Product Storage and Distribution in e-Commerce: Overview

According to latest statistics, e-commerce is growing 23% year-over-year, and it means that there’s a constant need to optimize the product storage and distribution processes. Currently, there are several retail fulfillment methods, which help to manage these processes in e-commerce:

  1. Drop shipping. This method significantly shortens the journey of a product from a warehouse or distribution/fulfillment center to a customer. What is the secret of drop shipping efficiency? Actually, drop-shipping companies never keep their products in stock. Instead, they purchase the products from a supplier and then have them shipped directly to the customer. In other words, customers receive products right from the supplier’s warehouse or distribution center.
  2. Self-management. Unlike drop shipping, the self-management method requires that, after a purchase from a supplier, the merchant should keep the products in their warehouse and manage the inventory of these products. Such inventory management processes include counting, tracking, issuing, receiving, packing and shipping of the products, often with the help of specialized inventory management software.
  3. Third-party fulfillment services. The first two methods work great when you’re just starting off with your business. But when your company has grown to an extent when it becomes hard to manage the flow of products that you sell, hiring a third party could help a lot. How does it work? You find a logistics company that will store your products and manage the packing and shipping as well as other inventory processes.

No matter which method you’d prefer, proper inventory management is crucial for any business. With Delivrd inventory management software, you can process your orders and inventory operations in a quick, efficient, and hassle-free way.twitteryoutube

Fast Inventory Transactions in Delivrd

With Delivrd inventory management software, you can quickly update inventory for a specific product. To do it, open the Inventory List page under Products & Inventory and scan the barcode of the product on this page. If you don’t have a barcode scanner, you can manually enter the SKU, EAN, or UPC of the product in the field above the inventory list, and then click Search.

If the system finds a result, you can directly receive or issue 1 piece from inventory, or choose to receive or issue any quantity you want. You can do this with the four buttons in the Inventory Transactions column: +1, -1, Receive, or Issue.

Click the corresponding button to open a window where you can enter the transaction details. For the Receive and Issue transactions, you can enter any value in the quantity field, whereas for the +1 and -1 transactions, this field is not available for editing, as quantity of transaction is 1.

 

As always, any inventory transaction you enter into Delivrd will be displayed in the Inventory Transaction History

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Managing Inventory of Serial Numbers in Delivrd

In this user guide, we’ll describe how to manage the inventory of serial numbers in multiple locations, specifically, how to create, transfer, and issue serial numbers in Delivrd. Read on!

Creating a Serial Number
To start managing the inventory of serial numbers in Delivrd, you first need to create them. You can do it in several simple steps:

    1. In the navigation pane on the left, click Products & Inventory > Serial Numbers.

    1. In the upper-right corner of the serial number list, click New Serial.

  1. In the window that appears, choose the product for which you are creating the serial, and an inventory location for this serial.

After you choose a location, two things will happen:

    • The serial will be created in this inventory location.

  • A quantity of 1 piece will be added to inventory in this inventory location (there is no need to update the inventory separately).

Note: You can scan the barcode of your serial number into the serial number field instead of typing it.

Transferring a serial number to another location

To transfer a serial to another inventory location:

    1. On the inventory list page, scan the barcode of the serial. The inventory record of the product with the inventory location of the serial will appear. You can then either issue the serial or transfer the serial to another location. To choose the destination inventory location, click Transfer Serial

  1. In the window that appears, choose the location and add remarks, if necessary. When ready, click Save.

After you click Save, two things will happen:

  • Serial number location in serial inventory list will change to the new inventory location.
  • 1 piece will be deducted from the previous inventory location of the serial number (North inventory location in this example), and 1 piece will be added to the destination inventory location.

Issuing serial numbers

If the serial number no longer remains in any inventory location that is managed in Delivrd (for example, the serial is issued to sales order, returned to vendor, or scrapped), you can issue the serial number.

    1. After scanning the serial’s barcode label into the inventory location list search box, click Issue Serial.

  1. In the window that appears, you can add a remark to record the reason for the issue. When ready, click Save.

After you click Save, two things will happen:

  • The inventory will be deducted in 1 piece.

  • The serial will be marked as out of stock, but it will still appear in the serial numbers list.

If you try to search the inventory list for a serial that was already issued, you will get an error message:

That’s how you handle the inventory of serial numbers in Delivrd inventory management software.twitteryoutube

Delivrd Dashboard Layout

There is now a new Dashboard look which gives you more important information in one glance so you can manager you inventory better and more efficiently.

Sales Orders to Fulfill – These are orders that have been set to a Released status but still needs to be fulfilled for the customer.

Shipments Awaiting Pick-Up: The Pick and Pack step has been finished and the orders status has been set to Completed and is awaiting pickup by the delivery company for shipment to the customer.

Overdue Purchase Orders: These are orders that have not had their status changed to Released or the processing of the order has not been completed in the last 30 days and is overdue.

Inventory Alerts: Items that have reached their Reorder or Safety Stock levels and need to be replenished as soon as possible in order to continue conducting business in a timely and efficient manner without losing customers.twitteryoutube

Delivrd: Inventory Management

Inventory Alerts and Stock Monitor

Knowing when your product stock is running low is an key part of inventory management.

In Delivrd is now possible to view only the items that are below their Reorder or Safety Stock levels.

In the Dashboard page you can see the Inventory Alerts box. The number shown there represents the items that have reached their Reorder or Safety Stock levels and needs to be replenished or reordered as soon as possible.

For example, shown below are all the items that are in the system currently.

Note that there are four items showing that their stock is running low; highlighted in yellow and red.

This is reflected in the Dashboard under the Inventory Alerts box.

After clicking on the Inventory Alerts box you are taken to a new page showing the exact items that require your immediate attention.

You can now view all of your products that are running low or need to be reordered soon at a single glance!!!twitteryoutube

Fast Inventory Count

In Delivrd, the inventory management software, it is possible to manually update the inventory count directly from the Inventory List screen now, instead of going through the Actions button.

To update the quantity of a product after a manual count was carried out just click or tap (if you are using a mobile device) on the Quantity field for the said product.

After clicking or tapping you will be able to manual enter a value as shown below. A empty dialog box will appear awaiting your input.

After the correct value has been entered you need to press the “Enter” key on the keyboard either on the computer or mobile device. This is the only was the value will be saved. Clicking or tapping anywhere else on the screen will revert the value to its original value.

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How to Calculate Reorder Point

According to Wikipedia, a reorder point defines when to order, not how much to order. In other words, the reorder point informs you about the lowest stock level that your inventory should reach before you place a new order.

The appropriate reorder point is defined by the delivery time stock, which is the inventory that you need during the lead time, and the safety stock, which is the minimum inventory level acting as a protection against inventory shortages.

For more information regarding the reorder point and safety stock, see Reorder Point vs. Safety Stock: What’s the Difference? Meanwhile, in this post we’ll focus on the reorder point formula and how to calculate it.

So, here’s the reorder point calculation formula:

(Average Daily Unit Issues x Delivery Lead Time) + Safety Stock

Let’s take a closer look at each of these variables.

Average Daily Unit Issues

Average daily unit issues refer to the quantity of an item sold per day. You can define this variable by dividing the number of items sold during a month by the number of days in this month. For example, if you sold 650 T-shirts in January, your average daily unit issues would be 650/30 = 21.6 T-shirts a day. Please note that it’s not necessary to round to an even number.

Delivery Lead Time

Lead time is the amount of time in days that it takes from the time you order the stock until the time it arrives. You can derive this amount from your past replenishment orders, and it can be an approximate number. For example, it can be 7 days.

Safety Stock

Safety stock is a minimum amount of stock that you want to keep in your inventory, and you should define it yourself, considering such factors as delivery delays, seasonal demand, or damaged items. You can research your past replenishment orders to find out these factors. For example, it can be 30 items.

As a result, the calculation can be as follows:

(21.6 x 7) + 30 = 151.2

It means that your reorder point equals 151.2.

Wirh Delivrd inventory management software, you can easily set up both the safety stock and reorder point for your orders, so that the system can warn you when you reach these amounts.
For more information, see Reorder Point vs. Safety Stock: What’s the Difference?twitteryoutube

Picking by Order vs. Batch Picking: What’s the Difference?

There are actually many ways to pick an order from a warehouse location. However, in this article we’ll focus on two picking methods: picking by order and batch picking. You may already guess the difference from the names of these activities, but let’s explain in more detail.

Picking by order, or discrete picking, implies visiting a picking location individually per each order. For example, two customers order the T-shirts with the same SKU, and two different orders are created. As a result, when processing these orders, a warehouse employee should visit the picking location two times, to pick the T-shirts for two separate orders. This is the most common and straight-forward order picking method.

On the contrary, batch picking combines the lines from different orders into a so-called “wave” by using the inventory management software. As a result, the warehouse employee should visit the picking location only once, and it significantly saves time. After the picks of individual products is completed, products are sorted by order, packed and shipped.

Each picking method has its own advantages. Picking by order is simpler but it takes more time, whereas batch picking saves time, increases productivity, and reduces labor costs, but required two coordinated steps – pick and then sort.

You should choose the picking method based on your loads and workflow. For example, batch picking is perfect for you if the same SKU with relatively small dimensions is frequently ordered from you by different customers. In other cases it’s better to use the traditional method of picking by order. Despite the fact that it requires more time to pick, it actually speeds up the response time for order fulfillment.

Delivrd, the inventory management software, supports both picking methods to give the clients more convenience and flexibility. No matter how many orders you have, Delivrd will help you with any order profile. More details are coming soon!twitteryoutube

Barcode Scanning: A Key to Successful Inventory Management

If you stop and look around, you’ll probably notice that barcodes are everywhere. You can find barcode labels literally on every item that you use in your daily life, from food to gadgets. And it’s almost impossible to buy any item without a barcode. Barcodes rule the world! That’s why it’s important to understand how they work. Specifically, how they automate inventory management and thus help streamline the businesses.

A “toolbox” of a modern inventory manager should include not only the inventory management software, but also hardware, such as barcode scanners. Why? Let’s find out.

  1. Value for money. A barcode reader can significantly speed up the inventory management process at your warehouse. At the same time, such a device costs not that much. It’s easier and more cost effective to buy several barcode scanners than hire a hundred people to type in those SKUs and serials. Hey, it’s the 21st century out there!
  2. Speed. The faster you manage your inventory, the more efficient is your business. With a barcode reader, speed won’t impact the quality of your inventory management – it will actually improve it.
  3. No more errors. Barcode scanning reduces the “human factor” in inventory management and helps avoid mistakes, which can cost a lot. With barcode scanning, you’ll know the exact inventory numbers and avoid the low stock and overstock problems.
  4. Flexibility. There are many types of barcode readers, and you can choose the one that fits the needs of your company. There are standalone, USB, wireless, or smart scanners with an operating system; there are pen-type, laser, or camera-based readers – you name it!

Delivrd, the inventory management software, also supports barcode scanning. More details coming soon!twitteryoutube

Delivrd: Reorder Point vs. Safety Stock

Reorder Point vs. Safety Stock: What’s the Difference?

The concepts of reorder point and safety stock may be confused in Delivrd, so we’d like to explain the difference in this article.

Reorder Point vs. Safety Stock

Imagine that you work for a company that prints on T-shirts, and you have a supplier from which you regularly order “blank” T-shirts of different colors. Black and white medium-sized T-shirts are high sellers, as most people prefer their corporate logos, rock band names, or just funny pictures to be printed on black or white tees.
Let’s take a white medium-sized T-shirt as an example. Let’s suppose that you have 10 boxes of white medium-sized T-shirts in stock, with 100 tees per box, and would like to reorder them from your supplier when you have 5 boxes (500 tees) left. So, how to achieve this during inventory management in Delivrd?

  1. Click Products & Inventory > Products to view a list of your products. To learn how to create and import new product records, see Delivrd User Documentation.
  2. To the left of the needed product name, click Actions > Edit.
  3. On the General tab, in the UOM (Unit of Measure) drop-down list, select Box.
  4. In the Reorder Point field, enter 5.
  5. Click Save.

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As a result, you will get low inventory warnings when your inventory of white medium-sized T-shirts reaches 5 boxes. You can still take the T-shirts from the warehouse, but it’s a bad practice, which may result in reaching the safety stock limit.
Safety stock acts as a safety belt for your inventory. Issuing stock when it goes below safety stock levels is a poor inventory management practice and should be avoided whenever possible.
So, let’s suppose that you want to be alerted when their number reaches 2 boxes (200 T-shirts). In Delivrd, do the following:

  1. Click Products & Inventory > Products to view a list of your products. To learn how to create new products, see Delivrd User Documentation.
  2. To the left of the needed product name, click Actions > Edit.
  3. Click the Logistics tab.
  4. In the Safety Stock field, enter 2.
  5. Click Save.

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As a result, the inventory of white medium-sized T-shirts will no longer be issued when it reaches 2 boxes, and the inventory amounts will be marked with red for all transactions until you make a replenishment order. And, when you reach the reorder point, the inventory amounts will be marked with yellow. Here’s how it looks in Delivrd:

inventory-list-rp

And here’s how it’s reflected in transaction history:

transaction-history-rp

However, it’s up to you decide what to do when you reach the safety stock level. In case of reaching the reorder point, it’s clear that you need to reorder inventory by using the replenishment (purchase) order in Delivrd.

But in case of reaching the safety stock, you can either stop all issues or fulfill customer orders until the stock level is zero. You can use the safety stock only as a measure of accurate inventory management, as the stock should never get below the safety stock level.

An accurate reorder point means that you never get lower than your safety stock level, but a good safety stock level means that your quantity never hits zero while people are still willing to purchase the product.
Note: The figures in the example above are very approximate. Of course, you should make thorough calculations, estimations, and forecasts to determine the exact figures for reorder point and safety stock.

Calculating the Reorder Point

And now let’s involve some math and see how to calculate the reorder point. Please note that it’s possible to make such calculations only when you have a stable sales/purchase cycle. As for the reorder point, it’s calculated for each product individually. So, here’s the reorder point formula:

(Average Daily Unit Issues x Delivery Lead Time) + Safety Stock

where average daily unit sales means the average number of product units that are sold per day, and the average delivery lead time is a time period that is typically required for a specific product to arrive.

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