Warehouse management process explained: aspects and latest tech innovations

If we consider e-commerce with its various aspects, complex programs, and algorithms as an orchestra, then the warehouse management system can be said to be the conductor of this orchestra. It coordinates inventory control, order fulfillment, and supply chain optimization with an elegance and smoothness that contradicts its complexity.

Warehouse management systems are not just tools; they are the backbone upon which the resilience of e-commerce depends. Imagine a warehouse as a maze filled with products of various sizes, types, and life cycles. This is where the magic happens: real-time inventory tracking, automated order picking, predictive analytics, and more. All of this is seamlessly woven into the fabric of the WMS.

Various technological advancements have made the warehouse management process more exciting and enjoyable, automating operational processes and executing them in the blink of an eye, which has helped businesses overcome many challenges and ship and deliver products as quickly as possible and with the best quality.

How is that? We will cover this in the following lines.

First, what is meant by Warehouse Management and its importance?

Warehouse management is the process of planning, organizing, and executing, which includes an integrated set of operations, technologies, and strategies aimed at efficiently managing and monitoring all aspects of a warehouse's operational processes, including inventory receiving, inspection, storage, and shipping, in addition to many tasks and activities that ensure the smooth flow of goods from the point of entry into the warehouse to final distribution or shipment to customers.

The main aspects of warehouse management include:

• Monitoring, tracking, and managing inventory levels of products in the warehouse to prevent overstocking or stockouts.

• Managing the process of receiving customer orders, preparing, packing, and shipping them accurately and quickly.

• Space utilization by optimizing product layout and storage within the warehouse to maximize space and reduce costs.

• Efficiently allocating and managing available resources for tasks such as order picking, packing, and inventory management.

• Automation and the application of its technologies, such as barcode scanning and others, aimed at streamlining operations and reducing errors.

• Using data and analytics to form an integrated view of inventory status, order processing times, and overall warehouse performance.

• Quality control and ensuring product accuracy through inspection processes, quality checks, and appropriate processing.

• Returns management and efficiently handling returned products, including processing, restocking, or disposing of them when necessary.

• Adherence to safety regulations and industry standards to create a safe working environment for employees and comply with legal requirements.

Considering warehouses as a crucial central point within e-commerce supply chains, the importance of warehouse and inventory management can be summarized in several points:

• Meeting the needs of customers who desire timely storage.

• Providing the ability to place stored items in an innovative way that allows workers easy access to them.

• Reducing the physical effort exerted by workers, in addition to reducing errors.

• Reducing the costs related to storing goods by organizing them and utilizing the available space in the best possible way.

• Reducing operating costs, which include warehouse layout planning, item classification system, inventory picking, etc.

The warehouse management process includes different aspects that serve various sections within the warehouse, as clarified in this paragraph.

Key aspects of the warehouse management process

• Receiving and Inspection

This aspect is concerned with receiving and inspecting inventory to ensure it matches specifications and that there are no shortages or damages.

• Storage

This is concerned with storing items inside the warehouse after inspection according to a scientific method that ensures their classification so that they are easily accessible and prevents damage.

• Picking

This aspect is dependent on the storage and classification process. The more accurate they are, the easier it is to access the products requested by customers and prepare them for shipping.

• Packing and Packaging

This aspect is concerned with preparing products in terms of packing and packaging based on product specifications, the time required for the delivery process, and other factors that control this process, which must be considered to deliver the product with the best possible quality.

• Last-Mile Delivery

This aspect is concerned with coordinating with shipping companies to receive shipments from warehouses, then shipping and delivering them to the final consumer.

• Auditing

This is one of the important aspects of the warehouse management process, as it is concerned with monitoring inventory, ensuring product quality, and verifying its validity.

• Returns Management

This aspect is concerned with reverse logistics and returns management in terms of storing, classifying, and determining how to utilize them.

We point out that there are innovative methods and ways used for storing products inside warehouses, some of which we discuss below.

The most prominent methods for storing products inside warehouses

In the field of warehouse management, there are several modern methods and techniques to improve the efficiency of storage inside warehouses, relying on advanced technologies and effective planning to ensure optimal use of space and cost reduction, including:

• Automated Storage: This method relies on the use of robots to transport products inside the warehouse, which increases the speed and accuracy of operations and reduces the need for manual labor.

• Mobile Shelving: This is an advanced storage style that helps increase storage capacity by removing permanent aisles and using independent units mounted on floor rails to move shelves via electric or hydraulic motors, contributing to saving up to 50% of storage space compared to traditional methods.

• Flow Rack Systems: This is a method that uses tilted rails to move products from the loading area to the picking area, which reduces the time and cost required to transport products.

• Multi-Tier Racking: This is an innovative storage style that allows for the effective use of vertical spaces in the warehouse, increasing storage capacity without the need to expand the floor area.

This is about some of the methods and techniques used in product storage. To organize this process, there are systems that control the operational processes inside the warehouse.

What are Warehouse Management Systems (WMS) and their benefits?

Warehouse Management Systems (WMS) are simply a type of technology and systems used to manage operational processes inside warehouses related to inventory monitoring, demand forecasting, managing classification and picking operations, monitoring the movement of goods in and out, etc.

It is worth noting that relying on warehouse management systems and software has many benefits, which are:

The most prominent benefits of using a Warehouse Management System (WMS)

1. Improving the efficiency of operational processes within the warehouse

Warehouse management systems and software can work to improve the efficiency of operational processes and execute them automatically, which contributes to reducing the time and effort exerted by human resources and helps speed up the shipping process and deliver products to consumers on time.

It is worth noting that warehouse management systems and software rely on two main strategies in their operation:

• LIFO, which ensures better utilization of space.

• FIFO, which ensures the quick movement of perishable goods.

These two strategies work integrally and interconnectedly with other strategies and technologies to provide the necessary flexibility for warehouse management and improve the efficiency of operational processes.

2. Reducing errors

Warehouse management systems and software contribute to reducing human errors by supporting technologies and tools such as barcode scanning, RFID data tracking technology, and other technologies that allow workers inside warehouses to locate goods on shelves and inventory them carefully and without errors.

In addition, warehouse management systems and software can automatically alert people to errors related to product inspection or selection, ensuring that customers receive high-quality products at the ideal time.

3. Accelerating inventory turnover

Warehouse management systems and software have a magical effect on accelerating the inventory turnover process. This is due to the automatic execution of operational processes, which makes them more efficient and faster compared to traditional manual methods that took a long time to implement those operational processes related to inventory counting, monitoring, classification, and so on, which led to problems such as low or high inventory, which in turn leads to delayed delivery of orders, and consequently delayed cash flows and loss of customer trust.

Innovative warehouse management systems and software have given businesses the ability to accurately manage and monitor inventory and update it in real-time, contributing effectively to inventory turnover within the supply chain.

4. Providing better inventory visibility

By using warehouse management tools and software, you can provide better visibility into your inventory by tracking inventory data in real-time using RFID technology, which helps forecast demand and provide valuable information about the products most requested by customers within a specific time period. This contributes to supporting business owners and improving the process of making and taking decisions about which products to invest in to achieve more profits.

5. Improving relationships with customers and suppliers

We can say that this benefit is the result of what WMS warehouse management systems and software provide. Improving the efficiency of operational processes within warehouses necessarily means reducing costs, reducing errors, and thus reducing the time taken to process orders, prepare them for shipping, and deliver them as quickly as possible and with the best possible quality.

It is worth noting that there are many factors controlling the process of choosing the best warehouse management system among the available systems and software, which we will learn about below.

Key factors to consider when choosing the best warehouse management system

There are multiple warehouse management systems and software on the scene, and in light of this multiplicity, the challenge of choosing the best warehouse management system that will meet your needs and help you reduce errors and costs arises.

There are many factors that must be considered when searching for and choosing the most suitable warehouse management program or system, and among these factors are:

• The necessary flexibility that must be available in the selected warehouse management system for technical integration with e-commerce platforms and other sales channels to control and process orders.

• The compatibility of the selected warehouse management program with the devices present inside your warehouse, including barcode scanners, scales, printers, wearable devices, etc.

• The ease of the management system, which allows for reducing errors, increasing productivity, improving efficiency, simplifying operational processes, and completing tasks as quickly as possible and with minimal effort.

• The possibility of expansion and development, as the chosen warehouse management system must be easily modifiable and updateable to suit the future growth of the business activity and the resulting changes.

• The integration of the system with other systems used in the company, such as the human resources management system, the enterprise resource planning system (ERP), and the customer relationship management system (CRM), to ensure the smooth flow of data and information between various departments.

• The ability to manage different locations within warehouses and allocate and divide spaces effectively to improve space utilization, facilitate access to products, speed up the picking process, and thus deliver orders at specified times without delay.

• Containing strong security protocols to ensure data protection from theft, loss, or hacking.

• The ability to prepare reports and analyses by providing tools for data analysis and report generation that help in making strategic decisions and improving warehouse performance.

These are key factors that you should consider when choosing the best warehouse management system for your business activity, according to your needs and requirements.

It is worth noting that the integrated OTO logistics platform provides an innovative system for professional warehouse management represented by the "OTO Pack" application, which helps simplify your operational processes, improve efficiency, and reduce the time and effort exerted to complete tasks inside warehouses.

Through this innovative system, you will be able to organize and divide your warehouses into zones and sections so that you can speed up the process of preparing, collecting, packing, and wrapping orders, preparing them for shipping, and generating and printing shipping policies to ensure their delivery to the final consumer with the best possible quality and in the fastest possible time.

How has technology benefited warehouse management in e-commerce?

The great technological development has led to the emergence of many innovations that helped business owners manage warehouses professionally. With the boom in e-commerce and the work to accelerate the flow of inventory within supply chains, there has become an urgent need for continuous development to meet customer expectations and meet their requirements as quickly as possible, which led to the emergence of many emerging technological innovations and trends to improve operational processes within warehouses, including:

• Reliance on robots to execute operational processes within warehouses

Technological innovations have led to reliance on robots to execute operational processes within warehouses, including monitoring, inspecting, and classifying inventory, in addition to performing handling, packing, and packaging tasks, and so on.

Peer Robotics, a US-based company, has developed robots that learn from employees inside warehouses through sensing technologies that enable them to understand human intentions through gestures, commands, and physical interaction. This enables them to perform everything humans do inside warehouses with greater speed and higher efficiency.

• Inventory monitoring via autonomous drones

Autonomous drones inside warehouses are one of the emerging technological innovations from Startup Ware that play an important role in warehouse management and real-time inventory monitoring through smart drones equipped with innovative systems for internal geographical positioning of warehouses, another innovative system for obstacle avoidance, and a two-dimensional scanner to capture images of inventory for data collection.

These innovative drones are useful in the process of inventory monitoring and analyzing stored data via the cloud to predict market and consumer needs.

• Enhancing employee efficiency through wearable technologies

Warehouse employees work in fast-paced, non-centralized environments under standard timelines in an attempt to perform tasks efficiently, and wearable technologies provide the ability to improve employee efficiency by providing them with the necessary information about items inside the warehouse to deal with them quickly and accurately.

For example, smart glasses based on artificial intelligence technologies, machine learning applications, and augmented reality use optimization, grouping, and image capture technology to enable warehouse employees to pick inventory more accurately and efficiently.

These glasses also feature an innovative system that allows for the exchange of messages between employees within the warehouse to facilitate communication between them and work to improve business efficiency and complete tasks as quickly as possible.

• Accelerating the handling process inside warehouses via smart arms

Technological developments did not stop at the limit we mentioned. Rather, they contributed to improving the handling process inside warehouses and managing it with great efficiency through smart arms that automatically adapt to compensate for the employee's physical effort in the process of handling, carrying, and unloading goods.

These arms work to relieve muscle stress for employees during the process and enable them to handle heavy weights without straining the spine, thereby maintaining employee safety and speeding up the handling process.

• Enhancing the management and control process in warehouses via the Internet of Things (IoT)

Businesses use innovative Internet of Things (IoT) solutions to support warehouse management and control all operations within them. Through precise technical sensors, the temperature inside the warehouse can be controlled to suit the products, as well as controlling lighting, and monitoring data sent from smart shelves to analyze inventory and know when products should be replaced or disposed of before damage.

The future of warehouse management in Saudi Arabia

The warehouse management sector in the Kingdom of Saudi Arabia is expected to witness significant growth during the coming years, driven by several factors, the most important of which are:

• The focus of Saudi Vision 2030 on diversifying the economy and enhancing e-commerce, which leads to an increased demand for effective storage and distribution facilities and services.

• The rapid growth of e-commerce, which creates an urgent need for more storage space and advanced logistics infrastructure.

• Increased government investments in logistics infrastructure to improve it, including ports, roads, and transport networks.

According to these factors, the future of warehouse management in the Kingdom of Saudi Arabia is heading towards relying on many innovative trends, the most prominent of which are:

• Increased reliance on Internet of Things (IoT) and Digital Twin technology

This innovative technology plays a pivotal role in enhancing the efficiency of operations within warehouses. It is one of the future trends that the Kingdom seeks to achieve maximum benefit from in warehouse management with the aim of using connected devices to collect and analyze data in real-time, which facilitates tracking and inventory management operations with high accuracy, in addition to relying on Digital Twin technology, which allows simulating and analyzing live data to improve design, quality, and predictive maintenance processes to reduce unplanned downtime by predicting when equipment maintenance is needed.

• Focus on automation and robotics

The Kingdom of Saudi Arabia is moving towards relying on the automation of operational processes within warehouses and relying on robots for various purposes such as sorting, packing, and packaging operations, in addition to using Autonomous Guided Vehicles (AGV) to transport products between different areas of the warehouse effectively and safely, which contributes to enhancing operational efficiency, flexibility, and integration in warehouse management, and achieving more accurate and effective performance.

• Leveraging Big Data, Artificial Intelligence, and Machine Learning technologies

Many leading logistics companies are moving to enhance the utilization of Big Data, Artificial Intelligence, and Machine Learning technologies to contribute to improving planning and demand forecasting in warehouses by analyzing historical and current data, which helps in identifying demand trends, improving space utilization within warehouses, and prioritizing shipping and distribution operations.

• Sustainability and the trend towards smart warehouses

Shipping companies in Saudi Arabia are moving towards adopting sustainable technologies and solutions to reduce the carbon footprint, including using renewable energy sources, improving resource utilization efficiency, and implementing recycling and sustainable packaging initiatives.

[Additional Information] The most common warehouse management terms

Among the common terms in the warehouse management process are:

• Third-Party Logistics (3PL): A term that refers to external sources that are used to manage a warehouse or a group of warehouses and control all operational processes.

• Advanced Shipping Notification: A document that provides detailed information about the shipments that will take place. The purpose of this document is to provide the customer with the necessary information about the shipping time, the items shipped, etc.

• Barcode: Refers to the set of strips and symbols used to identify products where a scanner is used to read the encrypted information.

• Inventory Replenishment: This term refers to the process of replenishing inventory levels using a reserve of products located in secondary storage locations.

• Serial Shipping Container Code (SSCC): A unique identification number used for boxes inside containers for the purpose of grouping product sets together. In most WMS, the SSCC consists of 18 digits, and each container has a unique identifier assigned to it.

• Inventory Master File: A term that refers to the complete list of all products in the warehouse in terms of their quantities, types, and so on.

• Batch picking: A product selection strategy that relies on grouping a batch of multiple customer orders that contain similar items from warehouse shelves at the same time. For example, three separate customer orders involving a blue shirt of a specific size can be grouped, and the person responsible for this task will only need to go to the storage location for this product once instead of three consecutive times.

• Cold storage: A term that refers to a section of the divisions within warehouses that is concerned with storing products that need specific temperatures, such as food products, pharmaceutical products, and the like.

• Cross-docking: A term that expresses the process of receiving goods from the supplier, sorting, packing, and shipping them immediately to the customer instead of storing them on shelves inside the warehouse. This strategy is often used to fulfill delayed customer orders.

• Shipping Policies: A document detailing the contents of the shipment, which serves as a receipt presented by the carrier to the recipient.

Final tips

The warehouse management process is highly complex and requires good planning and effective execution to ensure efficiency and sustainability. Here are some tips that should be considered for efficient management of operational processes within the warehouse:

• Rely on Warehouse Management Systems (WMS), barcode positioning systems, and automation systems to improve accuracy and reduce the time spent executing tasks.

• Utilize robots and automation to improve storage and handling operations, reduce human errors, enhance productivity, and save time and effort.

• Analyze relevant data to predict demand, identify consumption patterns, improve inventory management, and reduce costs.

• Enhance cooperation with suppliers and shipping partners to achieve better supply chain integration. You must improve communications and share information effectively to improve timing, storage, and better service delivery.

• Be ready to innovate and keep pace with developments in the field of warehouse management. You must research, explore, and benefit from new technology and innovative ideas to improve task execution and manage operational processes within warehouses quickly, smoothly, and efficiently.