If your business uses warehouses to store and distribute product, consider these questions:
- How are your warehouses handling growth and change in your business?
- Are you taking steps to optimize your inventory management and reduce wasted space?
- What are you doing to make it easier for your warehouse employees to do their jobs?
You’re not alone if you don’t have easy answers. For many businesses, supply chain and warehouse management is still a reactive process rather than a proactive one. However, that’s changing quickly with the widespread adoption of warehouse management systems.
A Warehouse Management System (WMS) is software that turns your warehouse into an engine of digitized 21st-century commerce. Some of the key functions of a WMS include:
- Inventory tracking and management,
- Labor management and allocation,
- Bin layout optimization,
- Paperwork management,
- Reporting and KPIs.
With all that functionality, it makes sense that a good WMS doesn’t come cheap, and all of them take some work to implement. However, your organization can reap considerable benefits from these systems that make the costs more than worth it. Here are five reasons your supply chain will thank you for making the investment now.
- Human error is natural — but you can’t afford it.
PeopleVox’s 2017 E-Commerce Fulfillment Report found that 46 percent of respondents identified human error as their greatest obstacle to an efficient receiving process. It’s true, of course, that we all make mistakes. But in the era of one-click ordering and Amazon Prime, it’s more essential than ever that your warehouses keep up the pace, and human error incurs significant time costs.
Manual tracking systems such as Excel or pen and paper offer few ways to double-check anything meaningfully. They also tend to be particularly time-consuming and intimidating for new employees. A properly implemented warehouse management system can decrease pick times, streamline receiving and enable new employees to hit the ground running. Human error is a variable that every business has to deal with, but a good WMS will put the power to reduce it in your hands.
- A warehouse management system helps keep up with growth.
You’re focused on growth, so make sure you have the tools to manage it. Growing pains almost always accompany sustained growth in business, and they can come in forms you don’t expect. Maybe your warehouse isn’t ready for the intense demand that accompanies introducing a seasonal product. Or perhaps your layout is optimized for shipping drums, but your warehouse suddenly has to start shipping IBC totes as well.
These gaps between demand and capacity can lead to all sorts of serious issues, including losing customers and supply chain breakdowns. To avoid these problems, it’s important to invest in infrastructure that gives your business room to grow. Implementing or upgrading WMS software is one of the best investments you can make for your company’s future growth. With a functional and flexible WMS, your employees will have the tools to manage growth in both demand and supply.
Also, keep in mind that it’s not just software that might need upgrading. You may also need to invest in better hardware to get the most out of your WMS. Many WMS software options include advanced mobile suites that leverage devices like smartphones and tablets to streamline warehouse operations. If you haven’t found the budget yet to upgrade that warehouse desktop with the outdated OS, the time to do it is before you need to.
- You’ll be able to see, track and use KPIs in a more focused and effective way.
Most businesses monitor warehouse KPIs, but if you don’t have WMS software, you may not be getting the full picture. Plus, a WMS gives you the tools to take action on your KPIs, not just track them. It’s a vital tool for piecing together the holistic picture of your KPIs to see how they’re affecting your bottom line.
Real-time metrics tracking can identify common trouble spots and empower you to create strategies to deal with them. If pick times are lagging, you can look at specific items that take a long time to pick and work with your warehouse team to speed up the process. Having consistent problems with damaged inventory? Your WMS software can help you identify patterns so you can optimize shipping materials to address the problem.
- It makes it easier to coordinate with carriers and control inbound and outbound freight.
Handling the paperwork for inbound and outbound shipments, such as bills of lading, is time-consuming for warehouse staff, and it’s just as subject to human error as anything else. Most WMS systems allow warehouse and logistics employees to automatically create and send bills of lading, shipping manifests and other essential supply chain documentation. The decrease in paperwork and the accompanying paperwork mistakes makes life easier for both your employees and your freight carriers.
- It makes just-in-time inventory management possible.
Just-in-time inventory management (JIT) is a strategy that many businesses use to reduce the amount of inventory they have to store. Businesses using this strategy order products and materials largely on an as-needed basis, rather than holding significant stocks in reserve. It’s a proven method for cutting down on storage costs and unsold inventory.
JIT can be extremely effective, but it comes with significant risks for companies who don’t have the data capacity for accurate demand forecasting. A WMS is an essential part of a JIT strategy because it provides detailed data on what moves and what doesn’t. If you’ve been struggling with slow-moving inventory and high storage costs, a JIT system powered by a high-performance WMS is a great option to look at. Just make sure the system you choose includes a robust forecasting function.
Dozens of great WMS options are now on the market. Some are flexible enough to accommodate nearly any type of business, while others are focused on certain models. It’s safe to say, however, that one of them is right for you. Whichever one you choose, remember that it’s an investment not just in what your business is now — but in what it can be tomorrow.
One reply on “Six Reasons to Invest in a Warehouse Management System”
Why invest in a warehouse management system when you can just hire a team of highly trained squirrels to organize your inventory? They work for peanuts!