Running a business during a long-term crisis requires reducing costs and increasing work efficiency at all stages. Coronavirus outbreak puts everyone before new challenges that can’t be overcome using methods from the past. The crisis of 2008 was primarily overcome by lowering resource prices. However, this time this approach will not work because prices are as low as ever. One of the alternative options implies the increase in inventory turnover, which can work both for manufacturing enterprises and for trade organizations.

Warehouse management systems provide means for workflow automation irreplaceable for effective ROI boost possible thanks to reduced labor demands, enhanced accuracy, and improved efficiency. The use of custom-made warehouse management systems helps to reduce long-term costs significantly. In this article, we’ll consider how the adoption of such systems can help your business achieve set goals even in a long-term crisis.

Get Full Control Over Your Warehouse

If you want to minimize the effort required for managing your warehouse, you can’t rely on outdated software and manual processes. Such an approach usually leads to multiple errors and delays, which can harm your business and cause tons of rework. Out-of-stock conditions will most definitely lead to customers’ dissatisfaction and damage your reputation. To avoid such unpleasant consequences, you have to revise your approach to warehouse accounting.

First of all, it’s not enough to know that you have 1093 pieces of product A and 7734 pieces of product B in your warehouse. Such information as production date, shelf life, necessary storage conditions, and other influential features should be stored in the system and easily accessible. One of the cheapest and nonetheless effective approaches implies QR code labeling. QR code, if we compare it to the barcode, can store far more information. Almost any smartphone nowadays has a QR scanner, which can free you from the need to use special barcode scanning devices. Since QR code can store hundreds of times more information than a barcode, you can record everything you need from the product type to the customer’s shipping address.

You can adopt a warehouse management system that provides warehouse workers and drivers with access to a mobile QR scanning app. As a result, there will be no need to use extensive documentation for tracking items movement in and out of the warehouse and monitoring their further delivery to customers. Warehouses can save dramatic amounts of working hours by automating these processes with QR codes. After a new item arrives, a warehouse worker can scan it, and all the info will be automatically saved in the system. Similarly, the current state of an item can be changed after it is added to the order. Drivers can scan QR codes to confirm that a particular item is loaded into the truck. And, finally, the mobile QR scanning app can be used to confirm delivery of an order. Therefore, QR codes combined with custom-made software for warehouses can help to eliminate errors and speed up documentation processes.

AI and machine learning are excellent tools that can take the planning process to a whole new level. Your software system can analyze the flow of items through your warehouse to adapt your facility layout accordingly. For example, rather than group similar products together, you can group products according to velocity. If you put fast-moving products closer to shipping lanes, you can significantly reduce the number of hours needed for loading. Market demand for seasonal goods can also be predicted by such systems, which will ensure the availability of storage facilities and provide the necessary storage conditions in advance.

Automatic data collection and its further analysis enable better preparation and planning. It includes ensuring that all items planned for a shipment arrive at the same time the designated truck arrives. It helps eliminate the waste of warehouse space since there’s no need to keep inventory at your warehouse for hours or even days. Besides, you can efficiently track the flow of inventory through your warehouse, minimizing the possibility of losing track of a valuable item. Every movement from an item’s arrival at the facility to its shipping can be recorded with mobile QR scanning apps, which drastically reduces the likelihood of lost inventory and other errors. If you know precisely how many certain items arrived at your warehouse and how many were sent to customers, you can define minimum stocks to meet new urgent orders and be prepared for possible interruptions or delays in supply schedules. Regular reports generated by your warehouse management system can provide you with all the required data in an easy-to-read form.

If you have full control over the flow of goods through your warehouses, you can plan easier and make predictions for orders that haven’t arrived yet. Warehouse workers can be reallocated beforehand to areas expecting upcoming items from lower-priority areas to optimize staff utilization and avoid delays. When you track all your orders in real-time, you can prevent out-of-stock situations. The system can automatically inform you about the need for replenishment. The delivery process can be optimized, as well. The system can analyze the items that you have to deliver and compare them with routes to customers. The orders that contain similar items can be grouped together to simplify the picking process and optimize your warehouse staff’s work. Route optimization features will help you ensure that your drivers will deliver multiple orders using the most optimal route. Besides, you can ensure that your trucks do not make delivery half empty, which will help lower fuel costs per delivery.

Make Your Data Work For Your

Optimizing the workflow is just the first step to achieving the long-term prosperity of your business. To ensure that all your actions have the desired result, you have to monitor dozens of KPI’s continuous. Lucky for you, a custom-made warehouse management system can automatically track important indicators and provide you with an interactive report regularly. With this info before your eyes, you can easily define how changes in business processes affect the productivity of your company. Let’s consider which KPI’s are especially important for assessing the efficiency of your warehouse:

  • Inventory turnover shows how many times inventory is sold and then replaced again in a time period. Usually, the default period is a year, but you can set a shorter period if needed. Analyzing this indicator, you can plan at all levels of your income statement. Controlling this KPI helps your business forecast the cash required to reinvest in inventory in the coming months according to your past performance;
  • Inventory write-off represents inventory that no longer has any value for the business. The reasons may vary. Technological obsolescence, theft, or damage are the most common among them. This indicator allows determining how much writing off inventory costs your business, and help you to decide if any corrective action is needed;
  • Holding costs or carrying costs reflect the costs incurred in storing and maintaining inventory. This indicator may include insurances, security, associated equipment, and labor costs, and other parameters. All these costs involved in managing the warehouse are pretty essential to monitor when making decisions about inventory;
  • The average inventory is the median value of inventory over a defined time period. This indicator shows how fast inventory is selling and allows monitoring the average volume kept on hand. A fluctuation may highlight issues with purchasing or sales;
  • The average days to sell inventory shows how long it takes to buy or create an inventory and turn in into a sale. Since this indicator shows the duration of time your cash is tied up in your inventory, the smaller it will be, the better. A lower number shows that your company is selling off your inventory efficiently and frequently. If the number is high, your company may struggle with obsolete, high-volume inventory.

The best part about custom-made warehouse management systems is that you don’t have to monitor all these and many other KPI’s manually. You can set threshold values for the necessary parameters, and the system will automatically notify you if they are exceeded.

Make Long-term Plans

A custom-made warehouse management system provides a much more extensive range of possibilities than determining which products and in what quantity are stored in your warehouse. Analyzing the circulation of goods through your warehouses for long periods, you can form your annual supply volumes and develop efficient delivery schedules. Achieved market sustainability will allow you to make long term agreements with suppliers, which will result in dozens of benefits for your business.

Long time agreements allow you to avoid some unpleasant surprises caused by the rise in buying prices. Both parties can feel secure for a more extended guaranteed period, which is an excellent protective mean during a long-term crisis. The necessity to spend precious time on additional re-negotiating can also be avoided in long-term agreements. Furthermore, such an approach can ensure the continuous flow for required products without any unpredicted interruptions. Additionally, long term agreements allow building better relationships due to increased interaction for a more extended period.


One of the real ways of saving on materials and reducing the volume of frozen funds is to increase inventory turnover. Custom-made warehouse management solutions allow achieving this goal by providing mechanisms for advanced monitoring of the turnover of goods in the warehouse, and real-time KPI’s analyzing. Long-term market sustainability is achieved thanks to the use of such systems that can allow businesses to make long term agreements with suppliers, leading to increased returns.

If you want to learn more about warehouse management systems and how they can help your business, please contact us.