Raw Material Warehouse Management- A Guide for Manufacturers

June 10, 2021

From raw material inventory management tips to learning about improving warehouse operations, there is a lot to absorb for manufacturers regarding the management of raw material warehouses. Proper storage and handling of raw materials is a must for better management, along with a plethora of other must-dos and tasks. Here’s taking a look at some key aspects. 

Raw material warehouses emphasize transportation, storage, distribution, and assembly of raw materials useful for manufacturing businesses. Material-based logistics are vital for each business, and hence it is important to set up good warehouse management practices for suitable management and storage alike. Furthermore, storing raw materials necessitates specific management attributes which every single warehouse does not possess. For instance, there are diverse and individually varying requirements of storage that should be tracked and understood likewise. 

It is important to understand proper store management and things like warehouse pallet shelves and other technologies. You should also step up your infrastructure by seeking warehouse racks for sale and other equipment. The best warehouses can readily accommodate various products in diverse sizes, shapes, and weights. These may encompass unprocessed material, raw material, partially finished items, individual ingredients and components, scraps, rejected ingredients/items, finished products, supplies, and packing materials. 

Key objectives of warehouse management will include lowering production costs and raw material prices while helping in optimizing production processes alongside. There should be good maintenance of finished products and raw material supplies. The work environment should be completely safe while keeping a focus on efficiency and overall productivity. 

Top tips for raw material warehouse management and best practices

  • Layout- A organized warehouse will be remarkably effective for the storage of components vital for business functioning. A proper layout will lower costs of storage and wastage along with enhancing overall productivity considerably in turn. Design aspects include categorized storage in fixed locations, random storage, material management, optimized and organized space usage, careful material supervision, streamlined handling of materials, and lowering and controlling obsolescence. 
  • Designed storage zone for raw materials- Maintaining an updated and accurate inventory is vital for the supply chain management. Warehouses focusing on natural materials should have sound inventory management systems for helping in tracking each component in the facility. Inventory balancing should be done regularly, organized and warehouses should tap into sales projections to estimate the number of units. This will help in working out the amount of material required for creating the same. Safety or backup stocks should also be maintained to solve quality issues, cover sudden increases in demand, and return mitigation. The projections should be figured based on aspects like changes in the market, seasonality, and other external factors instead of what has already been predicted. Warehouses may face scenarios where overstocked materials are witnessed owing to projections surpassing on-ground or real estimates. These changes may happen due to a slowdown in unit sales, hugely optimistic growth in sales, guesses, and other miscalculations. Under-stocking of materials is another issue that may hinder the whole supply chain. This may be caused owing to disruptions in the supply chain, under-forecasting of production, and issues related to transportation. 
  • Quality assurance and compliance- Quality traceability and assurance are vital aspects of proper supply chain management. Traceability is especially crucial when specific automotive components and electronics are being shipped out of the country in question; the receiving country may have guidelines for controlling raw material imports. However, quality rejections may lead to material shortage and increased costs due to expedited replacements via shipping. Therefore, ensuring the best compliance and quality is vital for smaller business entities. If there is no effective raw material management, costs and prices may increase considerably, particularly if production has to pause. 
  • Management based upon data- With complexities and global influences becoming commoner for contemporary supply chains, material handling management is a task that has become more extensive and technologically challenging. The frequency of orders has turned into a mainstream science owing to the advent of software solutions. Warehouses should have updated management systems with calculation software that is driven by data. The software helps optimize raw material warehousing while calculating and estimating fluctuations in inventory based on historical data, projections for sales, and confirmations of orders. Raw material warehouses may lower inventory costs by at least 25% or even higher with suitable software solutions in place. Keeping a closer track of inventory makes the difference as far as warehouses are concerned. Good software programs help in calculating both orders and forecasting together for combating shortages or sudden spikes alike. Contemporary software comes with analytics abilities and attributes of forecasting and planning in tandem with cost reduction, informed ordering, tracking material, projections of sales, and calculating inventory. 

These are some basic tips that manufacturers should keep in mind.