For many smaller and growing ecommerce businesses the world of warehouse management might seem like the dark side, something that only much larger companies need. But is that true and, whether it is or not, at what point in your business growth do the advantages of a systematic approach to managing your stock start to deliver tangible benefits? The chances are it will be sooner than you think.
If you are selling a small and finite number of items, you might not need a dedicated stock management solution. You buy what you need, when you need it, and send it to the customer when it is ordered. Perhaps you can remember all the information you need in your head. If not, you can probably use a few pieces of paper or a basic spreadsheet.
But things get complicated as soon as the amount of stock begins to grow. Psychologists have known for some time that we humans can only retain six or seven pieces of information in our short-term memory. We can, of course, remember far more in our long-term memory. Most of us struggle with those party games where we try to match pairs of cards that are face down on the table and only fleetingly revealed. Few of us ever master the tricks of the memory specialists seen on TV “magic” shows or the seemingly unending trivial knowledge of quiz champions. In practice, we pass information we want to retain – either consciously or unconsciously – from our short term to long term memory but that is not an ideal way of running a core business function. Some form of “memory aid” would be quite useful.
It is inevitable that your stock management requirements will become more complex as your business grows. What if those few items you are selling become ten, twenty, or a hundred? If you are selling items that are manufactured, require some form of adaptation, or are bought in bulk, you are much more likely to need to keep track of your stock. Where did it come from, how many do we have, where is it now, is it ready to sell, who has ordered it? Things like that. Suddenly, and without you doing very much, that is quite a lot of information to remember. Some form of “memory aid” will be quite useful. In other words, some form of stock management system.
There are other reasons why stock management can become complex. If you stock a lot of identical items, it might not be too important to identify each one at an individual level. But if you need to rotate stock so that the oldest items are sold first or if you need to ensure traceability through the supply chain then you will need to know and manage more about an item than its basic identity. Every time you add a new piece of information related to any specific item you increase the complexity. Statisticians call this the dimensionality of data. On a simplistic level the dimensionality is the number of different attributes associated with a set of data. But this can change and is rarely static. Some of your data will be fixed (its identity, for example), some will change as an item moves through the supply chain (its location, for example), while some will change depending on other factors (such as an item’s position in a picking queue or the customer’s name once it is sold). Sooner or later (by which we mean sooner) you will need help to store, identify, process, and manage that information. In other words, some form of stock management system.
This is where a proper warehouse management system comes in. It will be a “memory aid”, overseeing essential day-to-day stock management tasks and providing structured, consistent and accurate data. The system should be able to interface with your ecommerce applications to provide the stock information you need to sell items, link to carrier management systems to deliver items cost-effectively, and interface with back-office applications that can provide insights into efficiencies and cost savings to help with business development.
For many businesses, the most suitable solution will be a cloud-hosted, software-as-a-service solution. Solutions such as ProSKU are adaptable to current needs, scalable for business growth, easier and faster to deploy than traditional systems, available with simple and predictable pricing models, and future-proofed by ongoing developer upgrades.
By Alex Mills, Sales and Marketing Director at ProSKU