Is the running of your warehouse giving you endless problems? Warehouse management systems (WMSs) offer strong returns on investment (ROI). Is this the solution to your warehousing problems? Does your business need a WMS?
Your warehouse is a mess. Inventory is being misplaced, your customers are complaining about receiving the wrong shipments, and your warehouse employees are working overtime to keep up with demands. How can you reduce lost inventory, and mistakes and, use employees efficiently? The answer is a warehouse management system (WMS).
A WMS is a set of software that manages, tracks activities and automates the flow of all materials and information through a warehouse. WMSs are responsible for managing every step a product takes from the moment it enters the warehouse to the moment it leaves. WMSs must interface with host systems, like enterprise resource planning (ERP) or legacy systems. ERP is a broad set of activities supported by software that helps businesses manage information with different segments of the company. An ERP system can provide information on inventory to the accounting department in real time.
Essentially, WMS provides the foundation for sophisticated warehouses to operate efficiently.
Does Your Business Need A WMS?
Answers vary from vendor to vendor regarding who needs a WMS. Generally, the size and complexity of the warehouse go a long way to determine the need.
WMSs can be as simple or technical as needed to fill your company’s requirements. Standard components are defined by the complexity of the industry, company and warehouse where the system will be installed. These components can include:
- inventory management
- put away
- planning and picking processes
- packing and shipping
- quality control.
Core components depend on what the end user is looking for in a solution. WMSs are needed to manage complex supply chains. For example, companies that deal with large amounts of products within the supply chain can be linked with other companies’ supply chains and possibly another company’s transportation provider.
Value-added services include the areas where distribution centres are taking steps to make products store-ready. The distribution centre can include services like ticketing and special packaging. Data mining and analysis can also be considered an extra component.
WMS contains many transactions. These transactions are logged. With the right software tools, end users can see areas needing improvement, such as increasing employee productivity or order picking. This function is becoming popular.
Within these WMS components there are standard technologies. These include:
- automatic identification and data collection (AIDC) products such as bar codes, bar-code printers, handheld scanners and fixed-mount scanners
- radio frequency identification (RF/ID) technology and radio frequency data collection (RF/DC)
- the Internet to access and provide information to the WMS inside and outside of the distribution centre
- electronic data interchange (EDI), the electronic communication of business transactions, such as purchase orders, invoices and order confirmations
- automated material handling technology, like carousels, conveyors and automated storage/retrieval systems.
Looking for a Solution
There are a variety of ways end users can start searching for a WMS to fit their warehouse needs. It’s easy to get excited about new technology and run out to purchase the newest systems without understanding what they do. The search should begin by defining the business processes within the warehouse. Then define how those processes can improve business.
The next step is to choose a system with capabilities that map these processes. End users must take care not to get caught up in the trap of using automation for automation’s sake. Sometimes, additional automation heightens risk instead of adding value.
If an end user is making significant changes like building new warehouses or designing a new delivery channel, then it would make sense to employ a consultant. These people are trained to look at business goals and help end users make selection processes down the road.
Make sure the consultant has the expertise to handle your WMS and is not trying to push one product. The consultant is there to document and analyse your business processes and bring three to five viable vendors to the table. When consultants accomplish this, they have done their jobs.
Seeing a Return on Investment
Return on investment (ROI) from WMSs is seen in a variety of ways. Five areas where ROI can be tracked are:
- Inventory savings – WMSs provide a reduction in carrying costs, lost inventory, scrap, and stolen inventory.
- Labour – End users forget that the alternative to a WMS is a paper-based system run by an office full of staff. Labour can be moved out of the warehouse and into other departments in the company because the WMS gives instructions to employees instead of supervisors. Efficient businesses require fewer workers.
- Equipment – Efficient warehouses also need less material-handling equipment. This includes automatic picking equipment, tilt-tray sortation, conveyor equipment and automatic labellers. Less material-handling equipment is needed in productive warehouses.
- Facility space – By using space efficiently more products can be stored in the warehouse. Facility space and associated costs can also be reduced.
- Customer service – Item returns are reduced through shipping products accurately and on time. Reducing chargebacks, a cost associated with stopping shipments to check for accuracy, saves time and money. Having fewer chargebacks also reduce the labour needed to check each shipment. Chargeback reductions also eliminate the increased inventory needed because of slow-moving products filled with mistakes.
A modern cloud based system can offer the functionality to a small business that needs a solution without big upfront costs and long timescales. With effective handling procedures and advanced multi-location control, you’ll know how much stock you have and where to find it. You’ll be able to optimise storage space, increase pick efficiency and achieve near total despatch accuracy. A product that’s intuitive and easy to learn will need minimal time to commission, but once up and running it will deliver benefits which transform the efficiency of your business.
No matter the size of your business, a WMS is always going to be a smart choice.
While your WMS might entail a small startup cost, it will save you money as your business grows more efficient and productive. If you get a WMS that includes a mobile app, you won’t even need to worry about your system getting outdated, because the app will provide automatic updates.
The one thing you will want to keep in mind when shopping for a warehouse management system for your small business, though, is finding one that will grow with your business. After all, if your business becomes more efficient and productive, you’ll likely need to expand in the future.
Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.
Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.
ClarusWMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.