Many warehouses only track the total quantity of stock-keeping units (SKUs) in a given location. These warehouses are missing opportunities to improve their operations by using Package IDs (PIDs). Package identification is a more precise way of handling incoming and outgoing products by identifying them in batches for put away, picking, and cycle counting.

Implementing an effective package identification strategy can help you reduce the number of inventory errors in your warehouse, resolve discrepancies more quickly, and better enforce strong FIFO standards. All of these improvements will result in a better return on investment in the form of reduced waste and higher productivity.

1. Inventory Tracking
   PIDs allow you to assign a specific ID number to a group of parts that is received at a given time. While you may have multiple shipments of "Part A" coming in over the course of a week, you can now assign one or more Package IDs to all of the "Part A" pieces received on Monday and a separate Package ID to pieces received on Tuesday. Instead of only having a cumulative total, you will have a step-by-step view of which pieces have been touched on a rolling basis, even for products that are only stored in a single location.
   
   
2. First In, First Out
   The strengths of package identification really become apparent when it is time to pick products. Since you can clearly define which parts were received on Monday, your picking team can quickly pull those parts first and ensure that each new order that comes in will use the oldest product available. This keeps old products from getting buried beneath new shipments of "Part A" over time.
   
   
3. Problem Resolutions
   Once your picking team has transitioned to using the package identification system, you will have the ability to resolve discrepancies in inventory much more quickly and accurately. If your picker is being directed to pull X pieces from Monday's Package ID, but there aren't enough pieces there, you can instantly see that either the wrong number of pieces was received on Monday or one of the pickers who pulled from Monday's PID took too many pieces. This is a targeted way for you to resolve the problem by researching those specific actions to determine where the error was made and who made it.
   
   
4. Expiration Dates and Recalls
   Another important way to use PIDs is to help you weed out defective parts in the case of a recall or identify parts that are past their expiration dates. When you identify groups of parts by Package ID, your WMS should allow you to assign attributes like lot number or date of manufacture to each PID. Package identification breaks up your total amount of "Part A" into smaller batches so that you can easily quarantine parts that are in question from the rest of your stock.

Package identification helps warehouses quickly and easily break up large groups of a given SKU into smaller subsets that are easier to work with and track. It allows for more consistent rotation of product in keeping with industry FIFO standards and adds a more precise view of when and where products are moving on a day-to-day basis. You will have fewer items gathering dust in the back of your locations, and you will be able to keep all of your stock of a product in a single location instead of having them spread between multiple places to differentiate the dates they were received. All of this comes together to improve your picker's ability to pull the correct quantities of products from one place in the right order every single time.