• Inventory Management
  • Warehouse Management

Inventory vs Warehouse Management: What’s the Difference?

Written by Mark Gemberling
February 14, 2019

Support your processes your way

Understanding the similarities and differences between inventory management and warehouse management are essential to driving improvements in both areas.

When it comes to handling inventory, materials and stock in supply chain management, a lot of terminology tends to get thrown around. For newcomers and business partners, many of these terms may sound like synonyms—that is, different jargon all referring to the same thing.

Take inventory management and warehouse management, for example. You handle inventory when managing a warehouse, so does that mean they are interchangeable?

While inventory management is theoretically a part of warehouse management, they tend to refer to two different halves of how product flows through your operation.

So what’s the difference?

Inventory Management: Inbound & Number-Focused

Of the two, inventory management is more specific, inventory management refers to inbound processes like receiving inventory and put-away. It is also more specific, focusing mainly on the tracking of products, raw materials, and unfinished items within the distribution and production process, including demand forecasting and inventory control.

An effective inventory management system (IMS) in the form of software will include helpful tools to evaluate current stock levels of materials and products to meet demand while reducing overall inventory costs and turnover. Used correctly, IMS software can be an essential starting point for businesses to better manage stock levels and materials.

However, higher volume operations that are more complex may need to explore a more comprehensive technology solution.

Warehouse Management: Outbound & Holistic

While inventory management takes a basic approach to handling stock levels, warehouse management offers a more comprehensive methodology that encompasses all aspects of running and improving enterprise warehouse systems. Warehouse management also tends to be more concerned with outbound functions, such as pick, pack and ship processes.

Warehouse management systems (WMS) incorporate a warehouse’s operational processes and usually integrates with other enterprise systems, including production and sales programs, along with inventory control functionality or IMS integration. In some platforms, such as RFgen’s Warehouse Director, your WMS and IMS software are one and the same, allowing you to focus on accelerating inventory workflows without burdening your operation with a slow ROI.

The more centralized and holistic approach of a warehouse management system gives your business far more control of both your enterprise warehouse inventory and overall warehouse processes. Data from all aspects of enterprise inventory and warehouse processes can be integrated to provide more specific and actionable insights for your business, from raw materials to delivery. It can also help you to get the greatest ROI on your warehouse automation systems.

While inventory management is an absolute must-have for any warehouse, expanding that technology with WMS functionality like directed work and intelligent picking paths add another layer of control that optimizes performance, efficiency and scalability to new levels.

Many enterprises like yours are exploring new ways to improve their inventory systems, including more in-depth predictive analysis and more comprehensive warehouse management systems. Inventory management and warehouse management are often used interchangeably to refer to material and product tracking in these contexts. While they do have some overlap, each has a slightly different meaning when it comes to managing inventory.

Inventory management provides a basic level of information to make material and product tracking more efficient. In an enterprise warehouse situation, however, more sophisticated systems are needed for better data and a greater return from your investment in materials, labor and technology. Warehouse management systems offer a broader, more integrated view of your inventory and warehouse processes.

An in-between approach is also available in the form of RFgen’s Warehouse Director, a WMS “Lite” technology that enables you to focus on maximizing your operational effectiveness with lightweight implementation, upkeep and cost.