The days of lost or untraceable inventories should be gone long time ago. With effective software systems, professional management and expertise, the precise location, status, and count of every item in a supply chain should be instantly identifiable.
Right WMS allows for shorter lead - times, lower inventory levels, resulting in fewer errors, reduce emergency deliveries and can provide transparent interaction between warehousing services and their clients. Surprisingly, there are companies still operating with outdated methods.
What is WMS?
A warehouse management system (WMS) is a software application designed to support and optimize warehouse functionality and distribution center management. These systems facilitate management in their daily planning, organizing, staffing, directing, and controlling the utilization of available resources.
For example, WMS can provide visibility to organization’s inventory at any time and location, whether in a facility or in transit. It can also manage supply chain operations from the manufacturer or wholesaler to the warehouse, then to a retailer or distribution center.
Benefits of a warehouse management system
1. Optimized space & lower operating expenses
A well - developed WMS reduces operating expenses in a variety of ways. This type of system determines the most effective use of both work and space, which reduces waste. WMS software can help you determine where to keep certain materials, products and equipment to optimize the flow of your warehouse. Some advanced systems have warehouse floor simulators, enabling users to create potential floor plans within the system.
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. 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.
2. Inventory visibility
Inventory visibility is one of the most important components of warehouse management systems. WMS software provides real - time data on your inventory through barcoding, serial numbers or RFID tagging. All of these methods enable users to document each item as it enters the warehouse, all of its movements on the warehouse floor as well as its movement during transportation from one location to the next.
This type of visibility is necessary to create demand forecasts, which provide insight into which products are most popular with customers during specific times of the year. These forecasts assist leadership in deciding which products to invest in and which ones may be losing their place in themarket. Increased traceability of your inventory as one of many related WMS advantages is also extremely helpful in the event of a recall. Serial numbers placed on the final product enable users to track the item back to its original lot ID which then determines if the product is part of the faulty batch. Traceability ensures you only have to recall damaged goods, rather than any and all goods you suspect are tainted.
3: Efficient labor management
As you’ve already read, a WMS lets you freely determine which picking, packing and putting - away methods work most effectively for your business. In addition to helping optimize inventory placement and route creation, WMS solutions can determine the best employee for the job. Considering factors such as skill level, proximity and other tasks, WMS helps users assign jobs to each team member.
In addition to creating schedules and assigning daily tasks, WMS software can be used to gain a broader understanding of your workforce. Using labor forecasting and KPIs, warehouse managers can see when they may need more or less staff, identify top performers and seek areas of improvement. With labor costs making up 65% of the average warehouse budget, it‘s incredibly important to fully understand how those resources are being spent.
4: 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.
5: 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.
6: Continuous improvement
One of the most important warehouse management system benefits is consistent updates. Warehouse management software vendors typically introduce new features regularly to reflect current industry best practices. This makes it easier for organizations to stay on top of the latest developments and allows them to continually improve their processes based on these innovations.
With cloud WMS, continuous improvement is even easier. Updates and new features can be added to the system automatically, reducing the need for in-house IT staff. But businesses using an on-premise system may or may not receive regular updates from their vendors, depending on the terms of their contract. This is yet another example of why many buyers are moving to the cloud.
7: Improved relations with customers and suppliers
The benefits of warehouse management systems extend beyond the organization itself. With such high visibility of inventory and the ability to schedule the receipt of shipments, both supply and demand chains are optimized with the use of a WMS. One of the most obvious benefits for suppliers is the reduced wait at docks and loading bays. Customers enjoy overall improved order fulfillment, reduced delivery lead times and fewer order inaccuracies. The reputation of your business among customers and suppliers will improve under such a system.