4 inventory storage best practices

Companies want their products moving out their doors and into customer hands. Certain business plans, however, require long-term inventory storage. Here are four suggestions for cost-effective and secure warehouse strategies:

1. Analyze cost
When planning or expanding a business, entrepreneurs need to take the cost of inventory storage into account.

Business 2 Community suggested storage costs makes up to 2 to 5 percent of all inventory expenditures. This number can vary greatly if the company has special needs. Certain inventories, like foods or beverages, need refrigerated warehouse rooms. Other products might need airtight containers and extra effort must be spent to ensure they are not breached.

A warehouse must plan for the price of storage because it determines which products should be made available. If storage cost is low, a company can offer "long tail" products, or items with long sales cycles. If extended storage is quite costly, however, a business needs to prioritize merchandise with a quick turnaround.

2. Design space for storage
Warehouse managers want layout designs based on product needs. Whether it is used for long-term storage or as a rapid distribution center, the space must accommodate daily activities.

Large merchandise requires strong shelves and wide hallways. Temperature control systems need a lot of energy. Multichannel Merchant recommended using a diversified system. Each product gets its own section and products are clearly labeled with their intended destination. A new company can speak to similar businesses to learn from their history with storage.

It's important to capture information from the initial days of business. If daily activities or customer demand is not what a company expected, it is easier to change facility layouts or warehouse strategies while the organization is still young. Beginning businesses should speak to a software partner about implementing a cost-efficient start-up system.

3. Security
Storing valuable items in a single location proves tempting to criminals. Even if a business believes its merchandise isn't a target for theft, it could be a victim of vandalism or other business halting intruders.

A warehouse should have the usual business security measures. Locks on the door and surveillance cameras are a good start, but to keep items safe, a company has to track product movement and employee access. Demand Media advised warehouses to perform consistent physical inventory counts to audit materials stored for long periods. Regular count reporting gives managers visibility of warehouse security.

Only certain employees should have access to products. A warehouse management system needs clearly defined employee roles. Workers are responsible for certain sections of storage and they should regularly report their activities.

4. Warehouse tools
Data capture tools provide simple solutions to warehouse storage needs. Information for items in long-term storage is available without constant trips to the physical location.

Equipping workers with barcode scanners and mobile warehouse inventory management tools makes counts and data reporting easy. It integrates the warehouse design with daily operations by providing warnings when a product is placed in the wrong location. Barcode labels on items create information trails when merchandise goes missing.

Warehouse managers who want to see more benefits of data tools should download the "Keeping the Physical World and the Virtual World in Sync" whitepaper.