Storage, as it relates to inventory management is exactly what the name suggests—the way goods, components, and materials are stored in a warehouse before moving to the next step in a manufacturing process or awaiting purchase.

The way in which your inventory is stored will depend on several factors, such as budget, risk of spoilage, toxicity, weight, and dimensions. Not only this, but your method of inventory management will no doubt influence how your goods are stored in the warehouse.

Why Your Storage Method Is Important

It may go without saying that if you are a distributor of dairy products, it would be a good idea to store your inventory in a consistently cold environment. This will ensure your goods won’t spoil overnight.

Chemicals and other hazardous materials have their own set of storage requirements according to safety standards. Those might require the materials to be held in a specific container type, humidity level, behind locked entry or exit points, and various other safeguards.

These are examples you might consider to be generally obvious. However, the way in which you store your inventory can impact your operations significantly.

Don’t want to tuck away completed orders in a far corner of your facility if they’re to be shipped out the next day. Don’t mix unlike items in racks or bins. And don’t store items in out of reach places if you don’t have the means to retrieve them later easily. There’s a reason most goods are kept at a height that staff can reach with both feet on the ground–Safety. For everything else, there’s a forklift.

What I’m getting at is the idea that there is good reasoning for storing items one way or another depending on size, frequency of access, and other unique factors.

Sound storage methodology also makes it easier on your staff when the annual full physical inventory needs to be carried out or more frequent cycle counting. You can save yourself a lot of hassle by considering these activities when planning your inventory storage system.

How Warehouse Layout And Design Impact Storage

Initially, a business interested in better storage techniques for inventory management needs to complete a few crucial processes to maximize efficiency. Namely, how to the facility housing the inventory will be arranged and navigated.

First, it is important to have concrete objectives towards your organization’s goals for warehousing. This will govern your overall design strategy and serve as the foundation for how efficient your organization’s warehouse management is or is not. For example, for a new facility design process, an organization may:

  • Consult your local building codes to coincide with your design plans.
  • Consult department heads, managers, and staff who will conduct activities in the facility.
  • Consider investing in a Warehouse Management System (WMS)
  • Build a blueprint or schematic of the physical layout
  • Build a process map for day-to-day operations
  • Use the two items above to determine potential bottlenecks or production impediments
  • Consider additional schematics for future buildouts and expansions to accommodate future growth.

This, of course, is a rudimentary set of initial steps in the design process. There will be many more factors to consider and the steps will change from organization to organization as well as from new design to redesign of existing facilities. These steps serve to give a simple idea of where to begin.

Second, you need to know what moves. That is, your business needs to know exactly what inventory in your facility is utilized in production or sold most often. Using sales data, you can rank inventory based on volume and how often it is utilized. Use this information to work from the back to the front, with your most mobile inventory remaining at the forefront of your facility. Maintaining your most popular inventory in a position close to shipping and receiving minimizes time in retrieval.

Third, you should map your facility. By ensuring your staff knows where items reside and their current quantity at any given time, you minimize time wasted looking for lost, misplaced, or miscategorized inventory. This brings up another important topic, labelling. However, that inventory management concept is covered in-depth in our article on scanning, barcoding, lot tracking, and serial numbering.

How Businesses Use Storage To Manage Warehouse Inventory

We touched on a few obvious use cases for specific storage methods in the sections above, but there are many ways to control inventory so that it is neat, known, and nearby. Some of these concepts include:

Block Stacking – Block Stacking can be something as basic as pallets of inventory resting directly on the floor of your warehouse or other facilities. It’s a cheap method of storage as it doesn’t require any additional equipment to organize material, beyond perhaps a forklift. If you are stacking pallets on top of one another, you must be certain the items serving as the foundation can handle the weight of the goods to be placed above them.

One drawback of Block Stacking is that these pallets can expand into a sprawling maze of obstacles. If a forklift needs to retrieve or access a pallet at the center of the arrangement or bottom of a stack for one reason or another, it may take a significant amount of time to complete the task. The issues could be compounded if pallets contain mixed arrangements of goods or components. Your staff may have to sift through potentially hundreds of boxes to locate the correct parts for an assembly or customer order. This method of storage works best for any inventory that moves quickly, either through use or sales.

Racks – Racks serve as a storage method that delivers the support and convenience that Block Stacking lacks. You can arrange aisles in your warehouse that can be easily navigated by foot or forklift to retrieve items that are conveniently separated on rack shelves. Racks are part of complex and dynamic warehouse management methodologies like Last-In, First-Out, and First-In, First-Out.

Shelves and Bins – as their name implies, shelves and bins serve to be filled. They can be stationary, mobile, and modular depending on the use case. These inventory storage units can be placed on track systems that slide or act as carousels for easy access and eliminate the need to retrieve goods from multiple areas of a warehouse facility. That said, Shelf and Bin storage generally offers limited space to house items and works best with small quantities.

Central Storage – Central Storage refers to a fixed location for any inventory that operators and users can reliably reference and interact with when retrieving or storing inventory. It is a dedicated space, like a warehouse or facility partition reserved exclusively for inventory.

Point-of-Use Storage – Point-Of-Use Storage refers to storage practices utilized during repetitive production processes. Namely, those associated with Just-In-Time manufacturing. In this case, each operator’s or user’s station retains the inventory necessary to complete their specific operation or production activities. This storage method emerges when there is no need for dedicated, central storage.

Dry Storage – Dry Storage is a storage method used to maintain the environment around perishable or dry goods that would otherwise spoil when exposed to elevated temperatures, humidity, light, and generally unsanitary conditions. Beyond maintaining tight control on these environmental factors, it is important to label and secure goods in Dry Storage to prevent the effect of spoilage spreading to other inventory or inviting rodents and other pests into the facility.

Cold Storage – Cold Storage, like dry storage, is generally reserved for inventory whose environment needs to be heavily controlled. These controls are in place both for safety and to preserve inventory quality. Examples include freezers, refrigerators, and coolers that house produce, dairy products, beverages, and dough products.

Hazardous Materials Storage – Hazardous materials storage is a unique storage category with multiple levels of requirements that go well beyond what the standard facility may be expected to meet. Such items need to be labelled and handled appropriately or the facility will face steep fines and potential legal recourse. This includes conforming to the appropriate initial containment, secondary containment, and defined exposure safeguards. Some storage requirements you may encounter when working with hazardous chemicals include:

  • Storing like chemicals together and away from chemicals that might cause a reaction if mixed
  • All chemicals should be labelled and dated.
  • Flammable materials should be stored in approved, dedicated, flammable materials storage cabinet.
  • Liquids should be stored in unbreakable or double-contained packaging or storage cabinet should have the capacity to hold the contents if the container breaks.
  • No flames or hot work in or around inflammable/combustible storage area.
  • Respirator and skin covering requirements.

Consult the OSHA guidelines for hazardous chemicals storage to ensure compliance.

This covers some of the more prevalent storage methods relating to inventory management. For more information on Warehouse Management and Inventory Management relating to storage concepts, contact us using the link below.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


Businesses of every size contend with keeping the availability of materials, components, products in sync with their rate of production and customer demand. Finding the balance between these factors is, at a high level, the core concept of inventory management.

What Is Inventory Management?

As a business digs deeper into the specifics of inventory management, it will refine its goals. This includes all the additional details that make the process more efficient. Suffice to say, good inventory management goes beyond the weight, dimensions, quantity, and location of items.

At a foundational level, your business will need a system of categorization to manage inventory. This also requires a means of interacting with this system when adding, removing, and identifying items.

Your system may require software and interactive technologies. These technologies can include computers, barcoding hardware, and scanners.

Knowing what you have in inventory and where is only one part of the equation. Forecasting demand to inform a business of when to replenish stock or when to buy more materials to manufacture those products is just as essential.

By ensuring that warehouse space is used efficiently and in sync with the rate of sales and replenishment, the cost associated with goods held in inventory is kept to a minimum.

In a broader sense, Inventory management is the component of your business’ supply chain that keeps material flowing into and out of your facility.

This is kept in accordance with production processes and customer demand.

Suppliers may experience fluctuations in the ability to fulfill PO’s and global events may shake up availabilities across the board. However, you can keep your own house in order with inventory management best practices.

For example, keeping a detailed record of products as they enter and leave your warehouse provides visibility your business needs. This ensures you are able to deliver on customers and supply chain partners’ requirements at any given time.

Businesses of every size use inventory management principles to manage their flow of goods. However, there is no defined set of guidelines that all businesses can look to for the answers.

The best inventory management strategies will change from business to business, but generally accepted best practices can be applied in almost every case.

Identifying the right set of guidelines for your mode of operation will ensure you are able to deliver the right goods in the right quantities to your customers at the right place and time.

The Difference Between Inventory Management And Inventory Control

While these terms may seem the same at face value, they are generally not considered interchangeable.

A strong inventory management system ensures a business can source, store, and sell materials or finished goods in such a way that yields a consistent and dependable profit for the business overall. Good inventory management is a sustainable practice.

Inventory management follows a structure of thought as a business principal. It is an overarching set of concepts that address a larger business model.

Inventory Control is housed, pun-intended, within the larger concept of inventory management. Inventory control is focused on maintaining visibility and understanding of the materials and their flow. Namely, where and how much inventory can be found on-hand and readily accessed in a retail location, stockroom or warehouse.

Why Inventory Management Is Important

Global supply chains are complex and in a state of constant ebb and flow.

Manufacturing processes that utilize raw materials and components are also changing continually according to customer demand, specification, and regulatory requirements.

In short, what is available today may not be available tomorrow. However, there are usually indicators of when a supply shortage may be looming or new regulations will be coming into effect.

Keeping up with these constant changes is more than simply difficult, it’s outright unnerving and even chaotic at times. Being stuck with an abundance of stock that can’t be used, spoils, or becomes obsolete can cost a considerable amount of capital, running a business well into the red. This is where the balancing act of inventory management becomes so critical.

The costs of carrying goods can be considerable. For this reason, many organizations seek to refine and optimize their methods for ensuring they have just enough material on hand to deliver on anticipated production levels or sales.

Streamlining inventory management will keep inventory levels low, which keeps costs sunk into stock on-hand to a minimum. Furthermore, lower stock levels will ensure less space is required to match material requirements to production levels. With less space required, facilities can be kept to a more manageable size and minimize warehouse leasing costs.

How You Can Implement Best Practices

Fortunately, for many decades, businesses have been refining how they bring stability to the unpredictable world of global supply chains, manufacturing processes, and inventory management.

As part of those efforts, two major philosophies of inventory management have emerged as the most widely accepted and utilized: Just-In-Time (JIT) and Material Requirements Planning (MRP). Both instances have their benefits and drawbacks. We go into more detail in dedicated articles on JIT and MRP inventory management strategies.

Technology And Software

Beyond JIT and MRP inventory management, there are a number of technologies and software that make the process of managing inventory easier on businesses, staff, supply chains, and customers.

ERP software is one such technology that delivers all the critical data needed to inform demand forecasting and purchasing, whether a business is based in manufacturing or wholesale and distribution.

Inventory management data housed within the ERP system is accessed and reported digitally, while also easily sharable for key stakeholders and managers to use in their decision-making processes.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


Cycle Counting is an inventory management concept that focuses on auditing a warehouse’s inventory.

Cycle counting Objectives

The objective of a cycle count is to track and document inventory levels. While most warehouses will carry out a cycle count at least once a year, it is recommended to complete one more often. This process and its associated procedures ensure warehouse and production teams are working with accurate inventory data. Performing accurate cycle counts often will help maintain the accuracy of your data and the efficiency of your inventory management.

Cycle Counting Versus Full Physical Inventory

Cycle counting is a manual process and can be carried out at any time on specific groups of items and helps refine procedures for tracking and inventory management. The process is designed to be carried out without interrupting a facility’s operation.

Cycle counting benefits include:

  • Provides high levels of inventory accuracy
  • More accurate financial reporting
  • Considered less disruptive to operations when compared to a full physical inventory
  • Can focus on subsets of inventory and items based on specific criteria
  • A reduction in errors associated with bad data
  • Higher levels of customer satisfaction
  • Fewer inventory write-offs
  • Reduced losses due to inventory shrinkage

Cycle counting disadvantages:

  • Highly dependent on buy-in from company leadership down to warehouse staff
  • The process needs to be carried out at regular intervals

A full physical inventory is a complete physical count of a business’ entire inventory, most often carried out on an annual basis. The process is generally manual, time-intensive, and requires shipping and receiving operations to be shut down for the duration of the process. As a result, the full physical inventory process can be disruptive.

To minimize the disruption, businesses often attempt to schedule these procedures during a slow period, when inventory levels are low.

Full physical inventory benefits include:

  • Improved inventory accuracy
  • More accurate accounting records
  • Tax burden relief attributed to the record of losses
  • Control over inventory shrinkage

Full physical inventory disadvantages:

  • Shipping and receiving operations are ceased during the process
  • Time-consuming
  • Inconvenient for customers and supply chain partners
  • An expensive, non-revenue-generating activity
  • A high tendency for human error, resulting in bad data

Many companies complete annual physical inventories as a way of controlling their understanding of what’s in stock at any given time. However, performing a once a year activity to give that visibility leaves gaps.

For this reason, cycle counting is a preferred method of inventory management for businesses of every size. It is not uncommon for businesses to employ both a full physical inventory annually alongside incremental cycle counting throughout the year.

How To Complete A Cycle Count

Cycle counting garners appeal by offering an ongoing and easily achieved approach to inventory management. It is in maintaining the discipline of cycle counting that many organizations find issues.

It should be noted that every organization is different and a cycle count will be adjusted to fit each business’ method of operation. If your organization is interested in implementing a cycle counting program, it would be a good idea to consult a warehouse and inventory management professional. This way, you can avoid costly mistakes associated with trial and error.

Cycle counting involves a physical count of some sub-section of inventory located in a warehouse or other storage facility. It is recommended to complete a cycle count at least once a quarter.

These small cycle counts reveal discrepancies in data that can be logged and rectified within enterprise systems for accurate inventory management.

Here’s a general outline for what’s involved in a cycle count:

  1. Update your inventory records before carrying out a cycle count. You need a baseline from which to work.
  2. Determine the scope of your count. For example, a small cycle count will cover X amount of SKUs, while a larger count will cover XXX amount of SKUs. You could also choose to count items over a designated time period, such as the fiscal year.
  3. Decide which inventory to count first and item subsets to follow. Most businesses generally count their “A”-list products first. That is, the 20% of your inventory that makes up 80% of your inventory value.
  4. Determine the tools and equipment required to perform the cycle count. For example, if your inventory is barcoded, do you have handheld scanners available? If goods can’t be physically counted or handled, do you have a scale to weigh them?
  5. Decide who will perform the cycle count.
  6. Carry out the cycle count based on the details outlined in preparation.
  7. Review discrepancies between the cycle count results and warehouse records.
  8. Make the appropriate adjustments for incorrect data based on your baseline inventory record.

Cycle Counting Workshops

Encompass Solutions can train your staff to carry out Cycle Counts that Count through an educational workshop series led by our experienced inventory and warehouse management consultants.

Learn more about our Cycle Counting workshops HERE or contact us using the link below to speak with a representative.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


Every year, millions of workers brave the cold to perform year-end full physical inventories in the final weeks of the fiscal year – with mixed results. While this annual ritual is in many cases the only way to reconcile inventory variances incurred throughout the year, it doesn’t need to be. Enter the cycle count.

Cycle Counts That Count will help you implement better cycle counting on a daily, weekly, or monthly basis starting in April and let you potentially conduct your last ever year-end full physical inventory that same year. The final full physical will validate your efforts at daily counting and provide management with the data they need to determine when to switch to a cycle only inventory process.

Cycle Counts That Count Or…How I Learned To Stop Worrying About The Year-End Full Physical Inventory And Love The Cycle Count

An effectively implemented cycle count program can, within 9 months, effectively do away with conducting a full physical inventory. That’s right. You can free your organization from the dreaded yearly shutdown that pulls staff away from their families during the holiday season and closes your shipping doors for a week.

Now, what if we told you that our workshop would ensure you’d never have to perform another year-end full physical inventory, ever?

Contact Encompass today to set up your workshop and we can help you perform Cycle Counts that Count!

We can work with you to level work out over sessions that coincide with your low periods.

Cycle Count Project Management

Partner with your Encompass team to lay out a simple project for implementing daily or weekly cycle counting for your organization. The audience should include senior management, such as plant managers, the controller, or the executive team, as well as staff responsible for inventory control.

Our first workshop will review how a typical daily cycle counting program looks, how much time will be required to conduct daily counts, as well as case studies in efficiency gained by accurate inventory adjusted on a quicker basis. A series of planning documents will be provided and reviewed during this session which will create a custom-tailored implementation plan for your organization.

Our second workshop will include the same audience. The consultant will review your implementation plan with you and then provide training on setup, configuration, and daily processing of counts in Epicor. The goal of the session is to provide you with a simple roadmap you can follow to get the program up and running immediately for a small subset of product while you complete the implementation plan and ramp-up to include all products over the following 45 days. The session will be recorded to be used by staff for reference in the future.

Your First Count Workshop

We will schedule a follow-up session with our consultant and your finance and warehouse teams to work with you on setting up and processing your first cycle count.

Quarterly Reporting Workshop

We will then follow up with your inventory control team and workshop with your inventory control team to review your first 90 days of results, and help this team prepare their first cycle counting efficiency reports back for management.

End of the Year-End Workshop

In this workshop, your consultant will review best practices for a year-end full physical inventory and work with your team as they prepare to answer a critical question for management: Is this our last year-end inventory?

The agenda will include time to:

  • Review cycle count reports to determine how well parts are being counted based on ABC codes.
  • Review methods to identify problem parts based on recurring variances and suggest probable root causes.
  • Provide best practices for preparing for the full physical.
  • Provide suggestions for reconciling year-end results and evaluating the cycle counting program’s success for the year.

Encompass is ready to partner with you today. For more information, please speak to your consultant, Customer Account Manager (CAM) or our team at info@encompass-inc.com.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


What follows is part one of a multi-part blog post on selecting handheld mobile barcode scanners. Many questions, thoughts, and general discussions take place during the selection process. I will attempt to give you some overall guidance, but ultimately your decision should be based on your internal operations and preferences.

There are several key components to any mobile handheld scanner:

  • Imager Type
  • WiFi/Cellular Connection
  • Operating System (Windows Mobile or Android)
  • Working Conditions
  • Integrated Camera

Where To Begin Evaluating Barcode Scanners

Arguably the single most important component of barcode scanners (and why it’s listed first) is the imager type. You will need to know what the average scan range will be in order to determine a suitable scanner. For instance, if your operators will do close-up scanning (i.e. 1-5 feet) a standard range scanner will work fine in most cases. However, if you intend to have operators scanning from floor-level up to products on a higher shelf, consider an extended range imager. An extended range imager will be more expensive but able to perform both standard and extended range scans.

A close second criterion to evaluate is the ability for your imager to read 1D and 2D (QR codes) barcodes. If you decide (or your supplier decides) to start using QR codes, you will need to make sure to have 2D scanning capabilities. Most modern imagers accommodate 2D scanning, but it is something to note when shopping around. While we’re talking about 1D and 2D barcodes, it’s worth mentioning to always make sure your mobile handheld device supports a wide range of barcode symbologies. Symbologies are the different style of barcodes and are very important, but extremely technical and not suitable for discussion here. You can read more about the history of the barcode and symbologies here.

I’ll cover more aspects of the handheld in part two of this series….

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.