How to Set Up Inventory in a Warehouse

bizfluent article image

Jupiterimages/BananaStock/Getty Images

Access to your company inventory is important to the efficient operation of your organization. When you organize your warehouse inventory in a way that is accessible then it makes doing an accurate inventory easier, it speeds up service to the customer and it allows logistics personnel to more efficiently and accurately fill orders. The money and time invested in a proper inventory set up will be recovered through a reduction in time spent using inventory to complete orders and tracking inventory for reordering.

Measure the floor space in your warehouse and create a layout on paper using graph paper and a pen. You will want to designate areas where shelves will go for product, where your staging area will be to pack and ship orders, a place for product returns, an area for receiving, a storage area for warehouse equipment and supplies and office space for warehouse administration.

Develop a numbering system for your shelves and begin applying it to your drawing. You will want to have as much of your warehouse inventory system laid out on paper before you start putting shelving and equipment in place. To number shelves start with the number one at the shelves closest to the receiving door and then number the shelves sequentially around the warehouse. When you begin to apply categories to your inventory, use the shelving numbers and track your inventory that way. For example, category one could be office supplies and category two could be office furniture. To add detail to your system you could use subcategories of letters and then apply those letters to the different shelving levels. For example, if number one is office supplies then 1-A could be pencils. A section of the number one shelving unit would be designated "A" for pencils.

Install industrial strength shelves into your warehouse as per your layout. You can purchase the shelves at a warehouse supply store and have them installed by a professional crew.

Begin marking shelves, as per your layout, using a can of paint and a paint brush. Since it can be difficult to match up a paint color your warehouse staff will be able to see with the color of your shelves, the best approach is to paint a white box and then paint the identification code inside the box. A white box four inches high by six inches wide with letters at least three inches high will be clear enough to be read in warehouse lighting.

Catalog every piece of inventory into your inventory control system as you place it into the proper shelving area. Do not mark the inventory in until you or a staff member physically places the product on the shelf and then signs an inventory control sheet saying the product is in the warehouse.


  • Create an inventory procedures manual. Ensure that each employee is trained on the manual before working in the warehouse.