Is it time to implement a WMS?
Warehouses and distribution centres are dynamic environments where many different challenges arise. Sometimes those challenges become overwhelming, and start to seriously impact the performance of the business. A Warehouse Management System (WMS) can help a business with many of these challenges, yet many smaller and medium sized businesses hesitate to move from a manual paper based approach to even a rudimentary WMS, based on fears about cost and disruption.
At the same time, companies such as Amazon are seriously raising the bar on rapid, error free fulfilment at extremely low cost per unit. Consumers have come to expect that orders will consistently ship the same day, without mistakes or any wrong items. Top retailers are also very demanding, with serious deductions and chargebacks for mistakes. Any business, including a small business, that is slow or sloppy in their warehouse and fulfilment operations, risks losing customers to those that can execute well.
How does a business know when it’s time to take the plunge to implement Warehouse Management System (WMS) ?
Here are eleven signs that it is time to seriously consider making the move to a WMS for your warehouse or DC:
1. Not fulfilling daily orders
One obvious indicator is not being able to complete the day’s orders. In other words, you are not managing to process all the orders coming in, in a timely manner– which is especially relevant if timescales are tight and products need to be picked the same day. This problem can also occur because of another issue – stock is difficult to find. Not having accurate visibility of where stock is located in the right quantities means you are relying on the knowledge of your operatives to find stock around the warehouse, which will cause problems if they are on holiday or during busy times.
2. Running out of room
If your warehouse or DC is perpetually overflowing, with hardly room to maneuver, the immediate reaction may be “we need a bigger space.” However, a properly implemented WMS, combined with optimising the site’s layout and processes, can generate higher throughputs from the same space, postponing the move to a bigger space even as your business grows.
3. Increasing customer returns
Many companies, especially in the fashion industry, expect a high level of returns because they are selling products that customers will buy multiples of, with a view to returning any that are unsuitable. However, what about if the returns are occurring because you have shipped the wrong items? Unless it is part of your service offering, any company with a returns rate of 3% or more needs to question why. Is the issue arising because of poor picking and dispatching accuracy? Could it be resolved using technology to improve control over the process?
4. Time spent on staff training
High levels of forecasted growth or peak seasons usually mean more people being employed and trained. Are you spending hours training new staff for these peak times? With technology to automate the key processes and improve efficiency, you will be able to achieve your objectives without the need to increase headcount significantly and reduce time on training.
5. Seasonal demands taxing your current staff levels
Linked to the previous point, most companies experience demand seasonality of some kind and a requirement to employ extra staff to cope with busy periods in the warehouse. Annual festivals, such as Christmas, Easter, New Year and Black Friday, plus seasonal weather changes, create sudden peaks and can bring training and productivity problems. Employment costs increase because extra people are needed, many of whom are untrained and will need time to get up to full speed.
Unless your company completely avoids any seasonality, this will be an ongoing problem. A WMS can relieve this situation by enabling your warehouse manager to identify how to do more with the resources already available.
6. Administration draining your resources
How much time should your warehouse manager be spending on administration? The answer always depends on the size of your business. But if your staff are spending a disproportionate amount on administration – reporting and planning, processing orders, manually inputting information into the system – you need to question whether it is time well spent.
7. Spending a large proportion of time fire-fighting
Warehouses are dynamic environments and a certain amount of unexpected problem solving and trouble shooting will always be required. That is normal, but longer term problems occur when your people are treading water on a permanent basis and spending more time dealing with anomalies and queries than doing the job they are employed to do.
8. Audit requests compliance
Demand for traceability at all levels has increased. This is due to a requirement for safety compliance, product recall management and also an expectation among customers for greater product provenance information. Although not impossible, it is very difficult to achieve and manage product traceability records manually on paper and requires the highest levels of discipline.
It is also increasingly common for your customers to request an unannounced audit and require an immediate report showing all stock deliveries to verify the provenance of raw materials. This is especially common in the food industry and a decision making factor for many firms.
9. Quality control and processes
Linked to the issue of time spent on admin is the increased requirement to invest time in auditing warehouse processes. If your company needs to double check your processes and employ additional staff to complete quality check procedures, it’s a good indicator that technology would be a worthwhile investment. This will ensure that greater accuracy (i.e. quality) is built into your processes from the beginning and will not require double checking by a member of your team, saving time and reducing staff costs.
10. Warehouse metrics slipping.
On Time In Full (OTIF) is a classic metric that immediately highlights whether procedures could be improved with the addition of a warehouse management system (WMS). In addition, the percentage of returns being processed is another classic indicator. With the exception of the apparel industries, a returns rate of higher than 3% highlights a picking accuracy problem that can be addressed with technology.
11. Second guessing daily processes
Overall, when problems like the ones described in this article occur over a longer period of time, it creates a lack of trust in the warehouse process. People from across the business stop believing their operational reports and question the accuracy of information arising from the warehouse. Customer satisfaction levels drop, service level agreements cannot be met and the warehouse gets the blame.
If you are experiencing even one of these symptoms intensely or several of them moderately, then it is time to take a serious look at implementing a WMS. Postponing implementation of a warehouse management system may be costing your business in many ways, including higher labour costs, chargebacks, expedited shipping, excess returns, unhappy customers, and ultimately slowing the growth of your business.
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.