Cost and Care: The Benefits of a Warehouse Management System
Dec 20, 2013 Comments (0)
A strong warehouse management system can save supply and fulfillment options significant time and money – which we all know really means saving money and more money.
Integrating a WMS with current operations allows a manufacturer or supplier to control the flow of goods through the supply chain, while tracking and tracing goods at every step along the way. A WMS can serve as a critical piece of an overall warehouse and operational management strategy; for most it’s an opportunity for significant improvements now at an affordable price.
When looking directly at the integration of a new warehouse management system, three benefits are top of mind:
1. Improved use of labour.
Your warehouse management system can optimize your inventory in terms of storage and the amount of labor you use to keep your operations running. Initially this may be seen as a way to reduce hours in general or to cut down the workforce, but you should also look at this as a way to provide better conditions for your workers.
Amazon’s distribution and fulfillment centers have seen worker strikes over both pay and working conditions. The warehouse is the operational backbone, crippling efforts when disruptions hit. Optimizing your warehouse for the sake of improving your labor can reduce how much your workers walk or lift.
Using a WMS as an opportunity to improve working conditions and will be seen as a good-faith gesture by your employees.
2. Decreased manual processes.
Inventory management can be labor intensive on the documentation side of things as well. Warehouse operations can create mountains of paperwork very quickly, and manually reentering that information can cause even further slowdowns in your day-to-day processes.
Reports currently created manually can also be automatically generated and checked. A strong WMS can integrate all of your scanners and tracking technology such as GPS and RFID, creating a single information source and a single report platform.
You’ll be able to manage your inventory and workflow with operators focusing on important tasks instead of triple-checking Excel spreadsheet cells.
3. Traceability of goods throughout your warehouse.
Certain goods have a limited shelf life and a WMS can be programmed to manage this expiration timetable. This can automate the selection process of your shipments, always making sure you first ship goods that are time sensitive.
This is the most significant benefit of a WMS for the food industry, but recording inventory time stamps can also provide you with historic data on specific goods, their average storage time and when you may have secondary spikes of interest during the year.
Since a WMS will store all of this legacy data for you, annual reports on goods can be quickly created to show you unusual spikes in demand. This allows you to prep your warehouse ahead of time for coming seasons of high or low demand.
The best news about the modern WMS is that they are heading to the cloud. This allows smaller shops, as well as large ones, to order a system on a pay-per-use model. These models scale cost with how much data they’re managing, but also provide some cost savings by reducing the amount of infrastructure you have to install.
Cost-savings is an easy reason to invest. Beyond its benefits of labor and paperwork reduction, a WMS also helps to significantly boost accuracy of warehouse management. Automatic data entry can reduce human error due to mistakes, fatigue, or even fingers that just don’t seem to fit on our ever-decreasing screen sizes.
Accuracy is a pretty amazing cost saver. According to RedPrairie, it costs roughly $200 to correct a shipping error and many in our industry see annual costs related to shipping errors reach as much as $30,000.
If a WMS can eliminate nearly all of those errors through automatic inventory tracking and order verification, it pays for itself in short order.
Philip Odette is the CEO of Global Supply Chain Solutions (GSCS) and passionately pursues enriching the lives of its stakeholders while developing the supply chains of its customers. GSCS has optimized hundreds of high-tech companies’ supply chains, enabling them to become the leaders in their respective market space. Philip serves on the board of several other entities, striving in each instance to…