How is Batch Management Critical in Warehouse Operations?

by | Jul 6, 2022 | E-commerce Industry, Warehouse Management

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Table of Contents:

  • What is Batch Management?
  • Top 6 Operational Challenges Faced by Organizations
  • Importance of Batch Management Systems
  • How to Use Batch Management in Warehouse Operations?

What is Batch Management?

The batch management system enables an organization to monitor its inventory efficiently and effectively while keeping track of its internal or external operations. Batch management helps the company split the produced goods into several batches depending upon the date, time, and quantity of production, ensuring that the right batch is shipped first, lowering wastage.

Batch management is helpful for any business, product manufacturer, or service provider, ranging from clothing, medical and pharmaceutical, food industry, FMCG, etc.
Let us look at the challenges organizations face in their warehouse operations and how a batch management system provides an efficient approach to this problem.

Operational Challenges Faced by Organizations

Some of the typical inventory management challenges if proper batch management is not used are:

1. Changing customer demand

The consumers’ demand in the marketsis also essential. fluctuates continuously, which is impossible to predict. Therefore, keeping too much stock could increase your liability wherein it is difficult to sell, thus incurring losses. On the other hand, holding too little can lead to the consumer’s demand not being fulfilled. This situation can be controlled and managed efficiently using batch management.

2. Irregularities due to physical paper documentation

It is not easy and feasible to manage all the inventory physically, which is time-consuming, costly, and inaccurate.

3. Lack of skilled inventory personnel

It is not always possible to find qualified personnel who can manage inventory strategy single-handedly and are up-to-date with the latest technology in batch management. Only upgrading the inventory management platform is not enough; capable management is also essential.

4. Complexities in managing warehouse space

Managing space in a warehouse is a very tedious business; keeping track of available space is necessary so new inventory can be ordered and stocked accordingly. A batch management system can help plan new stock delivery as per available space.

5. Perishable, fragile stock

Perishable, fragile, and low-shelf life goods need special care and management for storage. They require particular inventory controls and a damage prevention strategy provided by a batch management system.

6. Inefficient actions and procedures

Using the process of manual inventory management along with a simple technology is easy if there is one warehouse to manage and if the inventory is small. However, as your business starts growing from shipping a few hundred orders a day to multiples of 1000 to 10,000+ daily, it becomes mandatory to use reliable batch management and inventory systems in warehouse operations.
A batch management system helps control the inventory by tracking the movement of products which automatically helps in smooth inventory functioning and end-to-end inventory development.

Importance of Batch Management System

Using a batch management system for warehouse processes makes the overall operations efficient. Some of the benefits include:

1. Control over quality – Batching management in a warehouse helps trace a defective product, reducing the chances of delivering faulty or low-quality goods. It helps stop the delivery of a batch that is faulty.

2. Tracking a batch quickly and accurately – A serial number given to a specific batch can be tracked easily. It helps improve logistical processes as a product can be easily tracked using the serial number and one can help optimize storage, delivery, and recall processes.

3. Reduced chances of human error – Keeping track of inventory in a physical form with human intervention will sometimes cause errors, mistakes, theft, and negligence, leading to loss, increased expenses, and inventory shortage. Thus, maintaining a barcode system with scanning machines is important.
how to use batch management in warehouse operations

How to Use Batch Management in Warehouse Operations?

For any modern enterprise that has to manage a large inventory of products, a Warehouse Management Software (WMS) is widely used to streamline logistics and improve profitability. The organization can track the expiry of products and analyze customer questions and the return process for specific batches using batch tracking. To implement batching in your operations, you can start by:

1. Using batch numbers

Having a batch number for each consignment enables the organization to easily track each product and manage the additional process. Each batch can have its own unique number, including relevant information like purchase price, purchase date, and expiry date. Using this batch number, the warehouse can essentially get end-to-end traceability of goods, which include:

  • Planning efficient distribution of products
  • Understanding shortage or high quantities of particular products in the supply chain
  • Identifying goods ready for delivery
  • Managing product returns and recalls

2. Implementing an intelligent WMS to centralize operations

In today’s digital age, the intelligent warehouse management system (WMS) is all about creating an ecosystem of machinery and digital tools that interact with each other via the internet. Called the Internet of Things (IoT), this new technology enables your warehouse operations to be streamlined and is useful for tracking, finding, and storing particular products. Using this batch management system in warehouse operations, you can essentially gain the benefits of:

  • Streamlining data related to your warehouse or warehouses in a single platform
  • Reducing workflow challenges and addressing any gaps that you can find
  • Using predictive analytics to make data-driven decisions using batching processes
  • Reducing the cost and resources required to manage warehousing processes

3. Automating stock management and distribution

A great way to improve overall warehouse management is automating the warehouse processes. While warehouses rely only on batch management for efficient shipping and distribution, it can also help improve stock management as it enables the WMS software to accurately keep track of key decisions like:

  • Which products are understocked?
  • Which needs to be replenished soon or will be out-of-stock?
  • Does the warehouse already have enough products in your batch to satisfy the sales orders?

This will improve your inventory management and help you account for the spike in sales, understand product movement for each batch, and make data-driven decisions on placing orders for a fresh batch.

The Final Word

With increasing demand and complexity in warehouse management and supply chain logistics, having an efficient batch management system for your inventory can help streamline your organizational workflow and even help reduce time, cost, and resource requirements for managing warehouse operations.

In most cases, the FIFO (First In First Out) model works ideally and is efficient when the goods do not have a shelf life. So for electronic goods, home appliances, and mobile and car accessories, warehouses can rely on the FIFO model and deliver their orders accordingly.

However, when it comes to goods with a shelf life, such as FMCG, packaged food, fruits, vegetables, baby care products, etc., the FEFO (First Expired First Out) method needs to be applied. This ensures that goods expiring soon are picked first and shipped when an order is placed.

Since managing these processes with vast volumes of goods is extremely difficult and strenuous, a warehouse management system is an ideal option. Technology can help track and raise alerts on goods depending on their expiry, purchase date, and other criteria. With the help of batch management software, this entire operation is made much more efficient, ensuring that processes work optimally and enabling the WMS to fetch coherent information.

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