What Is Rolling Inventory?
If your business requires a warehouse, you’re certainly already aware of the costs that materials handling and storage incurs. Large warehouses cost more than small ones, and the labor costs associated with warehousing – loading and unloading shipments, sorting and storage – may be considerable in operations with a large amount of turnover. Rolling inventory systems aim to reduce these costs by making warehousing operations more efficient.
Rolling inventory systems aim to reduce the amount of time merchandise sits in a warehouse by changing the role of a warehouse from a storage center to a distribution node. In an ideal rolling inventory system, merchandise unloads from inbound trucks directly to trucks ready to deliver goods to customers. This system reduces costs by eliminating much of the manpower necessary in warehousing, by bypassing the storage and retrieval phases of warehousing, directly moving from receiving shipments to loading shipments.
Rolling inventory relies upon a company having access to more shipping trailers or trucks than it needs to fulfill orders at any given time. In many cases, companies that operate a rolling inventory process store empty and partially full trailers in a yard outside their warehouse, and continually have trailers docked at the warehouse and ready to load. As goods are received, they’re moved directly from the inbound truck to trailers scheduled for delivery, avoiding storage in the warehouse whenever possible.
The partial-truckload method isn’t the most cost-efficient use of rolling inventory practices, but it allows for greater flexibility in managing deliveries and stock than the full-truckload method. In this scheme, a trailer delivering stock to the warehouse pulls to a dock, and warehouse workers earmark stock for a future delivery on its bill of lading. All stock that isn’t earmarked for the delivery is offloaded and warehoused, and stock for that shipment remains on the trailer. The half-full trailer is then placed in the yard, and then filled with the remaining portion from warehoused stock before it leaves for delivery. This method saves labor and warehousing costs for the portion of the shipment stored in the trailer.
This mode of rolling inventory is more cost effective, but requires tight logistics controls that don’t allow for much flexibility. In this method, a trailer that arrives isn’t docked, but parked immediately, and held with its full load untouched. When the trailer is needed for shipment, warehouse staff unloads only the portion of goods that doesn’t go out on the delivery, and backfills the trailer with the balance of the order. In this method, the trailer is only docked once, further reducing labor and storage costs from the partial-truckload method.
This is the most cost-effective mode of implementing rolling inventory, but offers the least flexibility. When a truck arrives, it docks. Its bill of lading is sorted to match an outgoing delivery, and all unnecessary items are removed from its trailer. Before the trailer leaves the dock, warehouse workers load it with the balance of the outbound order, regardless of the ship date. The full trailer, which is packed and ready to ship, is then placed in the yard until its shipping date.