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Understanding Different Inventory Types in Warehousing
In modern warehousing, inventory isn’t just about boxes on racks — it’s about the type of inventory and the specific controls needed to manage each efficiently. Each inventory type comes with its own set of handling, tracking, and compliance requirements. Here’s a quick breakdown of the most common types and how they are typically managed:
1. Regular Inventory
What it is:
Standard inventory with no special controls — commonly used in general merchandise, retail, or industrial supplies.
Handling Peculiarities:
FIFO (First-In-First-Out) or FEFO (First-Expired-First-Out) applied as per business rule
No need for batch, serial, or expiry tracking
Simple putaway and picking logic
Basic location and quantity tracking through the WMS
Use Case:
Apparel, electronics accessories, tools, furniture
2. Batch-Controlled Inventory
What it is:
Inventory tied to specific batches or lots produced or received together. Common in pharma, food, and chemicals.
Handling Peculiarities:
Each item is linked to a batch/lot number
Enables traceability back to manufacturing or supplier
Batch-level data like production date, shelf life, or quality grade must be captured
Picking often done batch-wise (FIFO, LIFO, etc.)
Use Case:
Pharmaceuticals, cosmetics, paint, packaged food products
3. Expiry-Controlled Inventory
What it is:
Inventory with a defined expiration date, beyond which it becomes unsellable or unsafe.
Handling Peculiarities:
Strict FEFO enforcement (First-Expiry-First-Out)
Near-expiry alerts for proactive clearance or markdowns
Shelf life validation during putaway and dispatch
Regulatory compliance and audit readiness
Use Case:
Perishables, over-the-counter drugs, supplements, dairy
4. Serial-Controlled Inventory
What it is:
Each item is uniquely identified by a serial number. Tracking happens at the individual unit level.
Handling Peculiarities:
Serialized at inbound, tracked throughout its lifecycle
Useful for warranty, maintenance, recall, and customer service
Requires scanning at every touchpoint (inbound, storage, dispatch)
Complex return and exchange processes
Use Case:
Electronics, medical devices, luxury goods, machinery
5. Condition-Controlled Inventory
What it is:
Inventory stored or handled under specific environmental conditions like temperature, humidity, etc.
Handling Peculiarities:
Monitored through IoT sensors
Segregated storage zones (cold storage, clean rooms)
WMS must support condition-based location assignment
Compliance with health & safety regulations
Use Case:
Vaccines, frozen food, biologics, fine chemicals
6. Returns & Reverse Inventory
What it is:
Returned or rejected inventory awaiting inspection, refurbishment, restocking, or disposal.
Handling Peculiarities:
Tagged as “quarantine” or “return pending” in system
Segregated from saleable stock
Requires disposition workflows: resale, scrap, refurbish
May involve serial/batch validation and vendor coordination
Use Case:
eCommerce, electronics, automotive, fashion
7. Quality Hold / Quarantine Inventory
What it is:
Inventory under inspection or pending approval before it’s made available for sale or production.
Handling Peculiarities:
Status-controlled in the WMS (non-pickable until cleared)
Triggers QA workflow for inspection or testing
Could be moved to rejection, return, or rework areas
Strict access and visibility controls
Use Case:
Manufacturing, pharmaceuticals, imports awaiting lab clearance
7. Quality Hold / Quarantine Inventory
What it is:
Inventory under inspection or pending approval before it’s made available for sale or production.
Handling Peculiarities:
Status-controlled in the WMS (non-pickable until cleared)
Triggers QA workflow for inspection or testing
Could be moved to rejection, return, or rework areas
Strict access and visibility controls
Use Case:
Manufacturing, pharmaceuticals, imports awaiting lab clearance
Inventory Allocation / Reservations
Covers inventory that is:
On hand
In transit
Ordered
Picking Mistakes to Avoid in Warehouse Management System
Conclusion
