If you don’t want your business to add up to the lost $1.75 trillion annually and affect 62% of business finances due to poor inventory management practices and tracking, then you must be looking for good inventory management practices.
And among others, how to maintain the inventory flow in your warehouse is one. How well you manage inventory in your warehouse and across other warehouses tells a lot about the cost you could save on stockouts and understocking.
In this blog, we are going to learn some tips on how to do a warehouse inventory transfer, whether it’s within the same warehouse or to another warehouse. So next time, you won’t get your head heated up about how to manage stocks, how to cut costs on frequent shipping, or how to prevent dead stock or stockouts.
Are we ready? Let’s go!
What is warehouse inventory transfer?
Let’s first start from the basics.
Warehouse inventory transfer is the practice of moving goods or stock from one part of your warehouse to another or from one warehouse to another. Businesses do this to maintain inventory levels and ensure stocks are managed effectively and fulfillment runs smoothly.
Why does a warehouse do an inventory transfer?
There could be multiple reasons. If you find your business in any of the situations below, do an inventory transfer ASAP.
1- Not having balanced inventory stocks
If your stocks are placed too far or too high so that every time you receive an order, you have to do long walks and hard lifting, then you need to reorganize your stocks and move fast movers to a location that is easier to access and ship from. Next, if one warehouse frequently faces stockouts while the other is overstocked, there is an imbalance. You should transfer the necessary amount of inventory stock to the other warehouse to maintain balance, ensuring both warehouses can operate smoothly.
2- There is a seasonal demand or a promotion
Suppose a holiday season is approaching and you are planning a promotion to boost sales. First, check if you have enough stock to meet the demand. If not, transfer some stock to the fulfillment center or warehouse where it is easier to ship orders and meet seasonal demand on time.
3- You are closing a warehouse
If you no longer need a warehouse in a specific location, you must transfer all your stock to the nearby warehouse that is still operating normally.
4- You have dead stock
If one of your warehouses has dead stock while others are operating normally, then you should transfer that stock to other warehouses where it can be used.
5- You want to cut costs and time on shipment
If your warehouse with the most stock is too far from the location where you get the most orders, then there is a need for change. To cut costs and save time on shipments, you should transfer enough stock to the warehouse near that location, making it easier to ship from.
Pre-transfer planning
The first step while you plan on transferring your stock to the other warehouse is;
Defining your transfer objective
Just like we discussed above. If you find your business in any of the above situations or any other situation that requires you to move your stocks from one place to another.
Suppose you are facing stockouts in one warehouse during a seasonal hike, and you want to transfer more from another warehouse to meet the demand.
The next step after you get your transfer objective is;
Auditing your current stock
Check if your available stocks can meet the demand for the specified period. If not, and you believe the other warehouse has a surplus of stock, then contact them for a stock transfer.
Now the third step is;
Counting SKUs and quantities that needed to be transferred
This can be done through physical counting or, if you have a system to manage the inventory, that’s great. Based on the need for stock, you made the sheet with SKUs and quantities needed and sent it over for the transfer.
Now,
Check storage capacity at the destination
You have identified the need for stock, but have you checked if you have enough storage to store those goods? If yes, move to the last step.
Create a transfer request in your WMS or ERP
If you have a centralized system or warehouse/inventory management software, then you can easily create a request for the transfer using that software. If you don’t have software in place, then things could get messy; you might face delays or high shipment costs too. Without software, you can send an email for the transfer and manually handle the whole process of creating a list and maintaining the stocks upon arrival, etc.
Step-by-Step Transfer Process
1- Create and Approve Transfer Order
The first step is to initiate the transfer process. For this, you will generate an order in your warehouse management software (WMS) or create a spreadsheet with all the details on the source, destination, SKUs, quantities, and planned ship date.
2- Pick, Pack, and Label
Now the next step is to pick the required stock, pack it safely, and label it carefully. If your products are delicate, then add the label to secure packaging to prevent damage.
On each box, add a label with the SKU, quantity, “From” location, and “To” location to prevent misplacement.
3- Ship and Track
After your stock is ready, the next step is to ship it to the destination. You can either use your in-house fleet or reliable third-party logistics (3PL) like FedEx or UPS Freight. Make sure to track the route using GPS or the carrier’s tracking portal.
4- Receive and Verify
Once shipped you will get the shipment in 1-5 days depending on your location.
Next step is to ;
- inspect the goods for damage or shortages.
- Match goods-in slip to transfer order
- And immediately scanning items into the destination WMS
Now that the data is updated and shared across warehouses or locations, congratulations, your transfer is completed promptly.
Post-transfer actions
After you receive the shipment at your location make sure to;
- Update system records & bin locations
- Perform a quick cycle count
- Log any discrepancies (damages, missing units)
If everything is in place, you can then analyze key metrics to keep the record straight and useful.
1- Check transfer lead time
How much time does it take for a shipment to arrive? And in case you need another transfer in the future, how many days in advance can you initiate the process to ensure the shipment arrives on time?
2- Accuracy rate
How well is the entire transfer being managed by the teams? Are there any discrepancies? If so, then how can we plan future transfers to ensure they go smoothly?
3- Transportation cost per unit
How much does it cost you to use either the in-house fleet or carrier service? And how can you cut costs or save time when making future transfers?
What are some of the best practices when doing warehouse inventory transfer?
- Schedule transfers during off-peak hours
This way, you can save money on shipments due to fewer deliveries. Plus, you can have enough time to store and manage the transferred inventory once it arrives in your warehouse during off-peak seasons.
- Group high-velocity SKUs together
That will help you manage the stocks more efficiently. Keep fast-moving stock near the packaging station once received to optimize the fulfillment process.
- Standardize packaging sizes and labeling to speed up packing
Try to keep the packaging standardized. This way, you don’t have to carry multiple boxes of different sizes. Additionally, use proper labeling to increase visibility.
- Train staff on transfer SOPs quarterly
Train your teams and staff for hassle-free transfers. Set SOPs and make sure everyone on the team follows them to prevent any packaging or labeling errors.
- Use a “sandbox” warehouse location (e.g., “In Transit”) for visibility
Try to improve visibility at every stage of the transfer. Keep labels clear and update the location on the software to stay organized once the shipment arrives.
End note
If you want your warehouse inventory transfer to go smoothly, invest in a reliable warehouse management software or an inventory management system that increases visibility at every step and keeps operations error-free.
