Importance of Data in Warehouses

Your warehousing operations produce enough data each month. So, are you putting this data to good use? 

How crucial is this data for your warehouse management? 

As a supply chain manager, you might already know the answers to these questions. But, if you have a slight hint of doubt, here is something you must know:

10 Reasons Why Data is Important in Warehouses 

  1. Preserving Data Integrity and Enhancing Shopping Experience 

Data integrity in warehouses is about claiming the authenticity of your inventory data. You must ensure that the inventory you list for sales is available in your system.

However, if there is inaccuracy in your inventory data, you are booked for total mayhem.

For instance, 

Your sales team runs an ad for a product, and you start receiving orders for the same. 

However, when you check your warehouse, you fail to find the inventory in the system. You try tracing it but with no gain. The item is either misplaced or out of stock.

So, now you are left with some disappointed customers and a failed advertising campaign. 

Therefore, you must have accurate, real-time warehouse data to avoid such situations. And proper data management preserves data integrity.

Data integrity increases your brand’s trust value. It helps you deliver a seamless shopping experience to your customers. Thus, boosting sales and repeat orders.

  1. Curtailing Human Errors in Inventory Management 

Our human brains are certainly not made to memorize stock status, inventory counts, etc. But we need this data for processing orders, managing stocks, and automation.

Without managed data, there is an increase in human errors like:

  • Inaccurate inventory count
  • A gap in supply and demand
  • Stock-unavailability and overstocking
  • Imbalance in production management
  • Faded data integrity
  • Setting the wrong expectations for customers

Having said that, you need sorted data for your warehouse. So you can analyze and leverage this data for flawless inventory management.

  1. Feeding the Automated Warehouse Management System 

The data that you generate in your warehouse drives the warehouse automation for you. These data metrics can include:

  • The labeling information of each inventory
  • The number of units of each type of inventory
  • The location of each inventory in the warehouse
  • The total number of stocks available
  • The warehouse layout information (aisle width, ceiling height, etc.)
  • Deeper-level order tracking data

You can feed this data to your warehouse management system (WMS). And based on this data, WMS creates and applies the automation logic and controls MHEs.

The higher is the efficiency and accuracy of your warehouse data, the better is the automation.

  1. Speeding Up the Order Processing and Fulfilment Process

With managed warehouse data at your reach, you can expect faster order fulfillment.

The data keeps you informed about the stock availability, and you can plan order processing accordingly.

Moreover, you can refer back to the data while locating and retrieving an inventory. In the case of automation, the data easily guides MHEs for retrieving the stock.

As per research, data-backed automation can shrink the order processing cycle by up to 60%.

Real-time data tracking helps you manage bulk orders without off-putting any shopper.

  1. Reducing the Warehouse Management Cost

With a surplus amount of data at hand, you can employ efficient warehouse management.

The warehouse data can help you locate inventory when there are bulk orders. It curtails the back & forth to retrieve stocks and reduces the cost of order processing.

Moreover, warehouse data allows you to implement automation with ease. And you can expect a reduction in the warehouse management cost owing to automation.

Data in concert with KPIs can help you analyze and optimize labor performance. This will help you maximize productivity instead of increasing headcounts.

Data analysis helps your forecast demands, and you can manage labor accordingly. Thus, you save on the cost of the labor cost.

  1. Helping You with Informed Decision-making 

The first step towards holding the reins of warehouse management is practicing decision-making. And well-managed warehouse data can help you with it.

Your warehouse data keeps you informed at every stage of supply chain management.

  • You can take a look at the stock count
  • You can check the monthly inventory replenishment figure
  • You can check the orders in process
  • You can compare the inter-branch inventory
  • You can check the inventory placed for omnichannel demands
  • You can check the average inventory sales in the peak seasons

By analyzing this data, you can forecast sales and plan for inventory production in advance.

Also, you might want to halt the production of a certain product to prevent overstocking. Or you can opt for just-in-time order fulfillment if the staging cost of an inventory is high.

Or you might want to manage the inter-branch order fulfillment from a single warehouse.

Possibilities are unlimited! You just need to keep your warehouse data managed to practice informed decision-making.

  1. Increasing Warehousing Accuracy during the Peak Seasons

Peak seasons draw you huge sales, but it also welcomes huge management responsibilities. Unless you have your inventory data in place, things can go cluttered:

  • You might oversell against the in-stock availability, or you might fall short of staff.
  • The steep increase in order processing time might disappoint the shoppers.
  • Or worse, there can be a sharp increase in order fulfillment inaccuracies. This can trigger a boost in the cost of processing returns.

The shunned aftermath of these inaccuracies is the loss of sales. And many shoppers might abandon your brand.

Here, warehouse data plays a crucial role in managing peak seasons efficiently. The warehouse data analysis helps with:

  • Forecasting the sales for the peak seasons and managing staff accordingly
  • Planning the inventory replenishment in advance
  • Comparing the inter-branch inventory data and managing it accordingly
  1. Achieving Just-in-time Order Fulfillment

Keeping your inventory data sorted saves you from abrupt surprises.

For instance,

When you receive an order, you are aware of the stock availability. You do not have to go looking around for the products just to learn they have exhausted.

This awareness saves your time and effort. And in such a case, you have a wider window to plan for just-in-time order fulfillment.

This approach can save your sales and cut the cost of storing the inventory in advance.

So, unless your data is managed, you cannot plan for just-in-time order fulfillment. Managed data reduces the total order processing time.

  1. Meeting the Omnichannel Distribution Demands

Today, omnichannel sales have become critical to business survival. And your warehouse data allows you to compete in the omnichannel space.

You are likely to receive orders online from direct sales and sales outlets. And accurate warehouse data is the key to manage these orders.

Your warehouse data will help you compare the total and inter-branch inventory. Plus, you will have track of the inventory that is in production.

So, you can plan for inventory replenishment based on omnichannel distribution demands. And you can manage stocks over different channels simultaneously.

  1. Keeping Up with the Industry Benchmarks

Your warehouse data is crucial for optimizing your warehousing performance. It aligns closely with your KPIs and indicates the areas that need optimization.

Moreover, you can compare your warehouse data with the industry benchmarks. This will also help you scrutinize your warehouse performance.

You must use this data to feed your automation setup or WMS. And this will help you keep up with the industry benchmarks.


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