How Intelligent Inventory Management Via Wireless Systems Reduce Warehousing Costs

How Intelligent Inventory Management Via Wireless Systems Reduce Warehousing Costs

In a warehouse, problems tend to occur basically in four categories: receiving, storage, order-picking, and shipping. A study in the United Kingdom revealed that order picking is the most costly among all these activities. In fact, 60% of the warehousing expenses could be attributed to order picking.

Intelligent inventory management via wireless systems brings down the warehousing costs. For instance, by adopting real-time best practices such as production planning and ordering policies, the total inventory can be reduced. Reduced inventory levels lead to a reduction in inventory cost and, more importantly, streamlines order-picking operation within the warehouse. Plus, an effective wireless storage location policy will shorten travel time for storage, retrieval, and order picking. You can read more about order picking here.

The following are the benefits that wireless systems provide to warehouse operators:

Timely availability of product information

Wireless systems make product information available in real-time. So, staff can access it instantly from anywhere and at any time.

Automatic transmission of Information

Both inbound and outbound products will be able to transfer information about quantity, part & lot number, and so on to the staff housed anywhere in the warehouse.


Being inherently portable, warehouse users can use it for product delivery, storage, and so on.

Location finding

By adding special RF (Radio Frequency) devices to products, they can be easily tracked inside a warehouse. This ensures effective storage location management and order picking, which reduces costs of distribution centers/warehouses.


Wireless devices assist in the parallel transmission of data to mobile users within a specified area. This functionality ensures efficient means of distributing information to a large group of people.

The agile inventory management software in a warehouse that centers on a hybrid wireless network could be divided into parts:

1) The Core Network

2) The Access Medium

Here’s an in-depth analysis of the hybrid wireless system. The core network is analyzed first and after that, medium access systems.

1) The Core Network

The core network, responsible for transmission and receiving of information comprises of two well-known systems: a) Wireless Local Area Network (W-LAN) and b)Indoor Global Positioning System (GPS).

a)Wireless Local Area Network (W-LAN)

The Wireless Local Area Network is responsible for receiving product information and its automatic transmission to the central warehouse database system and wireless hand-held devices.

The benefits of Wireless LAN systems in Warehouse Inventory Management System

  • Wireless LAN systems provide LAN users with real-time information irrespective of their location in the organization. This mobility supports productivity not possible with traditional networks.
  • Installing a wireless LAN system is quick and easy as you don’t have to pull the cable through walls and ceiling
  • The installation cost of wireless LAN hardware is more than wired LAN hardware; however, overall installation expenses and life-cycle costs is lower.

b) Indoor Global Positioning System (GPS)

Besides W-LAN, you can try Indoor GPS, which is also part of the core network infrastructure that facilitates wireless inventory management. Indoor GPS is a location identification system that focuses on product location and tracking in indoor environments. Once the warehouse receives product info from the W-LAN, it generates a put-away list, highlighting the warehouse storage location. The indoor GPS on receiving the put-away list automatically transfers the list to the appropriate forklift operator who retrieves the pallet (carton) of the product and places it in the required location.

2) The Access Medium

About the Access Medium, you can further divide into two systems: a) RF identification (RF-ID) and b) Portable data terminals (with RF technology).

a) RF identification (RF-ID)

RF identification (RF-ID), embedded in the products’ pallets, transmits all the product info to the central warehouse system through the wireless LAN.

Following are the benefits of Implementing RF-ID in wireless inventory management system:

  • With storage costs spiraling, GPS ensures optimum utilization of the space and enables the natural movement of goods.
  • Inaccurate infantry management, along with issues of theft, causes a gap between expectations and actual goods available. GPS bridges this gap.
  • Incorrect deliveries could lead to on-shelf or out-of-stock situations that could lead to dented sales and customer relationships. A well-integrated supply chain leads to fewer errors.
  • The surge in just-in-time retailing has helped retailers to cut down their stock levels. On the other hand, distribution companies can hold more quantities of just-in-case or buffer stock if there’s a rise in retail demands. Better supply chain visibility backed by precise and latest information could help reduce the buffer stocks.

b) Portable data terminals (with RF technology)

Portable data terminals or PDTs (with RF technology), is used when the received pallets or cartons of products do not have an RF-ID. The readers manually scan the bar code of the products and transmit information wirelessly to the central database.

The following are the benefits of leveraging PDTs for wireless inventory management:

  • No more wiring your cables through walls and ceilings. PDTs, using steel studs and other reinforcements, can easily penetrate through walls and floors.
  • Sharing data and transferring files in real-time mode become easier with PDTs. Not to mention, it can be connected to multiple computers, printers, and other accessories.
  • Fast and error-free data transfer is possible as PDTs offer wireless point-to-point links even if separated by walls and floors at a speed of up to 38.4 bits.
  • You don’t need any technical training to use PDTs. It can easily be connected to any device with a standard RS-232 or keyboard port. However, knowledge of standard communications software for serial file transfers would be useful.
  • As rechargeable batteries can be used, PDTs can provide a lot of hours of mobile access, specifically during the scanning period, to the ERP system.

With the above- proposed inventory management systems, information about goods could be sent accurately, and in real-time to the central database, right from the time it’s arrived at the warehouse to the time it’s dispatched. If you find wireless technology going beyond your earmarked budget for warehouse management, then you could try some free and open source warehouse management software as well.

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Author: Jennifer Warren

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