What is the core of warehouse management?

Warehouse management is an important part of supply chain management, and the original intention of supply chain management is to eliminate all inefficient activities.

Although "inventory" will not be recorded in the monthly profit and loss, it is an indispensable part of the balance sheet. There are many financial performance parameters and non-financial performance parameters about "time", for example, the timeliness of customer order delivery, cash turnover rate, inventory holding days and so on.

For enterprises, these turnaround times can reflect the current operating conditions of enterprises. Their improvement will certainly help to improve the overall competitiveness of the supply chain.

Take "inventory holding days" as an important part of cash turnover index. Reducing the inventory level and the number of days of inventory holding will help to increase profits, improve shareholders' rights and interests, and release more funds (which can be used for other investments).

As we all know, the inventory holding days can be calculated by the formula of "inventory holding days = inventory holding amount ÷ daily average consumption". However, this calculation method often misleads or makes us underestimate the actual total inventory in the supply chain.

Because this "inventory holding days" does not include unfinished goods such as in-transit inventory and orders entrusted by suppliers. Obviously, this "inventory holding days" can't truly reflect the current cash flow of enterprises.

Inventory is directly affected by time factors. The extension of time will inevitably increase uncertainty. In the process of maximizing inventory revenue, revenue management plays a very important role in supply chain management.

If the inventory level is too high, it not only means the increase of inventory investment cost, but also bears more inventory holding cost, and finally has to reduce the price to deal with the surplus inventory, resulting in a decline in total profit; On the contrary, although reducing the inventory level helps to reduce the inventory investment cost and inventory holding cost, the risk of shortage faced by enterprises increases, which may also lead to a decrease in total profit.

In the traditional concept, logistics means transportation cost, and procurement means product price. This concept also leads enterprises to ignore the importance of inventory management. In order to win more discounts, the purchasing department will not hesitate to increase the order quantity, thus obtaining preferential conditions such as exempting transportation costs and reducing the unit price of products.

Although this helps to reduce the procurement cost, the potential cost burdens such as inventory holding cost and price reduction processing cost are enough to offset the previous procurement cost savings. Obviously, transportation cost and purchase unit price have hindered effective inventory management.

Extended data:

The core of warehouse management lies in three aspects: logistics, accounts and inventory;

1. When the materials are put into storage, the warehouse keeper should personally handle the handover procedures with the consignor, check whether the name and quantity of the counted materials are consistent, and sign according to the requirements of the material handover book, recognizing that signing is the transfer of economic responsibility. Materials should be put into the waiting area first, and they are not allowed to enter the cargo hold without inspection, and they are not allowed to leave the warehouse directly.

2. The establishment of corresponding spreadsheets to achieve different management objectives not only simplifies the future query steps, but also enables the staff to find the required records in a short time without manually browsing various registers and documents, only by inputting query conditions, which greatly speeds up the query.

3. Zero inventory is the best inventory management. More inventory, more funds, and heavier interest burden. However, if the inventory is excessively reduced, there will be a broken file.

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