Maintain Accurate Records: the Importance of 3PL Inventory Management

Date: June 23, 2020


Don’t Become A ‘Wherehouse’

Imagine this. An order comes through to your warehouse from an ecommerce customer. You’ll need to ship three counts of items X, Y, and Z, and it’s closing in on the last carrier pickup for the day. X and Y are picked and packed quickly and efficiently due to their consistently high purchase rate, but item Z is nowhere to be found. You know from QuickBooks that there should be stock available, but it’s not where you think it should be. Perhaps it was moved to make room for another product? Maybe you moved the last one but didn’t record the sale?

Regardless of the reason, the inventory cannot be shipped if it’s not in your actual possession, and now you’re wasting valuable manhours searching thousands of square feet of floor space that could be used fulfilling equally important ecommerce orders from other customers. You’ve just realized, your warehouse has become a ‘wherehouse’.

Memorizing the exact location of every single product in a warehouse – especially for ecommerce 3PLs, just isn’t impossible. That’s why companies have inventory management systems or warehouse management systems (WMS) that help them track product count, location, and more. Industry-leading 3PLs have implemented five inventory management best practices to ensure that a warehouse never becomes a wherehouse.

Tip 1: Record Item Movement in Real-Time

As a product is moving from one location to another (at any point in time, either into or within the warehouse), its location should be recorded. The longer it takes to update the location of a product, the higher the chance your inventory location becomes inaccurate. Log any move as soon as possible in your WMS because any time lag between the physical move and the system location update increases the chance for confusion on the warehouse floor. There is always the chance of the physical location not getting updated in your system. Paperwork getting lost or someone forgetting to make the move can happen at any time, which is why it’s so critical to update the inventory location as close to the actual moment it’s moving as possible.

This, however, brings up the very reasonable question, “How does one update the item location in real-time if the worker is on the floor, away from the WMS?”

Tip 2: Deploy Mobile Scanning

Barcode scanning is one of the pillars of inventory management, and with improvements in technology, scanner technology can be used on almost any mobile device. And while there are a lot of different scanner options available, it does not pay to skimp on your scanning hardware. It is an investment in the accuracy of your warehouse, as these scanners connect to your WMS and relay information in real time. This includes a wealth of information about the inventory and its features, where it’s located, and in what quantity. When used correctly with an inventory management system like 3PL Warehouse Manager, inventory accuracy can rise to 100% accurate.

Scanners come in all different types with a bunch of different applications. While warehouse grade scanners come with a higher up-front cost, they often have barcode readers with higher sensitivity that can scan barcodes from great distances. Cellphones can work for small warehouses and those without any mobile scanner currently, but in the long run, it is a wise choice to invest in a scanner that suits your 3PL warehouse’s specific needs.

Tip 3: Label Warehouse Locations (Including Non-Racked Areas)

For any movement of inventory to remain accurate within your WMS, the warehouse needs easily identifiable locations. These locations should be mapped and labeled with intuitive codes for easy understanding. As an example, a warehouse label with the code 1-2-3-4 could indicate row 1, column 2, level 3, position 4. By using these types of three-dimensional coordinates, warehouse workers can determine exactly where they need to go to find specific inventory, even if they don’t have the whole warehouse inventory map memorized.

One thing to note, producing these warehouse location labels in-house is not always the best option. Professional printers produce higher visibility labels that will last longer and can be scanned from further distances.

Tip 4: Label Unlabeled Product

In the same vein as the best practice above, label any unlabeled product. It might sound like a basic idea to make sure all inventory and product is labeled, but you’d be surprised to find out how many warehouses leave products unlabeled because they think it’ll be more efficient to spend time doing other tasks.

When inventory is not labeled, this can lead to several problems throughout the warehouse. If the warehouse team can’t easily identify product it could seriously delay system update times. Labeling unlabeled or ambiguous items at the time of receipt can help alleviate this issue. This will then translate to easy identification of product along with the ability to scan product that comes with no barcode identifier. And once it’s ready to move out, you’ll be one step ahead of the curve.

Tip 5: Preform Regular Inventory Audits

Finally, always use regular inventory audits (cycle counts) as fail safes to double check inventory quantity and location. Also, count higher volume and higher value products more frequently. Over time errors will occur. There will be inventory discrepancies and things will be misplaced, no matter how well the warehouse runs. To account for this, run regular inventory audits on your available product. This way, when that order comes in, there won’t be any lag time between order received and packing/shipping.

As they say, an ounce of prevention is worth a pound of care.

Warehouse Inventory Management Best Practice Conclusion

To overcome inventory management hurdles that can lead to becoming a wherehouse, speak to those with experience and who have gone through this already. At 3PL Central, we’ve assessed countless warehouse workflows and helped to improve the efficiency and accuracy of inventory management, which ultimately helps them to scale. If you’d like to see what we can do for your warehouse too, request a demo here.


Daniel Zimmerman

Written by Daniel Zimmerman

Daniel is an experienced digital marketer, having formerly worked for some of the biggest digital marketing agencies in Southern California. Now tackling the logistics industry, he specializes in utilizing the right medium to find and show customers WMS solutions to pain points they face every day.