Exploring the benefits of a warehouse management system are imperative for businesses experiencing growth. Growing businesses with on-hand inventory will benefit greatly from using a warehouse management system (WMS). The WMS will benefit their operational efficiency for both labor and physical space by monitoring work processes at various levels, enhancing productivity, and increasing asset utilization. WMS automation assists with inventory control in a way that improves accuracy, throughput, and speed. A warehouse management system benefits an organization in many ways- some may be obvious, but there are also secondary benefits that we have highlighted below.
Benefits of a Warehouse Management System
Benefit 1: Optimized Space and Lower Operating Expenses
Warehouse management systems optimize warehouse flow by analyzing the best use of floor space based on the task and material characteristics. In the WMS implementations, the use of space and floor plan analysis is used to determine how space should be best used and provides opportunities for reducing waste – waste of premium floor space and waste of time for locating product. This will also lessen potential cost resulting from excessive material movement, time consuming placement, and retrieval. By considering the best locations to store products, as well as materials or equipment, a warehouse can lower its operating expenses.
WMS solutions can also help maintain material rotation, whether through first-in, first-out (FIFO), last-in, first-out (LIFO), or first-expired, first-out (FEFO) practices. Whatever rotation rule is required, the WMS can help the rotation. Typically, LIFO enables cost-effective use of space, and movement. FIFO or FEFO can maintain product quality for items from aging out in the warehouse. Some solutions have additional fuzzy logic so that a slightly relaxed FIFO or FEFO reduces additional moves, for example: products that expire in the same month may be considered both eligible to be picked. A warehouse management system operates with versatility and flexibility, making it easy to form any necessary adjustments to maintain best inventory floor location selection, choice of the correct inventory to pick, and help manage physical movement and worker performance.
Benefit 2: Inventory Visibility
Using a warehouse management system will also provide visibility of accurate, real-time inventory levels. This enables a company to more securely estimate supply and avoid backorders, which leads to more satisfied customers. Using WMS automation with scanning, RFID, or other location tracking methods ensures the visibility at the location and reduces the non-WMS enabled situations where inventory becomes forgotten, lost, or misplaced within the warehouse.
Warehouse management systems work in conjunction with the enterprise ERP and planning functions to provide demand to forecasting functions by sharing precise information about how certain products are performing. Product demand and seasonality is reflected as items are transacted and information communicated. Therefore, with this information, planners can make reliable decisions about which products to adjust for the company to increase revenue or mitigate losses.
Benefit 3: Effective Labor
Considering workers’ skill levels, their proximity in the warehouse, their equipment, and available warehouse tasks, a warehouse management system can better assign the right task to the right person at the right time. Optimization of travel time within the warehouse is one of the greatest benefits that the WMS can provide to improved labor utilization. The WMS can focus labor on highest impact activities while finding the most well-suited laborer to perform a specific task. Using labor forecasting, the system can assign jobs on a day-to-day basis and efficiently design schedules. Scanning items during their entry into a warehouse, as well as throughout their movements, can eliminate the need for work to be double-checked, saving time and speeding up the recording process. Scanning improves pick accuracy, reducing mis-picks, thus providing better customer service. KPIs can also be utilized to analyze staffing, which is important because labor is often one of the highest costs of warehouse operations. Labor efficiency, equipment efficiency, and space efficiency are optimized through appropriate work assignment.
Benefit 4: Traceable Materials
Inventory materials can be easily traced with warehouse management systems using lot, batch, and serial numbering. Lot/batch numbers indicate the group in which materials were made, and the serial number identifies an item specifically. By use of WMS inventory tracking as previously noted, the ability to match specific lot/batch or serial numbers with incoming receipts and outgoing shipments allows for full traceability. This ability to trace materials lowers any potential redundancy, enables accurate inventory planning and allocation, and provides current retrievable information for either future traceability, service maintenance, or recall situations.
Benefit 5: Optimized Supply Chain
A warehouse management system optimizes a warehouse’s internal operation which can then extend to the broader supply chain. Within the warehouse, a WMS streamlines the entire warehouse process from inbound receipts to outbound deliveries improving operational efficiencies and reducing costs. Warehouse staff achieve fast and accurate shipments by reducing or eliminating unnecessary or non-productive activity. These savings in time and cost coupled with improved processes and information can then be passed along to internal and external partners enabling them to improve their own operations. For example, improved inbound receiving reduces delivery times, enabling delivery partners to better leverage their equipment and resources and shippers to better manage inventory levels. Improved data can reduce risk and increase reliability, benefiting shippers, suppliers and customers. Data can be shared and leveraged back to an ERP or to a customer, as well as to a TMS (Transportation Management System). Product can arrive to its final customer more quickly while allowing the partners upstream to improve planning. Inventory fulfillment service can be aligned to inventory management; enabling optimized operations while reducing time & inventory carrying costs.
Benefit 6: Internal Automation Benefit
Warehouse management systems are the enabler to leveraging additional automation technologies within a warehouse. Mobile devices can automate internal work assignments and support a transition from paper to electronic work and activity recording. This simplifies processes which increases ability to scale and ensures information accuracy. Mobile pairing with the WMS system can allow the input process to be expanded, as access can be provided through handheld mobile devices.
Automation supports ongoing improvement in existing operations through improved strategies. There are many different levels of automation available, from automated picking and packing, robotics, analytics driven movements and AI. Warehouse management systems support these strategies by providing the foundational elements to capture, record and communicate activity. For example, sensors, barcoding, pick-to-light, voice, and automated carousels can all increase throughput when integrated to a WMS by monitoring picking and packing activity. Use of robots and automated conveyors can streamline operations and reduce bottlenecks.
Benefit 7: Effective Shipment Management providing better Customer Service
Inbound and outbound planning can be efficiently managed with a warehouse system that can adjust movements of inventory and equipment. As inventory is scheduled for arrival, the exact date and time can be optimized, considering available labor and equipment for storage tasks. There is ability to plan both receiving dock doors as well as outbound shipping docks with WMS solutions. Some WMS solutions also connect to transportation management solutions (TMS) to further optimize the supply chain processes.
Warehouse management systems can also pick and pack products more effectively, as managers can choose between zone, batch, or wave picking in a way that lowers any holdup or issues caused by traffic or ineffective employee locations. These picking efficiency options provide faster customer order cycle time and thus improve customer relations. Additionally, due to the inventory tracking and packing options, customers can receive early notification of shipments and how the materials are coming. The connection of customers with advanced shipping notices is better enabled with the WMS solution.
Benefit 8: Ongoing Improvement
As a valuable technological tool, warehouse management systems are designed to enable continuous improvements. The system can be implemented in phases to allow ongoing updates with newly developed features consistently, keeping warehouses efficient as they keep up with current changes. This also allows for the warehouse to incorporate new processes and innovations over time. And, if the warehouse management system is based in the cloud, it can update instantly, which can help reduce the need for large, expensive IT teams.
Warehouse management can help companies maximize profitability and alleviate error. However, the potential obstacles to getting started with a new management system can be daunting. Clarkston can help you navigate any challenges to obtain these benefits by using our industry expertise to best assist with your implementation of a warehouse management system.
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Contributions by Robin Dolan and Courtney Loughran.