Best Practices for Managing Warehouse Inventory

Written by Ng Li Hsia Alicia, DLSM

by Ng Li Hsia Alicia, DLSM

Most businesses have plenty of areas to improve, especially in their warehouses.Good inventory control techniques for warehouse management start with an organised and well-maintained site. Managers should regularly inspect warehouse operations, ensuring that stock is stored in a way that allows staff to easily and safely access it. Below are some best practice inventory control techniques to help improve your operations and ensure the smooth running of your warehouse.

Know Your Best Sellers

and orders for each product or customer. This information can be extremely useful for determining what your best sellers are. By placing this high-volume stock closer to the shipping area and ensuring it is easily accessible, you can eliminate unnecessary labour time.

Stock Inventory as Per Need

Keep the stock levels at 1.5 times the normal for abstaining from obstructing of working capital. With enhanced inventory holding, you can viably diminish the expense of storage.

ABC Inventory Control

ABC analysis of inventory helps you keep working capital costs low because it identifies which items you should reorder more frequently and which items don’t need to be stocked often – reducing obsolete inventory and optimizing the rate of inventory turnover

A-Items – Best-selling items that don’t take up all your warehouse space or cost

B-Items – Mid-range items that sell regularly but may cost more than A-items to hold

C-Items – The rest of your inventory that makes up the bulk of your inventory costs while contributing the least to your bottom line

Plan an Efficient Layout

Plan the usage of each space in warehouse. Imprint each rack to limit perplexity while storing and getting stuff. Make sure warehouse has enough space for forklifts or pallet jacks to mobilize.

Supply Chain Ads

Use Fixed and Movable Tracking Options

Using movable tracking options will allow you to see where you placed a product, how you can access it and if it’s ready for shipment. Movable tracking enables you to see where items are located at all times, and it makes the entire process faster, easier and more intuitive.

On the other hand, fixed tracking is also an option for many businesses. This way you can easily manage and assign destinations with precise efficiency. You can seamlessly combine fixed tracking with movable tracking if you want to acquire optimal results. At the end of the day, fixed and movable tracking options can do wonders if you use them correctly. Often times there is a learning curve and initial investment incorrect inventory management processes, but these short-term investments have large payoffs in the future.

First-in-first-out (FIFO) Inventory Control

The first in, first out (FIFO) method of inventory valuation is a cost flow assumption that the first goods purchased are also the first goods sold. A simple principle, yet vitally important to mention – especially if dealing with perishable items. For most retailers, the last thing you want is always using the newest stock to fulfil orders. This leaves older inventory sitting in the warehouse and susceptible to damage, decay or passing best before dates. It’s worth making a rule to store new inventory from the back of shelves and then take from the front – automatically enforcing a FIFO system.

Use a Quality Inventory Management Software

Proper inventory management for warehouses can be done as long as have the right software. The latest tools on the market allow to acquire real-time updates on the products, which can be tagged with RFID for quick and accurate inventories.

Apply Cross Docking to Maximize Space

The objective of cross docking is to reduce the shelf storage time of stocks in the warehouse. It helps in transporting warehouse delivered goods quickly to the outbound carriers that can take the stocks to distribution centres.

Implement Cycle Counts

Cycle counting is a method of perpetual inventory counting that takes place cyclically, over time with only small sections of inventory counted during each cycle. Each day, week, or month a different product is checked on a rotating schedule.

There are different methods of determining which items to count and when to count them, but items of higher value should be counted more frequently. Instead of waiting to undertake an annual physical stock take, performing regular inventory control audits through cycle counting enables you to analyse any discrepancies to spread reconciliation throughout the year.

Utilizing cycle counting prevents the major disruption that is the year-end inventory count. With cycle counting, you’ll no longer have to dedicate an entire business day, lose revenue, and must pay employees overtime to count inventory.

Spending shorter amounts of time each day, week, or month to evaluate inventory is not only less stressful, it’s also better for your bottom line.


If we have a good practice for managing warehouse inventory, this will help anticipate product shortages and enable us to keep simply enough inventory without having too much in the warehouse likewise can lessen costs, improve customer satisfaction and increment warehouse operational proficiency.


Chong Hui Ying, DLSM. (2019). “Seven best practices for cost effective warehousing” Retrieved from SIPMM:, accessed 08/09/2019.

Chua SeokKhim, DPSM. (2019).” Crucial Techniques to control Construction Inventory.” Retrieved from SIPMM:, accessed 15/09/2019.

Lee Yi Xian, DLSM. (2019). “Inventory control techniques for effective warehousing.”, Retrieved from SIPMM:, accessed 08/09/2019.

Melanie. (2019). “5 Best practice inventory control techniques warehouse management.” Retrieved from, accessed 15/09/2019.

Newcastle System. (2016). “7 Best Practice for Inventory Management for Warehouses.” Retrieved from, accessed 15/09/2019.

Prakaash Gunasengaran, DLM. (2017).” Technique to improve the warehouse order picking process” Retrieved from SIPMM:, accessed 08/09/2019.

About the Author: Ng Li Hsia Alicia has substantive years of experience in the field of warehouse inventory control, specifically in the Marine & Offshore sector. She is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Alicia Ng completed the Diploma in Logistics and Supply management (DLSM) on September 2019 at SIPMM Institute.