Inventory is frequently relocated from one location to another as online companies expand to meet demand.
Inventory movement happens across the e-commerce supply chain due to different fulfillment sites and sales channels, especially if you run a multichannel fulfillment operation.
However, coordinating inventory transfers between storage facilities is bound to overburden an inventory management team if not done correctly. And, while inventory transfers might help with storage and demand management, there are methods to prevent them for a more effective supply chain.
In this post, we will discuss what inventory transfers are, why they are appropriate, and how to perform a seamless transfer to prevent fulfillment delays.
Inventory Transfer Definition
An inventory transfer is the physical transfer of inventory from one location to another, whether it’s a rented warehouse, a distribution center, or a fulfillment center managed by a third-party logistics partner.
Most merchants use inventory transfers to increase on-hand inventory levels in high-demand locations, allowing orders to be optimized to reach customers faster and more economically.
In 5 easy steps, Learn How to Move Inventory
It’s not commonplace for e-commerce companies to distribute merchandise among various fulfillment centers in order to serve a wider geographical audience.
Even if you have two warehouses, you will almost certainly have to handle inventory transfers. Fortunately, it is a straightforward procedure that can be completed in five steps.
1. Prepare for the inventory transfer.
The first step is to determine when an inventory transfer makes the most sense.
Here are a few reasons:
- In a certain place, inventory levels are low or out of stock.
- A certain place is predicted to see an increase in demand.
- Inventory must be transferred in order to sell on a certain channel
- A warehouse shutdown, either temporary or permanent
After that, devote some time to inventory planning in order to determine the goods and quantities that must be despatched, the timeframe for the transfer, and the creation of an inventory transfer list.
Gather these facts into an inventory transfer request, and if necessary, have it approved by the inventory manager at the source warehouse.
2. Request for inventory transfer.
Once the transfer proposal has been authorized, you must send a formal transfer request to the destination warehouse’s inventory manager. If you rent a warehouse, you will almost certainly be in charge of determining what goods go where.
However, if you manage many warehouses, you very certainly work with a 3PL. A 3PL will already have a transfer request procedure in place for you to follow, so check in with them first to ensure you have all the essential documentation and information.
You must ensure that there is sufficient storage at the other site to satisfy your request.
Details to provide for a successful inventory transfer may vary depending on the kind of transfer:
- Data from the warehouse
- The warehouse of the final destination
- SKU numbers and item names
- Unit of measure (UOM)
- The quantities that must be transmitted
- Number of stock requests
3. Carry out the transfer.
The warehouse staff at the sending site will check if the products are available as soon as the transfer request is approved. The goods are then selected and their serial numbers are scanned with an inventory scanner.
The inventory units have been deleted from the transmitting warehouse’s inventory at this point.
The order is then packed and transported to its final destination by internal transportation, a shipping carrier, or a freight shipping partner.
Order tracking is also available to verify that products in route arrive on time.
4. Product receipt and storage.
The workers at the destination fulfillment center will need to cross-check if the delivered products match the details provided in the delivery slip during warehouse reception. This is characteristic of any warehouse receiving operation, whether it’s from a supplier or an internal inventory transfer.
When each item is scanned, a receipt is produced, and the things are appropriately put away, the transfer is complete.
The warehouse crew will store physical merchandise in bins, shelves, and racks according to an inventory storage method that meets your company’s demands.
You should be able to observe when inventory is stored and ready to be fulfilled if your inventory management system is linked to your warehouse management system.
5. Make sure to always double-check.
Inventory visibility is critical for a successful inventory transfer. Make certain you receive confirmation on the following:
- Did the materials arrive at the correct warehouse location?
- Was the correct amount transferred?
- Were any of the SKUs damaged in transit?
Tracking the movement and utilizing inventory management software to automate this process is the best approach to determine whether the inventory transfer was effective.
The Importance of Inventory Movement in the Fulfillment Process
When an order is placed, the best-case scenario is to have enough inventory at the location nearest to the consumer. This guarantees that purchases are transported in the quickest and most cost-effective way.
An agile supply chain is made possible by having various warehouse sites and the capacity to transport inventory. You can sell through many channels and develop into additional regions across the world while satisfying customer expectations for quick, low-cost shipping.
However, a company should never rely only on inventory transfers because the transfers themselves might cause delays in the fulfillment process.
Instead, you should ensure that you have insight into inventory movement across your network, as well as access to real-time inventory management analytics so that you can watch crucial inventory KPIs and allocate goods accordingly.
For example, if previous order data suggests that particular things are popular in a given market or sales channel, you would ensure that there is adequate stock available to match that demand in the first place.
Developing a planned distribution strategy lowers the risk of fulfillment delays, optimizes logistics costs, and guarantees that orders are completed and sent effectively.