5 min read

ABC Inventory Analysis, Benefits & How to Use It?

October 28, 2022 by Malika Sanon - 5 min read

ABC Analysis, also known as Always Better Control Analysis, is one of the most commonly used inventory management methods. This analysis moves items into three groups (A, B, & C) based on their level of value in a business. 

ABC Analysis

Classifying inventory with ABC analysis helps businesses figure out their inventory, optimize their operations, and make smarter decisions. In this blog, we will understand the ABC analysis in-depth, explain how it can be used, and help you decide if that’s what you need for your business. 

Why Should You Use ABC Analysis in Inventory Management?

ABC analysis is the method of inventory management to store inventory into three main buckets. 

A Items: This is your inventory with the highest annual consumption value. It should be your highest priority and rarely, if ever, a stockout.

B Items: Inventory that sells regularly but less than A items. Often inventory costs more to hold than A items.

C Items: This is the rest of your inventory that doesn’t sell much, has the lowest inventory value, and makes up the bulk of your inventory cost.

Inventory categorisation is exceptionally essential for physical products because it protects your profit margins and also prevents you from losses. It is also the first step in reducing obsolete inventory, supply chain optimization, increasing prices, and forecasting demand.

The Pareto Principle & ABC Analysis

The Pareto principle, also known as the 80/20 rule, states that 80% of outputs are caused by 20% of inputs. 

The principle was discovered by Italian economist Vilfredo Pareto, who observed that 80% of the peas in his garden came from only 20% of the pods he planted. More significantly, he noticed a similar ratio when he realized that 80% of the land in Italy was owned by 20% of the population. 

After Pareto’s discovery, the principle changed how economics is studied and how we understand the distribution of the world’s resources. 

ABC inventory analysis is also based on the Pareto Principle, which means it’s often the case that about 20% of a company’s inventory accounts for 80% of its value. This helps leaders make more informed decisions. 

ABC analysis brings simplicity to inventory analysis by putting all of your stock into three buckets, enabling you to make well-informed decisions. 

What Are The Benefits Of ABC Inventory Analysis?


Accurate Demand Forecast

ABC analysis helps inventory planners predict demand for specific products and manage their inventory accordingly. This also minimizes keeping an obsolete inventory, helps create space for high-demand products, and also improves supply chain management.

Smooth Control Of High-Value Inventory

For most businesses’ a majority of their profits depend on A-class inventory. ABC analysis helps you identify those items in real-time, monitor their demand, and ensure they never go out of stock. By channelling your resources towards high-priority inventory, you can be assured you’re putting the odds of success in your favour.

Strategic Pricing

ABC analysis can optimize your pricing strategy for products that bring the most revenue to your business. Once you understand which products are in high demand, you can decide their price accordingly, which can significantly impact profits.

How To Use ABC Analysis for Inventory Management?

To apply ABC analysis to your business, follow these simple steps-

1. Classify The Inventory

Your inventory classification depends on the business you’re running and your company’s objectives. Your classification largely relies on the type of inventory you have in your business and the way your business operates. 

Any metric you use measures your inventory’s consumption value for a given period. Standard metrics are total sales, gross margin, purchasing, and holding costs. After calculating each item’s percentages, place them in your A, B, and C categories.

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2. Create Rules For Inventory Categories 

For all three categories (A, B, and C), we need to create rules or actions on how your classifications should function. 

3. Monitor & Look For Opportunities To Change Classes

Your classification mix will change as you grow and add items to your inventory. If you continue to monitor your analyses, you’ll start to notice patterns and forecast which inventory is most vital for you and which is least important. By always having the right inventory mix, your operations will run more efficiently, and cash flow nightmares will eventually be a thing of the past.

Shiprocket Fulfillment has fulfillment centers located in different cities across India. This means you can decentralize your inventory, store it closer to buyers, and save on shipping costs while providing one-day and two-day delivery. 

Not just this, the right technology stack, like warehouse management systems, order management systems, and logistics operations, enables your business to expedite deliveries. We are also equipped to reduce your order-to-ship time and meet the stringent requirements of marketplaces. 

Final Thoughts

Classifying inventory with ABC analysis will help you sort out your inventory and make more informed decisions. Inventory categorisation is essential for physical products and will protect your profit margins and save you from losses.

Scale Your Business The Smart Way
Oct 28, 2022 by Malika Sanon

5 min read

Just-In-Time Inventory Management: Advantages & Disadvantages

October 21, 2022 by Debarshi Chakrabarti - 5 min read

There are three inventory management techniques: pull, push, and just-in-time. Depending on the business requirements, a brand manufactures inventory based on customer demand, also known as the pull method. The push method is when a brand pushes out products based on expected demand.

Apart from these two methods, there is a third method, which is our focus in this blog – the just-in-time inventory management method.

Just-In-Time Inventory Management

What Is Just-In-Time (JIT)?

Just-In-Time or JIT is an inventory management method in which goods are received from suppliers only as and when they are needed. The main objective of this method is to reduce inventory holding costs and increase inventory turnover. Businesses use this method to reduce inventory waste, improve efficiency and have accurate demand planning.

Although the history of JIT traces back to Henry Ford, the American businessman who applied similar principles to manage inventory in the Ford automobile company during the early part of the 20th Century, the origins of JIT as a management strategy track down to Taiichi Ohno of the Toyota manufacturing company. 

He developed the just-in-time strategy as a means of competitive advantage during the post-World War II period in Japan.

Just-In-Time Management is also known as Lean Management, Cycle Time Management, Quick Response Manufacturing etc. However, while lean management is a customer-centric philosophy focusing on manufacturing and operations management, JIT has a more business-centric philosophy focused on the production process. Hence, businesses prefer it more as their go-to approach.

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How Does Just In Time Work?

JIT inventory management ensures that stock arrives as needed for production or to meet consumer demand, not earlier. The goal is to eliminate waste and increase the efficiency of business operations. 

Since the main objective is often quality and not the lowest price, JIT requires long-term contracts with reliable suppliers.

In JIT, the parts of the production or service system are interconnected. These systems exchange information and are mutually dependent on generating successful outcomes. It is a continuous improvement process aiming to streamline the business strategy.

For a successful just-in-time model, a business needs the following:

  • Steady & consistent production
  • Reliable material suppliers
  • Quality systems that work without any fail
  • AI-driven accurate demand forecasting 

Due to this type of inventory management, businesses require robust network connectivity along with Artificial Intelligence, machine learning, Internet of Things, cloud ERPs, and blockchain technologies to share and analyse data in real-time and make smarter decisions.

Just In Time Process

Just-In-Time – A Continuous Improvement Strategy

Since the just-in-time process aims to reduce waste and improve quality, the strategy goes through an 8-step cyclic process for continuous improvement.

  1. Design: The JIT process begins with a review of the product design, process design, personnel and manufacturing planning to eliminate disruptions, minimise waste & build a flexible system.
  2. Manage: A Total Quality Management (TQM) review ensures there is continuous improvement throughout the process. 
  3. Pull: The amount and time of material flow are determined by the rate and time of the actual stock consumption. A scheduling system is used for this process. 
  4. Establish: Relationship management is critical in the JIT process. Review your supplier lists. Negotiate contracts, and discuss lead times, delivery expectations and business requirements
  5. Fine-tune: Determine your inventory needs, brush up on the fine details of policies, and reduce unnecessary inventory movements.
  6. Build: Inform your team about the skills and capabilities it needs to complete its work and conduct team education and empowerment sessions to educate them. If your business uses automation, ensure the systems are capable of the work required.
  7. Refine: Reduce the number of steps in production by refining, standardising and reviewing the entire process.
  8. Review: Define and implement quality measures and metrics and conduct a root cause analysis of any problems. Emphasise improvements and track trends to improve every aspect of JIT.
Advantages Of Just In Time

Advantages Of Just-In-Time Inventory Management

Just-In-Time inventory management has several advantages.  It aims to boost a business’s ROI by reducing waste, increasing efficiency and lowering inventory carrying costs. 

Some of its other advantages are as follows:

  • Gives the manufacturer more control over the manufacturing process.
  • Decreases warehouse holding costs and reduces labour costs.
  • Reduces obsolete inventory, dead stock & defective product loss. 
  • Raises inventory turnover ratio and improves local sourcing.
  • Minimises raw materials on hand and inventory obsolescence.
  • Greater productivity with faster product turnaround with shorter production flow.

Disadvantages Of Just-In-Time Inventory Management

Although JIT has several advantages, there are some disadvantages of the same. The following are the drawbacks of JIT:

  • Any disruption in the supply chain can halt the entire production process.
  • With no finished goods in hand, businesses cannot address a sudden order surge.
  • Shortages and stockouts can disrupt inventory systems.
  • There could be forecasting flaws leading to disastrous outcomes.
  • Excessive supplier dependence can disrupt the entire supply chain in case of material delivery failure.

Factors To Consider Before Implementing Just In Time

JIT inventory management is not for every business. Every business has its own unique requirements and implements inventory management processes accordingly. Here are six factors to consider before opting for just-in-time inventory management.

  • Turnaround Time: Ask if your products can be supplied or manufactured quickly if needed.
  • Demand Forecasting: Consider if your business has accurate demand forecasting, even during festive seasons.
  • Flexibility: Ensure that your supply chain is flexible enough to adapt to disruptions like supplier drawbacks & natural calamities.
  • Distributors: Cross-check if your vendors & distributors are reliable and if your order fulfillment system is efficient enough.
  • Workforce: Check if you have multi-functional, cross-trained employees to perform several duties so team members can fill in when and where needed in the production line cell.
  • Technology: Check if your business uses inventory management software that supports the JIT inventory system.


Just-In-Time inventory management is helpful for businesses to manage production and fulfill orders efficiently. They find it beneficial because it reduces waste and helps maintain a positive cash flow. However, there are downfalls to the same. Now that you have an overview of JIT, you can make an informed decision about your business.

Scale Your Business The Smart Way
Oct 21, 2022 by Debarshi Chakrabarti

5 min read

What is FIFO(First In First Out) Method of Inventory Valuation

October 19, 2022 by Rashi Sood - 5 min read

Running an online business is not easy. You need to manage a lot of things, from providing excellent customer service to shipping orders on time. In all this chaos, inventory management is one thing that most sellers generally don’t give much thought to. While offering premium customer service and delivering orders on time is crucial, managing inventory and ensuring that you always have enough inventory to meet customers’ demands are vital.


And when it comes to maintaining accurate inventory records, keeping track of fluctuating inventory value is essential. One of the most common methods to ensure inventory records are accurate is the FIFO – First In, First Out method. This method suggests the oldest inventory is sold first, and the inventory value is calculated accordingly.

Read on to learn more about FIFO and its benefits and disadvantages.

What is the FIFO Method?

FIFO (First In, First Out) is an inventory valuation method that implies that the goods purchased first are sold first. Simply put, the oldest inventory is sold and shipped to customers before the newer ones. To calculate the cost of ending inventory, the cost of the products sold from the oldest inventory is used.

Inventory is an asset for eCommerce businesses. The cost of goods sold at the end of an accounting year helps determine the inventory write-offs, the closing inventory, and the impact on the balance sheet. With the FIFO method, the old goods are sold first and thus, the ending inventory can be of greater value since the goods’ value keeps fluctuating.

The FIFO method is essentially beneficial for perishable goods, has a shorter shelf-life, and gets obsolete quickly. However, using the FIFO method to calculate inventory valuation can sometimes create discrepancies if the cost of goods sold increases considerably.


LIFO, or last in, first out, is the method where the goods purchased later are sold first. The most recently purchased inventory is sold first. This method is not very famous and is only used in US-based businesses. On the other hand, FIFO is the most used inventory valuation method, even accepted by IFRS regulations. While you can record the original COGS in the income statement with, you have to record the most recent inventory costs with LIFO.

With LIFO, the cost of goods sold is generally higher as the most recent inventory cost is used. Thus, the profits are decreased, leading to lower income tax. Therefore, the government is not in favor of the LIFO method. Therefore, compared to LIFO, FIFO is a more accurate and transparent method for inventory valuation.

Advantages of FIFO

Here are some points why the FIFO method is most preferred:

  • The FIFO method is universally accepted. It is easy to understand and provides accurate values.
  • FIFO is based on the natural flow of inventory – sell the old products first and account for their costs first. This eliminates the chances of mistakes. Plus, there is less waste in terms of obsolete inventory as the oldest inventory is moved first.
  • A business that follows the FIFO method will have access to better market value. This is because the inventory that it holds is new, and the value is recent as well.
  • As discussed, FIFO method lead to higher profits. Also, with the FIFO method, it becomes challenging to manipulate financial records. Thus, you have an accurate and up-to-date picture of your finances, and you can plan your business’ future accordingly.

Disadvantages of FIFO

With the FIFO method, you can have higher profits, which also means higher income tax. You also need to be careful in terms of not overstating the profits. This can happen when the product’s costs rise, and these numbers are used to calculate the COGS. 

How FIFO Method Impacts Financial Statements

Let us now have a look at how using the FIFO method will impact your financial statements:

Inventory Valuation

By using the FIFO method to calculate inventory valuation, you show a recent value of your inventory. The current costs for manufacturing and acquiring inventory are also recorded in the financial records. Therefore, your financial records have the latest market inventory value.

Poor Match Between Revenue & Expense

Since the oldest products are sold first, the selling cost is matches with the outdated cost. Thus, there is a poor match between revenue and expense.

Leave Your Inventory Management to Shiprocket Fulfillment

You can leave your inventory management to us and focus on selling your products like a pro! Shiprocket fulfillment has 45+ fulfillment centers across India where you can store your inventory and save on shipping costs by storing inventory close to your buyers. Not just this, you also get access to the latest warehouse management systems and order management systems to scale your business to the new heights. Offer your customers one-day and two-day delivery options and become their favourite brand! Get started today.

Shiprocket Fulfillment
Oct 19, 2022 by Rashi Sood

4 min read

Goods in Transit 101: How to Account for In-Transit Inventory?

October 12, 2022 by Rashi Sood - 4 min read

A well-managed inventory flow is key to an efficient supply chain. Without it, it becomes difficult to understand how much and when inventory is required to keep your business running. Other important decisions, like where to store inventory, also depend on a well-managed inventory flow.

goods in transit

It is comparatively easier to account for your purchased and received inventory. But what about the stock that is in transit? To get a holistic picture of your inventory in hand, it is crucial that you also account for the inventory that you have purchased and is in transit.

To simplify things, we will talk about goods in transit and how you can account for them.

What are Goods in Transit?

Goods purchased, shipped by the seller, and yet to reach the buyer are called goods in transit. Often, this inventory goes unnoticed while accounting for the inventory as it is not present at the seller’s place or warehouse in physical form. 

Who Owns Goods in Transit?

The terms of sale decide the ownership of the inventory in transit. If the buyer is the inventory owner, he is liable to arrange the shipping of the goods. Accordingly, when the seller is responsible for the shipment, he is the owner of goods in transit.

In straightforward terms, if the sale of goods takes place only when the goods reach their destination, the ownership stays with the seller. Thus, the sale or purchase is not recorded in the books until the goods reach their destination, i.e., to the buyer.

Alternatively, the title is passed on to the buyer if the sale occurs before the goods are shipped. So, in case the buyer arranges for the shipment, the sale and purchase are immediately recorded in the books.

Accounting for In-Transit Goods

goods in transit

The ownership of goods plays a vital role in deciding the accounting for transit goods. If the title is not passed to the buyer, no sale or purchase has been made. Thus, the inventory is still included in the seller’s ending inventory.

However, if the title is passed, the seller records the sale in his books along with a receivable or cash. He doesn’t include the sold items in his ending inventory. Similarly, the buyer records the payable in his books and consists of the goods purchased in the ending inventory against it.

Insuring In-Transit Goods: A Good Idea?

Insuring in-transit goods can help reduce accidental risks. Even if you haven’t made the sale in your books, any problem during transit, like goods misplacement, shipping damages, or even slowdowns, might leave you in a jeopardized situation. It helps to have a contingency plan in place.

You can get your in-transit goods insured against natural disasters, theft, accidents, derailing when shipping by train, and sinking when shipping by sea. The goods’ owner will get appropriate insurance coverage depending on the sale terms.

Role of a 3PL Service Provider

When a business is in its growing stage, sometimes it becomes challenging to manage inventory. Here, 3PL service providers like Shiprocket Fulfillment can be the best go-to option. They not just help manage inventory but also pick, pack, and ship orders on your behalf. With their expertise, they can process orders with utmost accuracy and decrease shipping errors.

With a 3PL service provider, you can store your inventory in multiple fulfillment centers across the country and deliver orders the same or the next day. You also get access to the latest logistics solutions that help decrease shipping costs by a substantial margin and lower weight discrepancies.

Final Thoughts

When it comes to maintaining an effective supply chain process, taking your in-transit inventory into account is critical. You can also partner with 3PL providers like Shiprocket Fulfillment to distribute your inventory in different fulfillment centers across the country. This will reduce the in-transit time, associated risks and shipping costs.

Shiprocket Fulfillment
Oct 12, 2022 by Rashi Sood

8 min read

Inventory Analysis Methods and Tools for Inventory Management

October 7, 2022 by Aayushi Sharawat - 8 min read

The success of your ecommerce business is inextricably linked to inventory management. If your inventory management is not done correctly, you may encounter product stockouts or have too much capital invested in your SKUs. However, there are numerous advantages when your inventory management system incorporates inventory analysis.

inventory analysis

Inventory analysis helps ensure you have the right amount of inventory on hand, lowers operational costs, and encourages more accurate demand forecasting. You’ll have a better grasp on your stock count and general operating efficiency by optimizing inventory management using inventory analysis metrics.

What is Inventory Analysis?

Inventory analysis looks at inventory levels to determine how much inventory your business should stock. With comprehensive inventory analysis, you can learn helpful information about your inventory’s profitability and find it easier to adjust to changes in buyer demand. Additionally, inventory analysis is crucial for both increasing sales and reducing expenditures. This is because these calculations reveal product patterns to aid in lowering stockouts, increasing fulfillment, and enhancing supply chain management.

Need for Inventory Analysis 

Regular inventory analysis can improve efficiency and keep your inventory management on track. A robust inventory analysis can provide many advantages, including always having enough inventory, accurate demand forecasts, less capital invested in stock, and a more efficient supply chain.

Always Have Enough Inventory

An inventory analysis approach focuses on various product identifiers, such as those in demand, essential, scarce, and so on, required to maintain the correct products and their quantities on your warehouse shelves. Your e-commerce business can use stock analysis to make sure it has just the right amount of inventory on hand to prevent stockout or overstock situations.

Accurately Forecast Inventory

Deadstock frequently results from incorrect inventory forecasting, which is why having an inventory analysis system in place is essential. A reliable inventory analysis and reporting method will track all your SKUs, enhancing forecasting and reordering accuracy. 

Tie Up Less Capital In Inventory

Thinking of cash flow, it’s normal for retailers and manufacturers to have a significant portion of their money locked up in inventories. Fortunately, your company may gain a solid understanding of its lead times (as well as consumer demand) through effective inventory research. As a result, you can plan better with safety stock or cease purchasing inventory that doesn’t sell. Less surplus or stale inventory means lower carrying costs and less space taken up by the goods.

Streamline Your Supply Chain

Inventory analysis is essential to supply chain optimization since it can help you switch to single sourcing or combine suppliers (to reduce overhead and simplify your operations). Additionally, inventory analysis provides insight into the product life cycle (launch, growth, maturity, etc.), which is crucial for supply chain productivity and maintaining appropriate stock levels.

Common Inventory Analysis Methods

inventory analysis

There are various inventory analysis techniques that you can use, depending on the type of business you run and the inventory you carry. The most well-known and frequently applied methodologies are ABC, HML, VED, and SDE analysis; each has specific functions and benefits.

ABC (Value Analysis)

The ABC, or “Always Better Control,” method is among the most widely used techniques for inventory analysis. Retailers can categorize their inventory using ABC analysis based on the consumption value of each item and how it affects annual inventory expenditures. The ABC method classifies products into one of three groups:

  • A-inventory: The items that contribute the most to revenue and are the most valued.
  • B-inventory: Commodities that fall between the most and least valuable products, or “interclass” goods.
  • C-inventory: Consider the few transactions essential to overall profit margins but whose average cost has little bearing on a person-to-person basis.

ABC analysis enables you to devote more time and attention to your most crucial inventory, increasing sales and assisting in cost management. Using an ABC approach can also decrease the number of dead stock.

HML (Unit Price Analysis)

Inventory is categorized or measured using HML analysis based on cost per item (per piece). Additionally, three categories are used in this sort of inventory management study to group products:

  • High Cost: high value item per unit.
  • Medium Cost: item has a medium unit value.
  • Low Cost: low item value per unit. 

You will set up the upper and lower limits for each category, which are always listed in descending order of unit value.

HML is very helpful for cost control and maintaining budgets, even though it only considers an item’s unit pricing or, in other words, does not consider each item’s sales value.

VED (Functional Analysis)

Inventory value, or the value of having an item in stock, is the foundation for VED analysis. VED, in contrast to ABC analysis, considers how essential a particular thing is to the running of your organization. Manufacturing businesses that probably stock a wide range of different components and parts frequently adopt the VED technique. Three categories are generally used to categorize VED inventory:

  • Important inventory that must be available readily.
  • Minimum quantities of these things are sufficient.
  • Stocking these items is not required.

A VED analysis is performed with this classification in mind to ascertain the genuine requirement of a product and its impact on production and other operational services.

SDE (Scarcity Analysis)

The SDE inventory analysis approach is based on how quickly your business can obtain the products it needs or how scarce an item is in the market. In this manner, SDE analysis examines the inventory on hand and assigns each item or SKU a level of supply scarcity.

SDE analysis also incorporates three divisions of inventory:

  • Limited Supply: imported goods with protracted lead periods.
  • Difficult items have a lead time between a few weeks and six months.
  • Easily accessible: things that are easier to obtain. 

Companies that use the SDE approach frequently work with raw materials or similar items in their business.

Inventory Analytics Tools That Save Time & Money

inventory analysis

Only a select fraction of the inventory management and inventory analysis systems available today have the features and potential that set them apart from the competition. Some top management solutions for modern, product-based enterprises include Skubana, SkuVault, Daasity, Inventory Planner, and Shopify POS.


An all-in-one e-commerce operations tool called Skubana helps companies synchronize their inventory data and analysis across sales channels, warehouses, third-party logistics providers, point-of-sale systems, purchase orders, and other systems. The sophisticated automation offered by Skubana for inventory tracking and reporting reduces storage expenses, eliminates dead stock, prevents stockouts, and even maintains balanced inventory turnover ratios. Additionally, your business may better schedule sales orders for raw materials by using real-time data analysis, which prevents stockouts and backorder inventory.


Ecommerce businesses can benefit from a top-notch inventory control system that accurately fulfills customer orders and spots any potential problems during the order fulfillment process when SkuVault and Skubana collaborate. SkuVault employs robust integrations and straightforward workflows to connect all of your channels, position your warehouses, and manage your inventory. Your business may access crucial inventory data and analytics using the SkuVault system to create thorough reports and ensure you never oversell or run out of any product.


The inventory data analytics in Daasity’s software are renowned for being simple to understand and translate into actual outcomes because they have been created for non-technical users. When using Daasity, your online business will feel empowered to go beyond simple reporting and use holistic sales data (broken down into individual channels). When Daasity and Skubana work together, your business can compile all of its analytics into one comprehensive picture, allowing you to discover insightful data that will help promote strategic, lucrative, and sustainable growth.

Inventory Planner

Inventory Planner, a pioneer in inventory management and demand forecasting, has automatic replenishment suggestions built to streamline the buying process. This technology is excellent for overcoming forecasting difficulties since it allows businesses to use up-to-date information from inventory analyses (based on their sales trends and vendor lead times). Your business may submit purchase orders directly to suppliers by utilizing Inventory Planner in conjunction with Skubana. It can also track pending orders and expected delivery dates and display its inventory requirements in one location.

Shopify POS

With the aid of Shopify POS, current Shopify users may create POs and transfer goods based on predicted inventory levels and past performance. Businesses can track incoming and outgoing inventory using this software, move goods between locations, and (on specific plans) do ABC inventory analysis to identify high-priority items. To further improve their online stores, e-commerce merchants can also integrate Skubana with Shopify. You can control inventory information from your Shopify account and sync everything in a single system through this union.


If you want to stay ahead of the competition and provide your customers with the desired experience, inventory management is essential whether you’re a physical store, ecommerce business, or multichannel company. You won’t succeed without inventory analysis.

Choose an e-commerce platform that enables you to integrate your store’s inventory management across all channels, or opt for inventory software that masters the fundamentals of inventory management and serves as a driver for your growth.

Oct 7, 2022 by Aayushi Sharawat

7 min read

Warehouse Management Software vs. Inventory Management – Which One Do You Need?

October 6, 2022 by Danish Khan - 7 min read

warehouse management

Several factors and departments contribute to the success of a business or a company. You have accounting, business development, sales, public relations and marketing, among other essential departments in running a business. 

There are also aspects of running a business that business people often overlook. One that not a lot of businesses think about is warehouse and inventory management. It’s no wonder inventory is only 63% accurate on average, causing many problems for businesses.

Warehouse and Inventory Management in the Digital Age

Warehouse and inventory management plays a crucial role in business growth in today’s day and age. The terms inventory management and warehouse inventory management are frequently misused and confused in the logistics sector. Despite the fact that both inventory management and warehouse management are crucial for keeping track of and managing stock, they differ in a number of ways. 

Warehouse management is restricted to keeping an eye on the stock in a warehouse or storage facility and does not cover the entire business, whereas inventory management operates on a much larger scale. Both of them may refer to the management techniques a company employs to distribute its goods.

Before determining which one to use for your business, let us look at the benefits of using either of the two management systems.

Benefits of Digitizing Your Warehouse and Inventory Management

Digitalization of warehouses

Digitizing your warehouse inventory management or using an inventory management system will definitely make your business more productive and profitable. Here are some of the benefits of digitizing your warehouse and inventory management.

Optimize logistics costs

The process of organizing and carrying out the effective storage and transportation of goods from the place of origin to the point of utilization is known as logistics. Providing timely and cost-effective customer service is the aim of logistics. When you digitize your warehouse and inventory management, you can lessen the cost without negatively affecting the quality of your logistics department. 

Having pre-shipment inspections is a mark of having effective logistics operations. It describes the procedures used by sellers to examine recently produced or sourced goods before they are shipped to the final client. When you digitize your warehouse and inventory management, you check the quality of the products, and the quantity of the goods, find any defects in the pieces, ensure that the safety requirements are met, and look for any inconsistencies in billing with lesser time but greater accuracy.

Lesser errors

Given that some manual labor is involved, it can be challenging. This is a major reason why digitizing your warehouse and inventory management is very important. While it is expected that there will be errors in our processes, if you want to increase customer satisfaction, you should aim to lessen or even eliminate errors in delivering your products and services to your customers. 

Order accuracy refers to the number of orders you completed and accurately shipped to the customer’s door. Given that it is directly related to the customer experience, it is a crucial metric to monitor. 

Faster service for clients

When you digitize your warehouse and inventory management, you are definitely managing inventory the smart way. The effect of managing your inventory in a smart way is bringing faster service for clients, which often ends in higher customer satisfaction. This is a simple picture of how warehouse and inventory management affects sales and customer experience. 

And if you pair it up with Pipedrive, a sales and CRM platform that assists sales teams in better managing their sales pipelines, you can guarantee that your clients experience the highest possible quality of service you can offer. 

What is Warehouse Management Software?

Software that controls daily warehouse operations is known as a warehouse management system. A stand-alone program or warehouse management software can offer the best solutions for enhancing output, reducing costs, and ensuring customer satisfaction. When spreadsheets are unable to manage replenishment and fulfillment tasks, businesses turn to a warehouse management solution. A WMS is used by managers to define or standardize picking, packing, and shipping tasks as well as obtain detailed information on stock levels. The system tracks the delivery of goods to customers from the warehouse.

Key Features of Warehouse Management Software

Some of the key features of a warehouse management system are the following:

  • Records and keeps an eye on the inventory that is present in a warehouse or storage space. With a warehouse management system, you get to see more specific details of your product’s inventory like size, color, location, expiration, arrival, etc. 
  • Evaluates profitability, product cost, production movement, and sales trends. The best warehouse management system can also provide the data and analytics of your whole inventory because it involves a specific warehouse. It can provide you the correct information for better decision-making. 

When You’ll Need Warehouse Management Software

You will be needing a warehouse management system if you want to improve your business process and scale your company. When you have growing demand, you need to grow your supply and it follows that you need a better system to check the condition of your products. 

The best warehouse management system equips companies with the resources they need to remain legally compliant and competitive. Real-time data recording and tracking, improved business intelligence, and business process automation tools are used to achieve this. Not only can the right warehouse management system help you sell more, but it can also help you sell to happier customers more quickly and accurately.

What is Inventory Management Software?

Software that controls the delivery system and supply chain is known as an inventory management system. It is a group of procedures that handle inventory management, demand forecasting, supply chain management, and reverse logistics. In most cases, it comes before warehouse management. 

An inventory management system is used by businesses to manage finished products for retail and manage raw materials for manufacturing. Stock level, economic ordering volume, price of goods, stock turnover, consumer-managed inventory, and vendor-managed inventory are some of the tools used in inventory management.

Key Features of Inventory Management Software

Some of the key features of inventory management system are the following:

  • Tracks and monitors a company’s overall inventory or stock. It gives you an overall view of your company’s overall inventory. 
  • Gives you the raw computation of profitability, inventory costs, production trends, and sales trends. An inventory management system provides you with a current and updated condition of all your inventory. 
  • Aids in focusing on completing orders by keeping track of inventory levels. Provides accurate information to enhance inventory management. 

When You’ll Need Inventory Management Software

The extent to which inventory management is required varies by industry, but the majority of these concepts remain the same. Inventory management is most beneficial to small businesses when all of the details are grasped. Using an inventory management system will help you minimize investment in remaining inventory, rental, shipping fees, and reverse logistics. 

E-commerce stores require warehouses as a point of contact between customers and suppliers. You need warehouse inventory management to make the most profit out of your inventory and ensure that your products do not go to waste. 

E-commerce Growth Depends on Better Fulfillment

69% of customers will no longer shop with a brand if they miss the promised delivery date by two days. That shows that better fulfillment operations are necessary for business growth. Warehouse and inventory management play an important role in fulfillment. So to improve those two will directly impact your whole e-commerce operation positively. Whether you choose to use an inventory management system or warehouse management system, you can find plenty of systems out there that you can smoothly integrate with ERP systems. Many businesses implement ERP to oversee all their processes. And ERP systems are not just for large enterprises, but also smaller ones.

Oct 6, 2022 by Danish Khan

5 min read

Best 3PL (Third Party Logistics) Companies in India

September 30, 2022 by Aayushi Sharawat - 5 min read

What do You Understand by Third-Party Logistics (3PL)?

Let’s first understand what third-party logistics is. The terms fulfillment center and warehouse are equivalent when referring to third-party logistics or 3PL. Order fulfillment businesses also provide many of the services offered by 3PL providers. These services include warehousing, inventory management, shipping, picking and packing and reverse logistics. 

Need For Third-Party Logistics Companies

Cost Saving

You will save on fulfillment costs and also get access to quicker deliveries. Thanks to the vast carrier network of a 3PL. Your shipment will always be protected because more carriers are available to bid on with a more extensive network.


A 3PL can handle both expedited and regularly planned shipments via multiple modes and channels accessible to them. Increased load consolidation, frequent backhauls, and efficient routing and distribution benefit shippers.

Risk Management

Your company is protected from fines and penalties by outsourcing the risks associated with transportation operations to a logistics service provider. They are aware of and abide by the laws at the state and federal levels. 

Technologically Advanced

A reliable 3PL uses powerful tech tools, including tracking tools, a transportation management system (TMS), and others. A 3PL gives you access to a solution that combines reporting and logistics management. To provide visibility on shipment statuses, cost summaries, and typical lead times. Thanks to centralised technology, decisions can be made using real-time and historical data analysis.

Operational Control

You will have more operational control thanks to a 3PL partner. 3PLs can give complete load and freight management visibility thanks to integrated systems and technology. To monitor your transportation management, you will receive regular reports and analyses. The client retains complete control.

Save Time

Businesses can save time and money by outsourcing transportation management. To improve the value of your supply chain processes, third-party logistics providers offer their expertise and resources, freeing up your time to concentrate on your company’s products, operations, and clients.

Some of the Best 3PL Companies in India Are:

1. Shiprocket Fulfillment

Designed to store, handle, pack, and transport orders for eCommerce retailers, Shiprocket Fulfillment is a trusted third-party logistics (3PL) service provider. They have fulfillment centres in Bengaluru, Delhi, Gurugram, Kolkata, Mumbai, and multiple other locations across India. You can effortlessly deliver orders across 24000+ pin codes with Shiprocket Fulfillment, thanks to a broad distribution network supported by 25+ top courier partners. Shiprocket Fulfillment provides 3PL services to various kinds of businesses, not just based in India but from all across the globe.

2. Stockarea

Businesses can create, configure, use, and replicate inventory bases using Stockarea throughout India. Using Stockarea’s cloud platform and as little as 100 square feet, businesses may set up their remote inventory base at any of their network warehouses. Including warehouse, shipping, fulfillment, and customs clearance, comprehensive 3PL services are available to businesses. Stockarea provides its clients with full-on-demand warehousing and logistics services.

3. Jayem Warehousing Pvt. Ltd.

Jayem warehousing has more than 25 years of experience in contract logistics. Additionally, they developed into a full-service 3PL supplier of end-to-end logistics services, offering warehousing, distribution, logistics, fulfillment, first mile, long haul, express, last mile, and packaging services. They provide various logistics services to clients in office automation, FMCD, FMCG, e-commerce, and retail industries out of more than 70 warehouses that run throughout 30 cities in India.

4. Allcargo Logistics

The logistics company Allcargo Logistics Ltd. offers international multimodal transport (LCL, FCL, and air), pan-Indian CFS & ICD operations, project forwarding & crane rental, e-commerce logistics, ship ownership, and contract logistics, among other services. It has a sizable worldwide network and numerous strategic international engagements. It works in 164 countries across 301 offices. 

5. Access Warehousing

This company leverages its outstanding operational experience to provide best-in-class services across an integrated global network, focusing on general business and the specialised needs of the automotive, consumer & retail, oil, healthcare, industrial & aerospace, and technology sectors. Over 200 committed workers around the country operate in different geographic clusters to provide organisational excellence and feasible solutions to the most challenging supply chain issues. They develop and execute industry-leading solutions in both freight management and contract logistics as one of India’s leading non-asset-based supply chain management companies.

6. FM Logistics

One of the prominent  3PL firms, FM Logistic India, oversees 90+ warehouses spread over 30+ locations, totalling more than 4.50 million square feet of warehouse space. FM Logistic India provides warehousing & distribution services for the FMCG, retail, automotive, consumer durables, E-commerce, engineering, telecom, and pharma sectors.

7. Mahindra Logistics Limited

To expand the company’s focus on logistics services for internal and external customers, Mahindra Logistics was established as a strategic 3PL. They specialise in helping businesses implement supply chain solutions by bringing together the best people, technology, processes, and practices.

8. ARK Supply Chain Solutions

Their goal is to become a customer-focused logistics company, which they want to achieve through ongoing technological advancement and more than three decades of expertise. With a total premise space of 500,000 square feet, their facilities comprise a fully operational third-party logistics set-up in Hyderabad, Bangalore, Vijayawada, Bhiwandi, Mumbai, Aurangabad, Pune, Vashi, Delhi & Ambala.

9. Baxi Group

Baxi Group’s unmatched 3PL services, which encompass several benefits, including inventory management, information systems, and reverse logistics, cater to clients across the nation and beyond, earning the company a reputation for excellence, confidence, and dependability. The organisation has reached out to the entire country of India thanks to a solid infrastructure that houses cutting-edge technology and is supported by a skilled and dedicated crew.


It takes careful consideration and significant study to select the best 3PL partner for your e-commerce business based on technological sophistication, customer service, stability, safety, customisation, omnichannel competence, etc. The rewards of choosing the best 3PL partner, however, are enormous. It will enable you to serve your consumers better and provide your company room to expand and build a good benchmark in the market.

Sep 30, 2022 by Aayushi Sharawat

3 min read

Retail Operations: Meaning and Elements

September 23, 2022 by Aayushi Sharawat - 3 min read

Online shopping has become increasingly popular among consumers, making retail operations crucial & demanding. Retailers must act readily to be prepared for the upcoming wave of consumer trends, regardless of whether they are online stores or physical locations. To compete with their rivals, ambitious retail organisations constantly look for ways to increase efficiency, punctuality, and customer satisfaction

What Do You Understand By Retail Operations?

The daily operations of a retail business—a company that sells goods directly to customers—are referred to as retail operations. These tasks, often known as operations, involve selecting and purchasing goods for the store and taking customer payments for both online and offline modes.

What operational strategy is ideal for a business will vary depending on several factors. Although each company must determine its strategy, the primary goal of a business is to stay updated in a changing market. All merchants want to use technology to enhance their operations regardless of their size and product type. 

Elements Of Retail Operations

The operational strategy of a chain or retailer may vary depending on the type of merchandise sold and the target audience. The following are some typical elements of retail operations:

Physical Store Layout

Retail operations include the store’s layout for brick-and-mortar retail businesses. Businesses use shelves, display cases, and aisles to make products easier to find. It becomes easy for the consumer to choose the product without help and make quick decisions.


Logistics in retail refers to transporting goods between production sites, storage facilities, and retail & customer locations. Retail operations specialists may consider multiple modes of transportation, such as trucks, planes and trains, to develop a transport strategy that satisfies customer expectations & saves logistics costs.


Retail operations staff may exhibit a portion of their goods in the store’s main area while keeping excess items in a back room to avoid clutter. Retail store managers frequently keep most of the stock in a warehouse and schedule regular delivery to the store and customers accordingly.

Customer Service

Good customer service plays a vital role in attracting customers by providing them with a delightful and exceptional customer experience. Also, promotional offers and freebies help. Personalisation may also have a significant impact on future client retention. A higher customer lifetime value is the outcome of a higher retention rate.

Mode Of Payment

Customers may have a variety of payment alternatives in both offline and online stores. Exploring different payment methods, such as credit cards, mobile payment applications, and gift cards can help retail operations experts make the purchase process quick and easy for customers.

Return/Exchange Request

Customers may return to the store to exchange a product for another if they need it in a different size or colour or for multiple other reasons. Retail operation staff assists consumers in getting the correct item or making a refund request if the customer requirement is not fulfilled.


Focus on the above elements to sustain your company in a dynamic, highly competitive, and complex business environment and achieve the essential operational excellence for your e-commerce venture. All the mentioned elements can help you optimise your retail operations, but you must use them carefully to achieve the best results. You will encounter obstacles, but the key is to remain focused, pay attention to your consumers, resolve their problems, and take preventative measures.

Sep 23, 2022 by Aayushi Sharawat

1 min read

Managing Inventory The Smart Way – FIFO Method

August 30, 2022 by Debarshi Chakrabarti - 1 min read

With advancements in technology and order fulfillment over the years, it’s no doubt that inventory management has become more accessible across the ecommerce landscape. One method that has stood the test of time is the FIFO method. The First In First Out method is a systematic way in which the goods and products that enter the inventory first are sold first. 

Since this method follows the natural flow of the inventory, businesses find it easier and more effective than other methods like LIFO (Last In First Out), FILO (First In Last Out), FEFO (First Expired First Out) & FMFO (First Manufactured First Out). However, the inventory management method depends on the type of industry or goods sold. But the FIFO method is easy to understand, accepted, and trusted universally. Hence the ease of operations and feasibility make this method the preferred inventory management system. 

First In First Out (FIFO) Method
Aug 30, 2022 by Debarshi Chakrabarti

5 min read

Understanding The Concept of Production Forecasting

July 28, 2022 by Srishti Arora - 5 min read

When running a direct-to-consumer eCommerce business, you must pay attention to every minute detail of your business. From the start of production up till the final delivery, every process must be in sync to avoid delays and errors in processing. The products you produce and the amount you sell must be well in tandem, so you don’t spend more on storage or in a situation where you run out of inventory while the product is still listed on the website. That is why it is essential to forecast demand and production to maintain a decent stock-to-sales ratio at the end of your sales cycle. Demand forecasting and production forecasting are both vital for conducting your business thoroughly. Let’s look at production forecasting and how you can run it for maximum yield. 

What is Production Forecasting?

Production forecasting estimates the future demand for the product to sell and the resources required to manufacture these products. 

It is a technique that helps you maintain optimal inventory levels to keep the overall profitability high and boost customer satisfaction. 

Production forecasting gives you an estimate of the future demand through which you can order your raw material, resources, etc., in advance to avoid the situations of under or overstocking

Importance of Production Forecasting

Production forecasting is essential for your supply chain because it helps improve efficiency at every stage. Also, it helps prevent situations that lead to lesser sales and reduced profitability. Furthermore, it allows you to get a consistent cash flow and offer your customers compatible products. 

Types of Production Forecasting

There are three main types of production forecasting. These include qualitative forecasting, time series analysis, and causal modeling. Let’s have a look at what they are – 

Qualitative forecasting

Qualitative forecasting is done when you do not have many historical data. This can be suitable when launching a new product or brand.

In this type of forecasting, the production managers need to consider the best judgment. Also, they can take inputs from qualitative data from the customers and in-house sales teams. This data can be obtained via surveys, polls, and similar research methods.

By serving your customers, you can understand their satisfaction, brand connections, etc. Doing your sales teams can provide you with an understanding of how well a new product will sell. You can utilize these two insights to create a production forecast to meet demand. It is entirely subjective based on opinions and judgments. 

Time series analysis

The time series analysis lets you make forecasts based on time-stamped data. This means regularly collecting data at specific intervals can help you deduct a time series analysis to forecast future demand.

Once you have this data, you can analyze it to understand why there were bumps in the inventory outcomes in different periods. 

In the time series analysis, you need a large set of data points; otherwise, it will not give you an accurate forecast, or it will not account for variables.

Causal modeling

Causal modeling is a type of production forecasting where brands forecast future events in a retail marketplace.

The production is done keeping the variables that influence the product movement and market. These variables include inventory availability and consumer preferences.

So casual modeling takes into account the position of your brand or product compared to competitors, and from there, it identifies variables that can influence the future of the product in the market. This includes factors like buyer behavior, the flow of the supply chain, availability of products and materials, etc. 

Shiprocket Fulfillment

The Top Forecasting Methods

There is not one production forecasting that works for all retailers; there are several forecasting methods that a brand can choose depending on its needs, product types, data availability, etc. 

Therefore, it is essential to determine your needs and choose your forecasting method. You are a few standard forecasting methods that brands use – 

The Regression Model Method

In the regression model method, you examine independent and dependent variables that affect your sales performance. 

These independent and dependent variables include sales performance, marketing strategies, campaigns, marketplaces where you sell, etc.

You can gain an insight into what the future might look like depending on the previous sales and production performance. 

To carry out a regression model method forecasting, you will need several years of sales history to obtain meaningful trends. 

The Trend Projection Method

The trend projection forecasting method is straightforward as it considers past sales data and helps predict future production. 

Direct-to-consumer brands use it to get intermediate or long-term forecasts for popular inventory items. 

The trend projection method requires a few years of annual sales data to get the most accurate results. 

The Historical Analogy Method

The analogy method considers a quantitative approach to forecasting in which the past sales of a similar product are used to predict the sales of a new SKU. It is a comparative analysis done during the introduction of identical inventory items.

Final Thoughts

Production forecasting is essential for your e-commerce fulfillment supply chain as it helps you optimize your sales and sync them with demand. It can help you be prepared for different outcomes and give you an edge over the competition regarding sales.

Shiprocket Fulfillment
Jul 28, 2022 by Srishti Arora

1 min read

[Infographic] Demand Forecasting In Supply Chain

July 26, 2022 by Srishti Arora - 1 min read

To ensure your eCommerce supply chain runs smoothly, you must ensure that all operations work efficiently. This means you must be on top of your inventory management to stock items regularly to ensure you never run out and face difficult situations. But, how can you know how much stock to order without knowing your sales? This is where the concept of demand forecasting comes into the picture.

Demand forecasting refers to understanding the customer demand in the future and how it will affect your supply chain. For example, if you had a great sale last month and understand that particular SKUs are working great for your business, you can estimate the demand shortly. Demand forecasting helps you analyze future demand based on historical sales data and current market trends so you can mold your business accordingly. Demand forecasting is an upcoming phenomenon that companies are deploying to enhance and optimize their supply chain. Let’s look at demand forecasting, the techniques to carry it out, and how it can help grow your business.

Shiprocket Fulfillment
Jul 26, 2022 by Srishti Arora