Whether your company is moving millions of products through your doors or only handling a few small orders at a time, there are a number of threats to your inventory. Having a proper warehouse management system in place serves to reduce those risks by deterring individuals from working outside of the system, and catching signs of error before they can get out of hand.

Types of Risk

What are the most common sources of risk to your inventory? They come in three major forms: theft, missing inventory, and damage. Theft is a direct result of employee actions. Unlike retail environments, theft from outside individuals is fairly uncommon. Missing inventory is typically caused by poor management of the shipping dock or failure to keep the warehouse clean and organized. Finally, damage is typically caused by shipping errors, or because items are being handled more often than necessary.

Where Does Warehouse Management Come In?

Warehouse management systems provide direct benefits in all three of these risk areas. First, by moving to a more proactive cycle counting system, it will be significantly easier to spot signs of theft in your warehouse by providing more complete data points. It will also keep you from losing inventory in the dark, dusty corners of your warehouse as you will be checking those locations even if you don't have any picks in those areas. A robust WMS is capable of integrating with all of your ERP software, so you can ensure that products ordered are received accurately and accounted for.

A WMS also decreases the amount of product that is damaged as it moves through a warehouse by routing orders more effectively. Instead of having a product transferred to multiple bins, handed off to different team members and carried back and forth across the floor, the warehouse management system will minimize both the amount of travel time and the number of touches for any given product. The fewer times the product is handled, the greater chance it will make it to the finish line in good condition. Furthermore, most WMSs support quality assurance procedures that will catch any leftover damaged goods before they make it out the door.

These three areas pose the greatest risk to any company's inventory. When left unchecked, they can cost companies millions of dollars each year and cause unexpected losses when errors are discovered long after they occurred. Investing in a solid warehouse management solution will reduce instances in all three areas and ensure that more of your products are reaching your customers.