A Beginner’s Guide to Warehouse Putaway: Optimizing Inventory Management

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If you are an e-commerce business that is looking to avoid any inventory management mishaps, it may be time to employ warehouse putaway. Warehouse putaway ensures the movement of inventory to an optimal warehouse location, ensuring more efficient warehouse management. 

It is a key process that dictates how well-stocked as well as accessible your inventory is. However, if putaway is performed poorly, it can lead to a great deal of confusion, lost time, and safety hazards for the staff at the warehouse. In fact, 45% of managers claim that putaway is among the most inefficient operations in a warehouse.

Through this blog, we aim to explore the nuances of warehouse putaway in e-commerce, the different warehouse putaway methods, and how you can ensure complete effectiveness when using WMS software for your e-commerce business. 

What is warehouse putaway?

Warehouse putaway is a fundamental process in the realm of inventory management that involves the strategic placement of goods within a warehouse facility. It refers to the task of receiving and storing products in designated locations, ensuring optimal organization and accessibility for efficient operations.

Putaway is an essential component of the overall warehouse management system, aiming to maximize space utilization, streamline inventory handling, and facilitate quick retrieval when orders are placed. Using effective putaway practices, businesses can enhance their inventory management capabilities, reduce operational costs, faster order fulfillment, and provide better customer service.

The effective utilization of warehouse space, combined with streamlined putaway processes, contributes to an efficient supply chain ecosystem, setting the stage for success in the dynamic world of e-commerce logistics and distribution.

Steps to Implementing Warehouse Putaway

At its core, the putaway process involves several key steps. All of them have been discussed below in detail to help businesses implement the putaway process in warehouse smoothly:

  1. Receiving: Warehouse putaway begins with receiving incoming goods from suppliers or production lines. During this stage, e-commerce shipments are inspected for quality, quantity, and any damages. Accurate documentation and labeling are crucial to maintaining a transparent inventory record.
  2. Planning: Before placing items in their designated storage locations, it’s crucial to create a comprehensive putaway plan. This involves analyzing factors such as product characteristics, demand patterns, expiration dates, and available warehouse space. By considering these variables, businesses can optimize their putaway strategy and minimize unnecessary product movements in the future.
  3. Slotting: Slotting refers to assigning specific storage locations within the e-commerce warehouse for each product. Factors considered during slotting include the item’s size, weight, fragility, shelf life, demand frequency, and compatibility with neighboring products. The goal is to assign the most suitable location to each item to maximize space utilization and ensure efficient order fulfillment.
  4. Placement: Once the slotting decisions are made, the actual placement of products takes place. Warehouse personnel carefully move goods to their designated areas, following a logical and organized approach. They may use equipment such as forklifts, pallet jacks, or conveyors to transport items safely and efficiently.
  5. Tracking: Effective putaway involves maintaining accurate inventory records. Warehouse management systems (WMS) or other tracking software are often utilized to capture and update the storage locations of products. Real-time visibility into inventory levels and locations enables streamlined order fulfillment processes and minimizes errors.
  6. Continuous Improvement: Warehouse putaway is not a one-time process but an ongoing endeavor within e-commerce business. Regular analysis and refinement of putaway strategies are necessary to adapt to changing business needs, optimize space utilization, and improve overall efficiency. In addition to this, data analytics and performance metrics play a vital role in identifying areas for improvement and implementing necessary adjustments.

Types of warehouse putaway

There are different types of warehouse putaway strategies that e-commerce companies can employ, depending on their specific needs and the nature of their operations. Three common types of warehouse putaway methods are dynamic putaway, direct putaway, and fixed-location putaway. Each approach offers distinct advantages and considerations, which we will explore in more detail.

  • Dynamic putaway

Dynamic putaway is a flexible and versatile method used in many warehouses to optimize storage space and increase efficiency. With dynamic putaway, items are not assigned fixed locations in the warehouse. Instead, the placement of goods is determined based on real-time factors such as availability of space, proximity to pickup locations, and the nature of the products.

One of the primary benefits of dynamic putaway is its ability to adapt to changing inventory levels and storage requirements. As new items arrive, they can be placed in the most suitable available space within the warehouse. This approach minimizes travel time for workers and allows for better space utilization, as the warehouse can adjust to accommodate varying product sizes and quantities.

However, dynamic putaway requires robust inventory management systems and real-time visibility into stock levels to ensure accurate placement and retrieval of goods. Without proper tracking and monitoring, it can be challenging to maintain an organized and efficient warehouse layout. Automation technologies such as barcode scanning, RFID (Radio-Frequency Identification), and warehouse management systems (WMS) play a crucial role in supporting dynamic putaway operations.

  • Direct putaway

Direct putaway, also known as traditional putaway or fixed-bin putaway, follows a predetermined system of assigning specific storage locations for incoming items. Each product is allocated a fixed location within the warehouse based on predetermined rules, such as product type, size, or velocity of movement. When new inventory arrives, it is directly placed in its designated storage area.

This method offers a clear advantage in terms of organization and ease of locating items. Since products have predetermined locations, warehouse personnel can quickly find and retrieve goods, streamlining the picking process. Direct putaway is particularly useful for companies with stable inventory levels and well-defined storage requirements. It ensures consistency and minimizes the chances of errors during putaway and retrieval.

On the other hand, direct putaway may be less flexible compared to dynamic putaway when it comes to accommodating changes in inventory levels and storage needs. In cases of inventory fluctuations or the introduction of new products, it may require adjustments to the predetermined storage locations warranting additional effort and time.

  • Fixed-location putaway

Fixed-location putaway is a method that assigns a fixed location to each incoming item based on its product characteristics or specific requirements. Unlike direct putaway, which assigns fixed locations for all items of a particular type, fixed-location putaway provides a unique storage location for each individual item. This approach is commonly used when dealing with high-value or specialized goods that require precise tracking and handling.

By allocating a dedicated storage location for each item, fixed-location putaway ensures maximum traceability and accountability. It minimizes the risk of misplacing valuable items and simplifies inventory audits or cycle counts. This method is particularly prevalent in industries with strict regulatory compliance or where item-level tracking is critical, such as pharmaceuticals, electronics, or automotive parts.

However, fixed-location putaway can be more time-consuming and labor-intensive compared to other methods, as each item requires individual placement and tracking. It may also present challenges in cases of inventory expansion or rearrangement, as finding suitable storage locations for new items while maintaining the existing layout can be complex.

Benefits of an Optimized Warehouse Putaway Process

Implementing an optimized warehouse putaway process can yield numerous benefits for e-commerce businesses. Let’s explore some of the key advantages of putaway in warehouse management:

  • Optimizes the Warehouse Layout

Efficient warehouse putaway practices contribute to a well-organized and optimized warehouse layout. By strategically placing items based on their characteristics and storage requirements, e-commerce businesses can minimize unnecessary movement and travel time within the warehouse. This streamlined layout enhances operational efficiency, reduces picking errors, and improves overall productivity. It also allows for easier navigation and quicker access to high-demand products, ultimately leading to faster order fulfillment and improved customer satisfaction.

  • Offers Real-time data insights

An optimized warehouse putaway process, especially when supported by advanced technologies like warehouse management systems (WMS) and automation tools, provides e-commerce businesses with real-time data insights. These insights enable better decision-making and facilitate proactive inventory management. By tracking incoming inventory, monitoring stock levels, and analyzing product velocity, businesses can gain valuable visibility into their warehouse operations. Real-time data helps identify trends, anticipate demand fluctuations, and make informed decisions regarding stock replenishment, order prioritization, and storage space utilization.

  • Helps track your stock at all times

Accurate stock tracking is crucial for efficient warehouse management. An optimized putaway process ensures that each item is assigned a designated location and accurately recorded in the inventory management system. This level of precision enables businesses to track stock movements and monitor stock levels at all times. By maintaining accurate stock information, online businesses can prevent stockouts, minimize overstocking situations, and effectively plan for inventory replenishment. Furthermore, it enables better order fulfillment accuracy, reducing the likelihood of shipping errors and customer dissatisfaction.

  • Effectively uses storage space

Efficient warehouse putaway practices maximize the utilization of available storage space. By strategically assigning items to appropriate storage locations based on their characteristics and demand patterns, businesses can optimize the use of vertical and horizontal space within the warehouse. This approach minimizes wasted space, avoids overcrowding or underutilization of certain areas, and ensures an optimal balance between storage capacity and accessibility. Effective space utilization also reduces the need for off-site storage, saving costs associated with additional facilities or warehouse expansions.

Best Practices for Optimizing Your Putaway Process

Optimizing the putaway process in your warehouse is essential for maximizing efficiency, reducing errors, and improving overall productivity. By implementing the following best practices, you can enhance your putaway operations and streamline your e-commerce warehouse processes.

  • Streamline the Process with a Warehouse Management System

Investing in a robust Warehouse Management System (WMS) for your e-commerce business is a crucial step in optimizing your putaway process. A WMS automates and centralizes various warehouse operations, including putaway, inventory tracking, and order fulfillment. It provides real-time visibility into stock levels, optimizes storage space, and streamlines workflows.

A WMS allows you to efficiently manage the putaway process by generating putaway tasks based on predefined rules and priorities. It ensures that items are assigned appropriate storage locations, considering factors such as product characteristics, demand patterns, and accessibility. Additionally, a WMS enables seamless integration with other systems like barcode scanners or RFID technology for accurate and efficient item tracking.

  • Reduce Travel Time and Distance

Minimizing travel time and distance for warehouse personnel during putaway can significantly improve operational efficiency. Consider the following strategies to achieve this:

  1. Zone-based Putaway: Divide your warehouse into zones based on product categories, demand patterns, or storage capacities. Assign specific teams or individuals to each zone to handle putaway tasks within their designated areas. This approach reduces the need for extensive travel across the warehouse, optimizing time and effort.
  2. Batch Putaway: Group together multiple putaway tasks that share similar characteristics or storage locations. By batching these tasks, warehouse staff can complete them in one trip, reducing the number of trips required and maximizing their productivity.
  3. Proximity-based Placement: Whenever possible, place items near the areas where they will be frequently picked. By strategically positioning high-demand products closer to picking areas, you can minimize travel time and streamline order fulfillment.
  • Track all items

Accurate item tracking is crucial for effective putaway and inventory management. Implementing comprehensive item tracking processes helps prevent errors, locate items quickly, and maintain inventory accuracy. Consider the following practices:

  1. Barcode or RFID Scanning: Utilize barcode scanning or RFID technology to track items during the putaway process accurately. These technologies allow for quick and reliable identification, reducing the likelihood of misplaced or mislabeled items.
  2. Real-time Inventory Updates: Ensure that your inventory management system is updated in real time when items are put away. This enables accurate stock tracking, prevents stockouts or overstock situations, and facilitates efficient order fulfillment.
  3. Cycle Counting: Regularly conduct cycle counts to verify the accuracy of your inventory. This practice involves randomly auditing a subset of items in the warehouse to compare against recorded quantities. Cycle counting helps identify discrepancies and address any issues promptly, maintaining inventory integrity.
  • Use a Mix of Fixed Locations and Dynamic Locations

Consider utilizing a combination of fixed locations and dynamic locations for your e-commerce putaway process. Fixed locations provide consistency and ease of item retrieval, particularly for high-demand or high-value items. Assigning specific storage locations for such items ensures quick and accurate picking.

On the other hand, dynamic locations offer flexibility and efficient space utilization. They allow you to adapt to changing inventory levels and storage requirements. Dynamic putaway is particularly suitable for items with varying sizes, quantities, or demand patterns. By leveraging dynamic locations, you can maximize storage capacity and optimize warehouse layout based on real-time factors. Finding the right balance between fixed and dynamic locations depends on your specific inventory characteristics, operational needs, and the nature of your business.


While it may not seem very pertinent at first glance, warehouse putaway is the one way you can ensure faster fulfillment and better warehousing. Through putaway warehouse management, you stand to create faster allocation systems for any products that you might receive in the future. It also reduces the chances of misplacing or losing inventory and ensures safety all around for your staff.

In addition to this, you can opt for a WMS to ensure that all your e-commerce business processes are centralized and automated. This can help you achieve efficiency, accuracy, and speed. It optimizes the warehouse layout, provides real-time data insights, facilitates accurate stock tracking, and maximizes storage space utilization. 

By implementing efficient putaway strategies, businesses can enhance their overall warehouse processes, improve productivity, and ultimately deliver better service to their customers. So if you don’t have putaway management systems in place, consider investing the time and resources into one at the earliest.


What are putaway rules?

Putaway rules are predefined guidelines or criteria used to determine the appropriate storage location for incoming items during the putaway process in a warehouse. These rules help ensure efficient utilization of storage space, organized inventory placement, and easy retrieval of items when needed.

What are the 4 main functions of a warehouse?

The four main functions of a warehouse are storage and inventory management, order fulfillment, distribution, and transportation and value-added services such as product customization, kitting or assembly of items, labeling or packaging modifications, quality control inspections.

What is putaway accuracy?

Putaway accuracy refers to the precision and correctness of placing incoming items into their designated storage locations within a warehouse. It ensures that items are placed accurately, following predetermined rules or systems, and reduces the chances of misplacements or errors during the putaway process.

What are the benefits of directed putaway?

Directed putaway offers several benefits, including efficient organization and improved productivity in the warehouse. It ensures that incoming items are directly placed in their predetermined storage locations, reducing search time and errors during picking, optimizing inventory management, facilitating accurate tracking, and enabling streamlined operations.

How do you receive inventory?

To receive inventory, verify the shipment against the purchase order and packing slip. Then, inspect items for damage or discrepancies. After that, Unload and count the items, update inventory records and store the items in designated locations. Also feel free to communicate any issues or discrepancies to relevant teams.

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