How to Improve Inventory Tracking？Simple Guidance for You in Inventory Management

With the rapid development of third-party logistics, 3PL‘s advanced inventory management system can save you time and money.

However, for companies with relatively small business volume, in-house management is still required. Choosing the right inventory tracking method can help improve inventory accuracy.

What Are the Types of Inventory？

Before you can improve warehouse management, you need to understand the inventory types accurately. The following are the different types of inventory:

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Raw Materials, materials used to manufacture products
Work-in-Progress, unfinished product being produced
Finished Goods, finished goods stored in the warehouse, waiting to be sold or shipped
Overhaul/MRO, maintenance, repair, and operation supplies, items used to support and maintain the production process and its infrastructure. These items are usually consumed due to the production process’s needs but are not directly part of the finished product. MRO inventory includes lubricants, cleaning supplies, gloves, packaging materials, and other supplies. It also consists of some office supplies, such as staples, pencils, copy paper, etc.
Transit Inventory, the items have been loaded and are in transit.
Anticipation Inventory, to meet the expected surge in sales inventory
Decoupling Inventory, supplies, or products reserved in anticipation of stagnation in some production links
Cycle Inventory, products shipped from a manufacturer or supplier to a company, and then sold to customers immediately
Theoretical Inventory, the inventory rate in and outreaches a balanced ideal state, and inventory products can pass through the manufacturing system’s minimum stock without waiting. But in reality, the warehouse will always have some inventory (such as MRO inventory, decoupling inventory, etc.)

What inventory tracking method is the optimal solution?

Manual tracking

You must complete the inventory count for the outbound and inbound warehouse inventory in the manual tracking system. Besides, any updates to inventory records require manual operations. You can manually copy the item number and any other relevant details, but this inventory tracking method can be time-consuming and has a higher error rate. But one advantage is that you don’t have to pay for barcode scanners and other expensive equipment.

Barcode and QR code tracking

Bar codes or QR codes are commonly used in inventory tracking. The inventory system automatically extracts detailed information by scanning the product barcode or QR. The administrator can quickly and easily change the information in the system. This inventory tracking method can achieve efficient inventory management, so 3PL service providers usually recommend this method.

RFID tracking

As with barcode and QR code tracking, you can use RFID tracking to scan products and automatically extract their detailed information. The main difference between RFID and other scannable codes is the technology behind them. RFID tags scan more comprehensively, so they are very useful for inventory systems that move many products. However, only a few inventory management software supports RFID tracking because it requires specialized (expensive) tags and scanning equipment.

Why Do You Need a 3PL Warehouse Management System？

What is 3PL Warehouse Management System?

3PL Warehouse Management Software System (WMS) manages and records almost all physical cargo warehouse operations, including inventory management, shipping, receiving, putaway, picking, packaging, etc.

This software system helps simplify many time-consuming processes for one or more warehouses. Suppose your order volume exceeds the processing capacity of the internal warehouse. In that case, you can outsource these tedious tasks to a third-party logistics company, and they will design a set of suitable warehousing logistics solutions for you.

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Benefits of Using 3PL Warehouse Management System

Inventory Control: 3PL WMS can collect the receiving, movement of the entire fulfillment center inventory through a barcode scanner. All SKU inbound and outbound data can be tracked and confirm inventory products’ location in real-time, improving inventory accuracy.

Realtime Inventory Tracking: Professional 3PL will provide partner companies with inventory management visibility data. Shippers can easily know the progress by accessing reports and tracking real-time inventory remotely online.

Nowadays, many warehouse management solutions can be seamlessly integrated with enterprise resource planning or corporate accounting rights and health solutions, allowing customers to adjust their current and future development needs.

Due to these functions’ convenience, the original time-consuming tasks such as manually generating management reports are eliminated.

Advanced 3PL Billing System: Billing is a very important part of the 3PL warehouse management system. When a 3PL provider provides this service to multiple customers, this process requires a comprehensive 3PL system to support. An accurate billing system will significantly reduce billing time while improving other functions.

Order fulfillment automation: 3PL providers are order fulfillment experts. They have adopted many advanced systems and equipment to support order fulfillment to save customers time and operating costs. Integrated WMS aims to simplify the order fulfillment process and make these tedious tasks simple and easy.

In Conclusion

With the explosive growth of 3PL warehouse and inventory management software, the emerging 3PL management software is expected to bring higher efficiency, thoughtful design, and advanced services to provide customers with the best solutions.

Third-party logistics companies will provide many benefits for your supply chain, and you can save time and resources while maintaining efficiency and customer satisfaction. If you haven’t considered adopting a 3PL warehouse management system solution, now is the time!

Pick and Pack: Why Pick and Pack Services Is Important?

From the moment the customer places an order, the warehouse will receive notifications of the pick and pack fulfillment process from the online store back-end order system. To ensure that customers can obtain order logistics information in the shortest time, warehouse pick and pack services are a crucial process. An efficient pick and pack process can also help increase sales and customer satisfaction.

What Is Pick and Pack Service?

The process of pick and pack:

You can get pick and pack services from the 3PL company, or manage your order fulfillment. In both cases, the fundamental pick and pack process is similar, including three main steps: pick, pack, and ship.

Order picking: When the warehouse system receives the order fulfillment information, the warehouse worker will take the packing list and pick the goods from the warehouse shelf. This step is the key to picking and packing. Because the efficiency of this step depends on your warehouse management strategy. You should decide how and where the goods are placed based on the sales of different products.
Order packing: The goods will be packaged at the packaging place, and the packaging will wait for transportation after attaching various identification label information.
Order shipping: Orders are sorted by carrier on the loading dock, and then loaded and transported in a suitable way (air, sea, truck, etc.).

These three steps seem very simple to operate. However, an effective and efficient pick and pack process is mixed with many crucial details that are interlocking. To better increase your sales and customer satisfaction, you should study these methods and strategies. This is true whether you run a startup or a one-million-dollar online store.

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Pick pack ship order strategies:

Piece picking: is when an employee/picker handpicks each product for an entire order, as they come in.
Batch picking: is similar to piece picking, except that orders will be done in batches all at once, instead of one at a time.
Zone order picking: is when employees are assigned to a specific area of the warehouse and only pick one order at a time within that area. If an order needs products from more than one zone, it is handed off usually via conveyor belt.
Wave picking: is a combination of batch and zone picking, where employees will stay within a zone but pick more than one order at a time.

Four important criteria for choosing a warehousing service plan

Warehouse operations and management contain many important factors. When choosing and researching a warehousing service plan, be sure to carefully consider the following aspects to find a solution that suits you.

Factors Considered in Warehousing Service Plan

SKU quantity & storage cost

Track inventory, calculate potential storage costs, and the size of the warehouse space required, SKU can help you a lot in these parts. For example, for each cup you sell, the color, size, style, etc. of the quilt require a separate storage unit. And you need to pay a separate storage fee for each of these variants.

If your product has only a few SKUs, the storage cost is much more cost-effective than having 1,000 SKUs. Moreover, suppose you have 1000 SKUs but only 1500 monthly sales volume, then some companies may not be able to cooperate with you.

It depends on how order fulfillment companies work-they don’t exist as standalone warehousing service plans. Their goal is to transfer inventory through order fulfillment. This means that you can frequently replenish inventory to meet sales needs without paying high storage and logistics costs.

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Seasonal changes

The demand for products fluctuates with the change of seasons, making warehousing and logistics more complicated. You need to pay attention to the sales of your products in the off-season to avoid unnecessary expenses caused by excessive inventory occupying warehouse space.

Warehouse location

The choice of warehouse location depends on your marketing strategy plan. If your goal is to store a large number of products, you can find warehouses in the suburbs or near transportation hubs. If you want to deliver orders to your customers as soon as possible, you need to place a warehouse near the customer’s shipping destination.

Warehouses in urban or large cities can meet your needs for fast delivery of large quantities of orders. Shortening the logistics distance and time can speed up transportation. If your customers are not all in one area, please carefully select one or more suitable central warehouses.

Warehouse Management System

Whether you plan to manage your warehouse or outsource logistics to a 3PL company, the technology of warehouse management and operation is crucial. The distribution software can automatically execute the order fulfillment process while concentrating orders, shipments, inventory levels, fulfillment centers, and customers in one place.

By connecting your sales channels, the order information will be automatically sent to the warehouse so that warehouse employees can start picking. Each step is recorded and tracking information is sent back to the customer.

Amazon Dropshipping Guide: How to Dropship on Amazon

Have you ever thought about developing your dropshipping on Amazon?

Why do you need dropship on Amazon?

Amazon, one of the most well-known brands in the world; the most popular shopping application in the United States; 80.64% of mobile users entered the Amazon APP in September 2019.

But here’s the bottom line: Amazon customers are highly loyal, and you can leverage the Amazon platform to build your brand.

You can add Amazon sales channels to your Shopify store, and it’s more convenient than ever.

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How does Amazon Dropshipping work?

So, how do you start your dropship on Amazon? Very simple! You can do it through the Fulfilled by Amazon program.

In this procedure, you need to deliver products to Amazon warehouses, which manage the inventory and ship them directly to customers.

Because Amazon has the most sophisticated logistics system in the world, they can deliver your products to your customers more quickly. Today, online shoppers want to get a package the next day.

What are the benefits of Amazon Dropshipping?

No warehouse cost

One of the advantages of Dropship on Amazon is that you do not need to worry about warehouse rent. Sellers do not need to pay warehouse costs by using FBA to ship products to Amazon warehouses.

Amazon supplier

Amazon buys products in bulk from many European suppliers. Then Amazon puts these products in their warehouses for sale to customers. The company also provides strategic business guidance for all Amazon suppliers, and suppliers can grow rapidly.

Large number of active users

Amazon has 300 million active users, which means you can use Amazon as a sales channel for your products. Sell products at the right price to attract customers and get rich returns.

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Amazon dropshipping tools

This is a list of tools that are very useful when you learn how to start dropship on Amazon.

Merchant Words-You can use Merchant Words to view the search volume and data of product title keywords.
FeedCheck-FeedCheck allows you to easily view all product reviews. If you sell a large number of products in your store, it is a great tool. You can use it to improve reviews while providing better customer service. Besides, it can also be used to monitor competitors’ products.
Sellery – The tool’s repricing strategy can help you win the Amazon Buy Box. Its pricing experiments can help you maintain product competitiveness while maximizing profits.
Amazon Volume Listing Tools-This tool helps you easily download order and inventory information tables, as well as modify prices and product quantities.

How Inventory Management Techniques Can Increase Your Profit!

Why is inventory management important?

Inventory management helps reduce operating costs

Enterprise daily operating costs include the staff salary, warehouse rent, storage cost, logistics cost, and so on a series of spending. Inventory management techniques can help you minimize losses.

Inventory means that you store a valuable and limited resource in the warehouse, and you can make it cash only by selling this resource.

For the following types of inventory you need to sell in time:

Products with shelf life that are prone to spoilage: food, medicine, cosmetics, etc. If these products are not sold in time, they will deteriorate and need to be discarded in time.

Outdated products: Outdated phone covers, clothing, or shoes that were popular last year, etc. Such slow-moving goods will occupy a certain amount of inventory space for storage.

To minimize storage costs, you can take certain measures and technologies to achieve efficient inventory management and lower inventory levels.

Effective inventory management techniques are listed below:

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First In First Out (FIFO)

First in first out (FIFO) is an inventory management method widely used worldwide. This method means that the first batch of goods entering the warehouse is also the first batch of products sold.

For example, supermarkets or some small shops will place the latest date of yogurt at the end of their shelves.

But what are the limitations of this technology?

Some products are not suitable for this inventory management technique. For example, red wine. Retailers like to store this kind of goods because they do not have strict shelf-life requirements. Although FIFO can better and more accurately value the inventory on the balance sheet, products such as wine are not so accurate.

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ABC inventory management

ABC classification is also a commonly used inventory management technique, which usually divides inventory resources into three categories:

Class A inventory control is the most stringent and requires accurate records,
Class B inventory control is slightly strict and appropriate records,
Class C inventory control is the simplest and least record.

What are the benefits of this inventory management technique?

ABC analysis is a method of identifying inventories that have a significant impact on the overall inventory cost. There are different controls for each type of inventory.

In other words, each inventory does not have the same value. Dividing inventory into categories A, B, and C can help you determine their respective importance to your business.

First, Class A stocks are critical, often high-value and high-margin items that require regular and frequent inspections; B is next; Class C belongs to the lowest value, so you just need a little attention. First, Class A stocks are critical, often high-value and high-margin items that require regular and frequent inspections; B is next; Class C belongs to the lowest value, so you just need a little attention.

So, how to allocate A, B, C inventory?

There is no clear ratio, everything depends on the goals and standards you set.

According to the Pareto principle, 20% of products bring 80% of revenue. The ratio of ABC’s three inventory is rough as follows:

Class A inventory—accounting for 30% and 60% of total revenue
Class B inventory—accounting for 50% and 30% of total revenue
Class C inventory—accounting for 20% and 10% of total revenue

Why do you need to outsource order fulfillment?

The fierce competition in e-commerce means that you need to spend most of your time promoting business development. Therefore, you can outsource order fulfillment work to a professional third-party logistics company to handle it.

Cut down operating cost

Cooperating with 3PL can reduce infrastructure and logistics costs. You can avoid the trouble of renting warehouses, equipment, packaging products, maintenance, etc. by outsourcing order fulfillment. Order fulfillment service providers develop appropriate strategies and predictable costs so that you can better control operating costs.

Optimize business development

If small businesses or suppliers waste too much energy to cope with all day-to-day operations, they will miss the opportunity to develop new customers.

Delivering all operations after the customer places an order to a professional outsourcer will help you spend more time and energy on expanding your business.

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Increase flexibility

One of the most important reasons for outsourcing order fulfillment is to increase the flexibility of processing orders.

If your warehouse does not have enough staff and space, the enormous daily order processing will bring an extensive load to your company’s system. For the sustainability of your business and to provide customers with a good customer experience, one of the best ways is to hand over the processing of these orders to a professional company.

Enhance the ability to respond to the market environment

The COVID-19 outbreak this year has severely disrupted the supply chain, which means that transportation costs have risen. To reduce the impact, one of the best ways is to outsource order fulfillment, so that your company can avoid the impact of rent, wages, and other expenses. Reducing overhead costs can help companies survive in a severe economic environment.

Timely delivery

The introduction of Amazon’s “two-day delivery” clause has intensified the time competition for e-commerce companies to deliver products to customers. You must pay attention to the delivery terms described on your website and deliver products on time. Strive to transform customers who purchase once into lifetime users.

How to choose a fulfillment company?

What is a fulfillment company?

Fulfillment company usually refer to the organization that provides companies with services such as order receipts, packaging, and transportation. The functions and scope of order fulfillment are now more complex and efficient than ever before.

A technologically advanced fulfillment center can manage and simplify the fulfillment process through order fulfillment software or systems.

Outsourcing the management of the order fulfillment process to a professional fulfillment company allows companies to focus more on order growth instead of internal warehouses, inventory management, transportation, and returns.

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What kind of factors should you consider when you choose a fulfillment company?

1. Delivery speed

Now Amazon Prime has set a new two-day delivery rule, which means that consumers expect faster shipping speeds than ever before.

So, if your company’s current order volume is considerable but the order delivery speed is far behind, then your customer churn rate will gradually increase. When your company can no longer optimize the order fulfillment process, you can try to cooperate with an order fulfillment company.

Excellent and professional fulfillment companies have effective management systems and order fulfillment software, enabling them to deliver quickly.

2. The location of the distribution warehouse

The most important point of order processing outsourcing is to examine the location of the distribution warehouse of the partner company.

To meet customers’ expectations of delivering products in a short time and improve their user experience, it makes sense to choose an order fulfillment center close to the customer. For your international business, you need to confirm whether the other party provides global delivery services before cooperating with them.

To reduce the additional burden on your business and devote more time to increasing order volume, you need to study the order fulfillment system and software used by the fulfillment companies you cooperate with. Different fulfillment companies vary order fulfillment software, and you need to ensure that their software is easy to implement and can seamlessly integrate with the business platform applications you are using.

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3. Transparency

The transparency of order fulfillment is also an essential part of your corporate image. Survey data shows that 88% of consumers want to track their products in real-time. 69% of consumers said that if the merchant fails to deliver the product within the promised delivery date, they will not shop again in the future.

Therefore, when you choose an order fulfillment partner, you need to know whether it can meet the delivery time limit you require.

4.Return management

Due to the fast and convenient free return and exchange policy, about one-third of online orders are canceled orders. Some returns are uncontrollable (the customer doesn’t like the product at all). A reputable fulfillment company will manage the product well and minimize returns.

5.Cost

Your cooperation with a third-party logistics provider involves some initial costs, but in the long run, you will save labor, logistics costs, storage costs, etc. Besides, you also need to make sure that the fulfillment center you cooperate with can provide you with the best deal.

Since you have to pay for delivery services (your products are always moving after all), the delivery center should not charge you for long-term storage.

Due to the shipping volume of the shipping center, the distribution center can also get a larger discount from the operator than any single e-commerce retailer, so you want to make sure they can pass on some of the savings to you. These reduced costs often allow e-commerce retailers to compete with industry giants by offering free or reduced-price transportation.

What are the benefits of warehouse & distribution automation that you need to know?

Warehouse & distribution automation includes automated data collection and inventory control. All work is coordinated through the warehouse control system and the use of necessary hardware equipment and software systems. This helps greatly improve efficiency, but what tools used to achieve it?

What facilities are involved in Warehouse & distribution?

Barcode labels: They form the basis of warehouse & distribution automation, through which products can be tracked. Barcode labels can accurately capture product data and eliminate errors in product tracking or product shipping. The use of barcode labels can realize automatic warehouses, inventory monitoring, purchase planning, improve picking efficiency, optimize transportation, and reduce stock-outs.
Inventory Management System (IMS): This facilitates real-time monitoring of inventory levels, product information, and storage locations, thereby providing companies with a high level of inventory control.
Automatic storage and retrieval system (AS/RS): The software system consists of machines that move up and down on optimized channels to retrieve or place items. They provide improved inventory control and product tracking. They can also ensure that the warehouse is better arranged vertically and horizontally, thereby saving inventory. The key elements of AS/RS include storage and retrieval machines, automated guided vehicles (AGV), frame structure, and warehouse control system software (WCS). All these components work together to receive, place, pick up, pack, and ship items along an optimized route.
Necessary hardware equipment: If you do not use the necessary hardware, you will not be able to retrieve data and monitor activities from the barcode label, and will not be able to achieve automation. Commonly used devices are portable data terminals, stationary computers, bar code scanners, rugged tablet computers, and label printers.

The benefits of warehouse & distribution automation

Automating your warehouse system can bring the following benefits:

Reduce labor costs and other operating expenses.
Improve warehouse space utilization and optimize warehouse layout and processes.
Improve accuracy, efficiency, and productivity while minimizing labor expenditures.
Improve inventory accuracy and avoid complete depletion of inventory.
Automatic storage and retrieval system (AS/RS) will improve inventory control and cargo tracking.
Automatically collect product shipment data and inventory tracking to eliminate inventory misplacement, shrinkage, or loss.
With the available data, the efficiency of the operator’s picking, packaging, and transportation improved, so that the order can be shipped and delivered in time.

Why Is a Warehouse Management System So Important?

Warehouse Management System (WMS) is the cornerstone of logistics system. WMS constitutes the internal system of a logistics company and can be highly configured to control and manage storage, distribution, and other aspects. A powerful WMS is needed for an organization to conduct effective and productive operations, including inventory balance, material management, delivery process, and review.

If you lack an effective warehouse management system, it is impossible to obtain a well-functioning logistics system. Effective WMS involves using a set of customized solutions to achieve a smooth workflow, not just data or storage processing.

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The Importance of the Warehouse Management System

Inventory accuracy

For inventory management, one of the challenges most companies face is how to maintain inventory accuracy. Inventory management systems can help you manage inventory better, faster, and easier. You can reduce the order cycle time and improve the number of orders WMS will help you adjust inventory levels by using real-time tracking of inventory changes. You can better understand the products in the warehouse and you can better track any changes required. Respond quickly to customer needs and inquiries, and can provide customers with a better customer experience.

Centralized warehouse location

The warehouse management system saves a lot of time and cost by obtaining a centralized storage location. WMS overcomes the production gap based on the real-time inventory situation, so as to easily carry out storage, transportation, and distribution. You can even quickly find suppliers and target markets, so you can continuously move in and out of goods to ensure the continuity of the company’s logistics system.

Improve product quality

WMS’s effective inventory quality and management will improve your production quality. You can keep up-to-date with vendors and suppliers, and better track the shelf life of raw materials or products. So you are now easier to deal with defective products and guarantee the high quality of the products.

By improving product quality, you can not only ensure high-quality service but also improve order processing. An efficient warehouse management system can improve production quality, and WMS’s control over the production speed, efficiency, and quality of products will give you great confidence in promoting the company’s products.

Formulate marketing strategy for shopping season

You can take full advantage of festivals or other shopping seasons to expand your business. Since the production process can be tracked through real-time information, you can also analyze and track customer consumption behavior. WMS can better help deal with customer problems and reduce the risk of customer complaints and negative reviews.

Therefore, you can take advantage of increased growth to increase operations without paying additional fees. This means you will get new opportunities to reach higher sales. By having the right warehouse management system, you can now sell more products and increase profits, which means a high return on investment.

Risk Management

In response to changes in demand and supply and to minimize losses, WMS highlights its importance. You can deal with risks through changes in product demand changes, and you can also bring sales decisions by considering sudden increases or decreases in product market prices.

You can improve your purchasing decision while replenishing suitable inventory. Therefore, you can check inventory at any time to better meet the needs of delivered products. Logistics warehousing also provides you with additional storage space to meet future needs.

An effective WMS ensures improved inventory control and management, which means you can ensure the safety of your goods and avoid product deterioration, theft, or accidents.

However, you must choose an effective software solution, and you must also consider the key functions of warehouse and logistics.