Warehouse Management

How to Manage Inventory in Multiple Warehouses

April 29, 2022 • 6 min read

By now, you probably know that using warehouse management software optimizes every aspect of inventory management, from ordering inventory to tracking products to forecasting demand. But, if your business stores lots of inventory across multiple warehouses, you may need to adopt a multiple warehouse inventory management system.

This article will dive deep into four strategies businesses rely on for multi-location warehouse management. We’ll also highlight why the right warehouse management software can make implementing these strategies efficient and frustration-free.


Strategy 1: Use tagging and tracking to your benefit

There are two primary components of inventory management:

  1. Organizing, barcoding, or tagging your inventory
  2. Perpetually tracking each product

To achieve an accurate and sustainable inventory system that flourishes across multiple warehouses, you’ll need to dedicate resources to both components of inventory management. 

1. Organizing and tagging inventory

The first part of this strategy is all about getting inventory organized and labeled. There are many ways to do this: with RFID tags, with the barcodes or QR codes already affixed to the products you store, or by generating customized barcodes and QR codes for unlabeled inventory you have on hand. 

RFID technology, while accurate, can be expensive and is often not necessary in a warehouse setting where there is little to no risk of theft. Barcode and QR code technology is free, especially if your inventory software allows you to use your phone or tablet as a handheld scanner. 

Plus, you can generate and print customized barcodes and QR codes for untagged items, allowing you to label every last box on your warehouse’s shelves. 

Related: What’s Better for Inventory Management: Barcodes or QR Codes?

2. Tracking inventory

Once your entire warehouse is “tagged,” you’ll rely on perpetually tracking inventory to ensure your records are always up to date. 

This aspect of inventory management helps you visualize how much inventory you have, what warehouse carries what inventory, how much cash you have tied up in unsold stock, whether you’re running low on certain products, and how inventory moves from one location to the next. 

With the right multiple warehouse management software, it’s easy to set up folders for every location and even subfolders for each aisle and bin. That way, when an item moves, your team can simply scan a barcode or QR code, drag the item from one subfolder to another, and indicate whether it’s moved locations within a warehouse, moved to a new one, consumed, or sold. 


Putting it all together

By labeling your inventory and using those labels to track each item’s every move, you’ll create a complete, end-to-end multiple location inventory management system. 

You can also enable key features like low stock alerts to let you know when a given warehouse is running out of a product. This is especially important for keeping track of your fastest-moving inventory–the products that sell quickly, bring in lots of profit, and enjoy high levels of customer demand. 

Related: Warehouse Management: What It Is and Why It Matters


Strategy 2: Focus on your most profitable best-sellers

If you’re feeling overwhelmed by establishing a multiple location inventory management strategy, start small with ABC classification. The ABC classification of inventory divides your stock into three categories:

  • Category A: 20% of stock; 70% of profits
  • Category B: 30% of stock; 25% of profits
  • Category C: 50% of stock; 5% of profits

The business sense behind this method is simple: Your most profitable inventory is your most vital, and you should do everything possible to never run out of it. Since it’s your highest revenue-generating inventory, it makes sense to practice the tightest inventory control on those items. 

So if you feel that your company doesn’t have the resources to manage every piece of inventory and every single warehouse perfectly, start by implementing a solid inventory management system for the few items that generate the most revenue. 

To boost profits and productivity, try new ways to increase sales or profits on those best-selling items. For example, you could move your Category A items to a warehouse closer to your customers, reducing shipping costs and wait times. Or, you could consider entering a contract for vendor-managed inventory, which could help you run an even tighter ship while creating efficiencies across your supply chain. 

Related: Different ways to categorize inventory


Strategy 3: Keep your records accurate

With the right multiple warehouse inventory management software, you can keep your data accurate and your records synced around the clock, even if you have employees working in multiple locations across different time zones. 

These employees, who can use smartphones to check items in and out and manage transfers between warehouses, aren’t just keeping your warehouses organized. They’re producing insightful records that your business can use for various purposes, like creating a balance sheet, forecasting demand, selling off inventory to a liquidator, deciding what sales or promotions to run, or searching for better deals from new suppliers. 

You can also use these records to pay taxes, claim depreciation, and conduct essential year-end inventory audits.  


Strategy 4: Reduce costs through strategic inventory management 

Finally, the fourth strategy for multiple warehouse inventory management is to reduce costs by properly utilizing key inventory management software features. 

For example, your company can protect profits by setting low stock alerts. After all, when you run out of items, you frustrate your customers and face having to buy replacement products at a higher cost. To avoid this, set notifications to stay on top of dwindling inventory levels, expiration dates, preventative maintenance, and warranty ends, too—especially for expensive equipment in your warehouse. 

You can also review regional usage patterns to determine what inventory needs to be stored where. Proper warehouse utilization can reduce shipping costs and speed up shipping times, boosting profits and customer satisfaction.

While reviewing these patterns, you might want to shop for new suppliers who are willing to ship to all of your locations, perhaps offering a volume discount while streamlining tedious accounting and receiving processes. 

You’ll also want to ask each and every warehouse to conduct a robust physical audit of all the inventory they have on hand at least once a year, if not more frequently. With the help of warehouse management software, these audits shouldn’t be too inconvenient, and having validated inventory records at your fingertips will save you time and stress when you order products, fulfill customer requests, or even file taxes.  

During these inventory counts, you’ll want to ask employees to keep an eye out for obsolescence, spoilage, and inventory loss—all of which can eat away at your company’s profits. If you notice unacceptable inventory loss, identify the problem and implement more focused training efforts and surveillance measures in the necessary locations. 

Related: How to reduce inventory shrinkage 

Experience the simplest inventory management software.

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About Sortly

Sortly is a top-rated inventory app perfect for inventory and asset tracking across multiple warehouses. With critical features like barcode and QR code scanning, low stock alerts, and customized reporting, there’s no better way to keep your warehouses organized with a full visual inventory—no matter how many items or locations you have.

Ready to see just how simple your warehouse inventory management can be? Try Sortly free for two weeks.