Running a business involving the storage of goods is not the easiest. Inventory control is a hard task to do but must be done anyway. Supply and demand must be balanced for the organization to be sustainable.
The sales team has to get enough supply to sell. On the other hand, the procurement team must ensure enough stock is ordered from manufacturers. The goods shouldn’t be excess so that the business doesn’t keep expiries or dead stock.
Managing these logistics can be a hard task if the right procedures are not followed. That is why a proper warehouse management system (WMS) must be put in place for faster and proper decision-making. The WMS helps optimize warehouse functionality and that means a proper balance between demand and supply.
When the two balance, you get optimum results. That means reduced expenses and losses as the sales and profits increase. Here are some of the features of a Warehouse Management System.
What is a Warehouse Management System?
A warehouse management system (WMS) is software designed to oversee operations in a warehouse. It helps optimize the warehouse’s efficiency by monitoring location, inventory, receiving and release of goods, tracking products from one stage of the process to the next, and coordinating movements of people and materials.
Warehouse management systems provide data on how much time it takes to get certain tasks done. For example, it may show that an item should have been released at 12:45 pm but was not released until 2:30 pm due to transport delays. Warehouse management systems also enable companies to organize their inventory in a way that helps them reduce costs while improving productivity. While the concept of WMSs has been around for many years, these systems have not yet come into wide use on a global scale. This is mainly due to the challenge of making it work on a process where the product is picked up at random. The traditional WMS software would require rearranging products to optimize picking, but this is not possible in the case of supermarket goods that are covered by consumer protection laws.
Manufacturers can also benefit from WMSs. A good example is an automaker whose manufacturing process requires the paint job on cars to be double-checked before they can be shipped out to dealerships. A WMS can be used to track the location of a car so that it is always in a position where a paint inspector can check its final coat.
A warehouse management system is a software platform designed to aid warehousing and logistics. It manages data from activities such as receiving, storing, picking, packing, and shipping. These activities are handled by human beings at the beginning of the process but become increasingly automated as they proceed further along the process chain. WMSs aid this workflow by suggesting ways to optimize the handling of materials and thus reduce costs without hindering productivity or compromising on quality.
History of Warehouse Management System
The concept of Warehouse management Systems has been around for decades. The first internationally recognized WMS was developed by Richard Brodie in 1964 known as Richard Brodie System (RBS). However, it was not until the 1980s that the concept of Warehouse Management Systems became popular. This was because computers had become sufficiently powerful to handle large quantities of data and optimize the workflow.
Another factor responsible for the development of WMSs is retailers outsourcing their warehouse operations to dedicated third-party logistics providers (3PLs) who provide a wide range of services, including transportation and storage. Within a short period, this outsourcing became a significant area in logistics with 3PLs handling more than 60% of all warehousing activities within the US.
Order & Fulfillment management
This is the backbone of warehouse management. Clients place orders and expect their demands to be met. Some goods are regularly bought and will need routine replenishment. The WMS has this feature for sustainable supply and resupply of goods that have been supplied but need more supply.
Previously, this would be a manual process. With the automation of the process, things have become easier and more efficient. This has also saved those that would do the inventory management some time.
Even with the automation of the process, some concepts stand. For instance, a warehouse that operated under the FIFO strategy will follow the same. If it was LIFO, the same would still apply. It’s only that the repetitive manual process will be automated.
In operations, some issues arise. That is why compliance is a must. The system ensures that supply meets demand but in a compliant way. You also do not want to get into problems with the auditors because some standards were not met.
Quality control, serial tracking, automatic re-ordering, inventory availability, and many others are some of the functions taken care of by this system. Replenishment and electronic ordering are also a function of the WMS.
Backups and integration
WMS is used differently in different organizations. For instance, in a hospital setting, treating patients is the core mandate. Patient-to-doctor consultation is a daily routine at the front desk. Lab technologists need reagents to run lab tests as pharmacists continue to order medicines for supplies to patients.
The front team uses a customer-friendly interface to deal with the clients. That means, a separate software from the main WMS. Therefore, there’s a need for integration.
The WMS should have the ability to integrate with other software for easy operations. Besides, they should have connections to allow for the backing up of data.
Power blackouts give room for loss of data. When that happens, all the data should have been backed up so that no detail is lost. Stock management can be a hard task to perform in the case of regular loss of data.
Most WMS developers allow easy connection with accounting software like QuickBooks. Other software that allows smooth delegation of tasks like V-Tiger CRM should also be integration-ready for easy connections.
When we refer to backups, you realize the cloud is the way to go. Most organizations have already completed the digital migration while others are still on the way. For some, that’s not the situation but maybe a plan for the future.
A proper WMS should be linked to the cloud and set to auto backup information. This real-time backing up of data is crucial to protect already stored data. Cloud storage also allows easy retrieval of information.
When running a warehouse, it can be overwhelming to do business by yourself. That is why you may need third-party assistance. Outsourcing is a great decision if things are done correctly.
For instance, truck drivers and truckers could be outsourced. This will incur costs but at a lower rate than hiring staff to perform the same tasks. Managing the processes can be done using the WMS. And that is why the system should be ready to integrate with other software for smooth transactions.
Employees are everything. That does not mean an organization 100% relies on employees. It means that you can perform better if you get the right employees to work for you.
And even as they strive to deliver the results, you must also deliver your part of the bargain. The employees owe you their time and effort. Hours tracking will save you and your business unnecessary politics.
But, it is not just about showing up. The employees must perform whenever on duty. The WMS has a labor-management system that ensures the employees´ efficiency is well recorded. Labor forecasting is also important.
You have to know the future of your company and that of your staff. There has to be a balance for your business to be competitive in the future. That means empowerment and encouragement of your team to pursue more courses.
Many times, the WMS will either slow down or underperform. When that happens, there’ll be a need to solve the hitch. Sometimes, the downtime happens at the most critical times just when the clients want their supply.
There should be support features to allow for timely solutions. Email and phone supports are reliable methods to do this. Some WMS also have live chat support and training programs.
It is important to understand that sometimes it isn’t about the software but the staff handling the program. There often needs to be regular training to ensure that the operators have sufficient skills to handle the task at hand.
Advantages of Warehouse Management System
Using warehouse management systems has many advantages over traditional methods of organizing and managing warehouse operations, these are outlined below.
- Saving money is the main reason most companies have for adopting a warehouse management system, particularly because of the low cost of WMSs. WMSs typically cost between $5,000 and $25,000 per location. They can also save companies up to 15% on their costs. For example, they typically reduce ordering time by 50%. Another advantage is that they provide visibility of warehouse inventory levels to people who need it immediately throughout the warehouse operations network which helps with ordering decisions at all stages in the process. Another advantage is that product can be tracked as it moves through the warehouses with bar-code scanners showing where each item is located at all times.
- WMSs also reduce the time needed to find products. Because of this, more of the labor involved with finding products can be automated.
- Reducing costs is another advantage of using WMSs for warehouse operations, particularly since the concept of WMSs has been around for many years. For example, a company can save on labor costs by identifying areas within their warehouse where they are not fully occupied and having them empty during off-peak times. Aside from this, some companies have reported that they have significantly reduced their transit costs with WMSs because they can optimize transportation routes based on the location of customers.
- Reducing the amount of power needed to run a warehouse is yet another advantage of using WMSs. Because they can take inventory data from individual bars throughout the warehouse, they are extremely efficient because they can make decisions on where items should be located without taking into consideration other factors such as where the available power supply is located.
- Reducing losses due to accidental damage is another advantage of using WMSs for warehouse operations, particularly since there are now advanced systems that can identify where products have been damaged or accidentally damaged. For example, if an item is damaged through shipping then it will automatically be moved to a storage area instead of being kept in stock.
- If it is damaged by staff then it will also be moved to a storage area. This way, companies can prevent losses from accidental damage.
- Warehouse management systems are designed to help companies improve their logistics processes by reducing costs, reducing loss or damage, and enhancing efficiency. They can provide these advantages by automating the handling of the warehouse resources to maximize efficiency. The main advantage of using warehouse management systems is that they can automate many of the manual activities that have always been involved with the management of these resources.
- Warehouse management systems are also able to maximize the efficiency of WMSs. For example, warehouse management systems can provide an improved process for packing because they can identify opportunities that improve efficiency.
- Warehouse management systems can reduce the time required to find products. This is because bar codes can be used to identify individual items and their location in a warehouse. This means that they can be guided towards where they need to go very quickly and exactly where they need to be without human intervention.
WMS has seen the automation of the warehouse management process. This has seen businesses save time and avoid losses. The result is an increase in profits and motivation of staff who now enjoy working with smoother processes.
With the development of more software, there’s an improvement in the features and more productive systems put in place. With more integrations, more sophisticated yet user-friendly and more efficient systems will come up.