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Tips for Classifying and Controlling Warehouse Stock

18/01/2025 ducanh INDUSTRY NEWS

Classifying and controlling the goods in your warehouse is the basis for using space well and keeping supply on track. This article explains the main types of warehouse stock, how to control and check it, and which racking systems suit large volumes.

What is warehouse stock?

Warehouse stock, also called warehouse inventory, refers to the products or materials a business keeps on its premises. These items are usually a company investment, held to meet customer demand or to support production. They may be raw materials or finished goods, with the ultimate aim of generating profit through sale or processing. That is why choosing the right way to classify warehouse stock is so important. Businesses also need to consider the space each item occupies and the turnover rate of each SKU (Stock Keeping Unit).

Choosing the right method to classify warehouse stock is extremely important

Classifying warehouse stock

How warehouse stock is classified depends on the characteristics of each product. Within the same business, each item may follow a different storage policy. However, stock is usually grouped by function, for example:

Cycle stock.
- Core products used to meet regular demand, without allowing for major swings in the supply chain.
Seasonal stock.
- Built up for peak periods such as Black Friday, Christmas or Lunar New Year.
Safety stock.
- Extra stock held to cover unexpected situations such as supply chain delays.
Alert stock.
- The inventory threshold that signals it is time to reorder. It is usually set higher than safety stock.
Dead stock.
- Damaged, obsolete or unsaleable goods. The aim is to keep stock moving and avoid it “dying” in the warehouse.

Warehouse stock can also be classified by its role and how it is organised:

Physical stock: The inventory actually available for sale or production.
Minimum stock: The minimum level needed to avoid stock-outs.
Maximum stock: The maximum storage capacity of the facility.
Optimal stock: The ideal balance – enough to meet demand without waste.

Controlling warehouse stock

Every organisation usually has its own inventory policy for managing warehouse stock. This policy may set, for example, the minimum number of days of stock needed to secure supply for customers or production. Control requires close monitoring of all goods coming into and going out of the warehouse.

How to check warehouse stock

To stay competitive and run smoothly, businesses can check their warehouse stock in several ways, from manual to fully automated:

Use a Warehouse Management System (WMS).
- Dedicated software tracks warehouse stock in real time. The business knows the origin, current location and destination of every item, enabling accurate, on-time deliveries.
Physical inspections.
- Going to the warehouse in person (the “genchi genbutsu” philosophy) helps spot obsolete or missing goods and complements the software data.
Reassessing inventory levels.
- Demand forecasts can be wrong when market trends change suddenly. When new information comes in, adjust stock levels to avoid surpluses or shortages.

Why increase warehouse stock levels?

Although keeping surplus stock to a minimum is the general rule, there are good reasons for a business to hold more warehouse stock:

Avoid stock-outs.
When products are unavailable, you lose customers and revenue. Keeping some stock as a “safety buffer” avoids this risk.
Meet business targets.
A “make to stock” strategy keeps you ready for promotions or sales targets.
Shorter delivery times.
Having goods in stock speeds up dispatch and increases customer satisfaction.
Avoid extra costs.
Adequate stock reduces the need for expensive rush orders.
Meet seasonal demand.
For example, toy companies build up stock before Christmas to serve the surge in demand.

Racking types for storing large volumes of goods

When managing large volumes, choosing the right racking system is key to optimising space, improving storage efficiency and making goods-in and goods-out easier. Here are the most common warehouse racking types:

1. Selective pallet racking

Selective pallet racking is the most common type, giving direct access to every pallet. It is simple, easy to install and suits many kinds of goods. Load capacity per level is usually 500 kg to 2,500 kg, depending on the design.

Long Quyen selective pallet racking at the Duc Giang chemical warehouse

2. Double-deep racking

Double-deep racking is formed by placing two selective racks back to back, increasing storage density by up to 40% compared with standard selective racking. However, reaching the rear pallets requires a special forklift with extended forks.

Long Quyen double-deep racking at the Sunhouse warehouse

3. Drive-in/drive-through racking

Drive-in/drive-through racking lets forklifts drive into the rack to pick up or put away goods, optimising space by eliminating aisles between racks. It suits uniform goods stored in large quantities that do not need frequent access.

Long Quyen drive-in racking at the Sumi VN warehouse

4. Push-back racking

Push-back racking stores 2 to 4 pallets deep on each level. When a new pallet is loaded, the previous one is pushed back along inclined rails. The system works on a last-in, first-out (LIFO) basis and suits fast-moving goods.

5. Pallet flow racking (roller racking)

Pallet flow racking uses inclined roller tracks so that pallets slide automatically from the loading end to the picking end on a first-in, first-out (FIFO) basis. It suits goods with expiry dates or those managed by batch.

6. Cantilever racking

Cantilever racking is designed for long, bulky items such as steel pipes, timber and fabric rolls. It consists of arms mounted on columns with no front uprights, making long items easy to load and unload.

Cantilever racking at the Huayuan warehouse

7. Mezzanine floors

A mezzanine adds an intermediate floor to the warehouse, increasing usable area without expanding the footprint. It suits warehouses with high ceilings and makes use of vertical space.

Mezzanine floor for storage at the Huayuan warehouse

8. Very narrow aisle (VNA) pallet racking

VNA racking is designed with narrow aisles to maximise storage space. It requires special forklifts that can operate in narrow aisles, increasing storage density without expanding the warehouse.

The right racking should be chosen based on the following factors:

Characteristics of the goods: Size, weight, nature and turnover rate of the goods.
Warehouse space: Floor area, ceiling height and building structure.
Handling equipment: The type of forklifts and support equipment used in the warehouse.
Investment budget: Installation and maintenance costs of the racking system.

Choosing the right storage racking is key to warehouse management: it optimises space, improves storage efficiency and makes goods-in and goods-out easier. With a highly qualified team of engineers and designers, Long Quyen is committed to delivering quality products that meet international standards. We are always ready to advise on and provide the most suitable storage solution for your warehouse.