s a few of them:

Focus On the People

Sometimes the best warehouse management solution isn’t software at all – it’s people. Proper warehouse management isn’t possible without the proper warehouse manager. Staff is the life blood of any company or organization. So, if you put the right kind of warehouse managers in place, then you can ensure that your warehouse process will follow suit.

It’s also important to properly train your staff so they are better prepared to handle warehousing tasks efficiently. Provide employees with adequate training on safety procedures as well as the use of any newly implemented technologies so they can work productively without compromising safety standards or quality control protocols. Additionally, promote culture initiatives like cross-training which allow employees to gain additional skills that may be useful when tackling complex warehouse operations tasks in the future.

Go Digital

One of the most important aspects of warehouse optimization is utilizing software. Warehouse Management Systems (WMS) offer powerful tools for streamlining operations and providing real-time data tracking and analytics. Inventory control systems help ensure accurate records on stock levels and item locations at all times, preventing lost inventory due to misplacement or theft.

Automate Repetitive Tasks

Another key tip for optimizing your warehouse is to invest in the right technology. Equipment such as automated guided vehicles (AGVs), robots, pallet stackers, and conveyors to save time and energy when moving goods between storage areas or loading/unloading shipments from trucks or containers. If that’s too much to bite off, barcoding technology helps keep track of items more efficiently, and wont break the bank.

The Future of Warehousing

Want to know more about the current and upcoming trends in the warehousing industry? Check out our article on the future of warehousing!

Get Your House In Order

Warehouses need to stay organized and keep clutter at bay by maintaining an effective housekeeping system that includes regularly scheduled cleaning sessions throughout the day as well as periodic deep cleaning cycles each month or quarter depending on usage needs. As a part of this, you should consider implementing LEAN warehouse principles. This helps create a workplace environment that is safe for both workers since it eliminates potential health hazards due to dust buildup or hazardous materials accumulation over time.

Conduct Regular Audits

Running regular warehouse audits to assess the operations, process, and inventory management for your warehouse can significantly help move the needle towards optimized warehouse management. Audits can also help maintain compliance with safety regulations and bring maximum efficiency for customers.

What role does warehouse management play in the e-commerce industry?

The eCommerce industry has shifted toward customers demanding low-prices and fast shipping times. Combine that with an increasing total volume of orders as business moves away from retail shops to online purchases, its more important than ever for any fulfillment warehouse to run efficiently.

Warehouse management plays an essential role in the e-commerce industry by ensuring that goods are accurately stored and tracked, orders are quickly and efficiently fulfilled, and operations run smoothly. Otherwise, the massive eCommerce industry would be unsustainable.

Gone are the days when a 3PL can “play it by ear” regarding the scale and efficiency of their warehouse operation. Every minute matters in the new eCommerce world so all the aspects of warehousing from warehouse layout to warehouse space, and even the shipping services.

Of course, just about every eCommerce brand must have a partner equipped with a warehouse management system. Not only that, but also a way to input orders directly rather than manually entering them, which can lead to errors.

What metrics should you track in your warehouse?

Tracking metrics in a warehouse is essential to ensure smooth and efficient operations. These metrics are often referred to as warehouse KPIs (key performance indicators). Here are some of the key metrics that should be tracked in a warehouse:

Inventory Levels

It is essential to track the amount of stock available in the warehouse at any given time. This will help businesses to understand if there is an excess or shortage of products or materials compared to demands. Tracking inventory levels also ensures that companies have sufficient supply on-hand for orders and can identify where there might be issues with overstocking or under stocking.

Order Fulfillment Rates

Keeping track of the rate at which orders are fulfilled helps businesses gauge the effectiveness of their warehouse operations. If your fulfillment rates are low, it could indicate an issue with processes such as picking and packing, or a lack of adequate labor. On the other hand, high order fulfillment rates indicate that processes within the warehouse run smoothly and efficiently.

Labor Costs

Monitoring labor costs associated with managing warehouse operations helps organizations identify areas where they can save costs by streamlining processes or introducing automation solutions such as AGVs or robots. This can help improve overall efficiency while reducing labor costs significantly over time.


Safety metrics need to be closely tracked and monitored. First and foremost because employee health depends upon it, it also because a reliable workforce helps ensure business can stay afloat in the competitive landscape.

Customer Satisfaction Rates

Tracking customer satisfaction ratings gives organizations valuable insights into how customers perceive their services. This helps them identify gaps between customer expectations and actual outcomes which then allows them to make changes where needed to improve customer experience consistently over time.

Free Warehouse Planning Tools

Warehouse Capacity Calculator

Need help figuring out the total volume of usable space in your warehouse? We built a simple tool to help you calculate that.

Pallet Storage Capacity Calculator

The pallet storage capacity calculator quickly determines the total number of pallets your warehouse can store based on rack configuration.

Final Thoughts About Warehouse Management

Because warehouse management is such a critical part of the entire supply chain, you need to make sure you are devoting enough resources and focus to do it correctly. If doing your own warehousing operations is not part of your strategy, let us help you! Our warehousing services are suited for providing the best-managed process at competitive rates to reduce your costs.

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