Inventory Management vs. Warehouse Management: What's the Difference?

Inventory management and warehouse management are commonly used terms in the manufacturing and distribution industry. While the two terms may seem interchangeable, there are a few key differences to consider.  First we will explain how they are the same and then explain a few differences between the two. Understanding the differences between these two terms is important to warehouse managers and business owners.  It's important because the type of materials management system you use to keep track of your inventory depends on a various amount of factors that can impact your company’s efficiency and profitability. Once you know the differences, you'll know if you're talking to an experienced consultant if they can talk the same language.  A word of caution, our field test have shown this topic is not the best way to be popular at social gatherings.   

How are Inventory and Warehouse Management Solutions the Same?

Before we discuss the differences between inventory management and warehouse management, let’s talk about the six similarities we've idnetified. Both inventory management solutions and warehouse management systems allow companies to:

1. Monitor product levels
2. Use barcoding devices to track parts and products as they move throughout the warehouse
3. Pick, pack, and ship items
4. Manage multiple locations
5. Receive orders into existing inventory
6. Cycle count

How are Inventory and Warehouse Management Solutions Different?

The most notable difference between inventory management solutions and warehouse management systems is their complexity. Inventory management systems take a simpler and broader approach by providing you with the total amount of inventory in one specific location, whereas warehouse management systems tend to be more complex and divide warehouses into multiple compartments and bins. This allows you to manage the entire storage system within the warehouse rather than one particular location. Warehouse management systems also allow you to find specific items in the warehouse while inventory management solutions simply inform you that they are somewhere in the warehouse. 

Inventory management is generally the first step taken in the warehouse management process. However, warehouse management is closely connected to other areas of company management whereas inventory management simply plays a part in warehouse management. In other words, warehouse management is crucial to the ongoing operations of other departments while inventory management is not.

Many companies integrate their inventory management solutions with their warehouse management software. This helps ensure that the entire warehouse is visible and properly managed. Stay tuned to our blog as we continue to discuss the importance of both inventory management solutions and warehouse management software. Both provide significant benefits and returns to manufacturing and distribution companies.

Are you using an inventory management solution? If so, do you also have a warehouse management solution in place? Let us know in the comments below. We’d love to hear how you are managing your warehouse processes!

Photo contribution by www.freedigitalphotos.net