Implementing a warehouse management system is one of the biggest “bang for the buck” things a business engaged in the distribution of products can do for their business. The profits that can be re-captured when a business becomes more efficient and productive can be staggering. Like wise when a business is not operating at top efficiency, is making to many shipping mistakes and is having problems with inventory accuracy and control it is most likely leaking profits. Sadly this can happen without knowing it. If you think all is well because products manage to get out the door in the warehouse it may be time to take a hard look at the warehouse operations.
Many times when talk with a business, they seem to understand the value in a WMS but can’t seem to see how to make the investment needed to pull the trigger and implement a solution. Here are four areas where a WMS makes a serious impact and can quickly create the return that will pay for a WMS
1. Reduced Stock (Inventory)
2. Reduced or reallocated labor
3. Improved shipping accuracy
4. Reduced space requirements
In the next series of posts we will dig into each of these areas and explore where the money can be found to pay for a WMS solution. For information on our WMS solutions click here. For more information on iCepts Technology Group and our other technology offerings click here.
With costs and competition rising faster than ever, only businesses that find new ways to improve and increase value to both their customers and shareholders will survive let only thrive in today’s market. Only certain activities within a business represent opportunities for adding value to the product or service the business provides. In general, these activities are profit-generators that can be distinguished from the overhead and support functions of commercial/wholesale distributors web-based retailers and company warehouses.
Value added functions often relate the specifics of a particular business. The following are some value-adding functions that are common to most business and should be familiar to anyone who depends on their warehouse as a critical part of their operation:
- Kitting Services
- Marketing and sales
- Inbound logistics
- Outbound processes
Warehouses are generally seen as cost-centers to a business and rarely are considered as an area for profit creation. Yet some businesses have discovered ways to turn their warehouse into a significant competitive advantage. Of the value-adding functions listed above, inbound/outbound processes relate directly to wholesale distributors or distribution centers. In addition the quality of these processes along with storing, delivering and moving inventoried products can impact sales, production and services in a positive or negative manner. In my next post I will discuss warehousing practices in the value chain and how a warehouse management system plays a significant role in creating revenue inside the warehouse.
Less than 30 percent of warehouses are efficient, according to “Benchmarking Warehouse Performance,” a study by Georgia Institute of Technology in Atlanta GA Efficiency translates directly into money. You may have been wondering if a WMS system could make your warehouse more efficient. Interestingly, about 30 percent of the warehouses in the United States have a WMS system installed. What are the numbers telling us? Only 30 percent of warehouses are efficient, and less than 30 percent of warehouses have a WMS system installed. Which 30% does your company fall into? If you are in the under 30% group that does use a WMS good for you. Most likely you are many times over more efficient than those not using a WMS to manage their warehouse operations.
Those numbers are telling me we can fix the inefficiencies or “lost revenues” taking place in over 70 percent of warehouses. These leaks involve serious money being lost and customers being poorly serviced. My point is this: There’s a lot of information out there on how to make your warehouse more efficient, but what you needs to realized is, “It’s not what you know that counts, it’s what you do with what you know.” Many companies already know their warehouse is inefficient, but are reluctant to make the move to improve due to what they perceive as a high cost to purchase and install a WMS. I would suggest they should take a very close look at the ROI that a good WMS can achieve. It might surprise many to find out that the initial investment can be recouped in a very short amount of time. If you own or manage a business that operates a warehouse which 30% do you want to be in??
Learn more about electronic warehouse management solutions by visiting http://www.warehouse-management-systems-us.com
Learn more by reading this white paper on How Goods move through an Accellos One managed warehouse
I am astonished on a weekly basis by the number of businesses I encounter that are still managing their warehouse operation with paper and pencil. In most of these companies I see well thought out processes to handle the many functions and activities in the warehouse. And while these processes do work and the products manage to get out the door, they are holding back the business from making higher profits. Why? Because they are extremely inefficient and inefficiency robs the company of hard earned revenue.
For companies that are in warehousing, distribution or manufacturing it is time to retire the pencil and paper and move into the 21st century. Today, with profit margins being razor thin and customers looking for the very best prices and added services you need to be as efficient and productive as possible. Your warehouse has to be profitable. No longer can you subscribe to the notion that if the products get shipped out then all is well. It is time to automate as many processes as possible.
Its starts with barcoding and with automating the receiving, put-away, replenishment picking and shipping functions by moving to an electronic warehouse management system. WMS solutions are no longer just for the big guns in the 3PL, wholesale distribution or manufacturing business segments. It is time for small and mid sized companies to adopt this technology. Frankly your customers demand it. It is my opinion (backed up by a plethora of industry statistics from the Aberdeen Group, Gartner and Supply Chain Management to name a few) that those that do not step up their game will be left behind. They will wonder where their customers have gone and why they are losing money.
I said earlier it starts with the barcode because the essence of a WMS is tracking very item in the warehouse and every task performed by scanning the barcode that is on nearly every product produced today. And should you actually have products without a barcode you can create one. In your warehouse you add barcodes to every storage location where product could be stored. The combination of scanning the product and the location of that product begins to create an efficiency and accuracy not possible in a paper and pencil, manually operated warehouse.
So take those well thought out processes mentioned earlier that you have been operating with and automate them through the use of a warehouse management system that best fits your companies needs and watch your profits rise. Small percentage gains in efficiency, accuracy and productive will add up to a significant return on investment.
To read more on optimizing ROI in the warehouse click here.
To Read a recent case study on how one company has improved their operation through the use of a WMS solution click here
Not all warehouse management solutions are created equal, the right WMS saves you time and money and ultimately increases your customers’ satisfaction. The key to choosing the right WMS is, will it help in maximizing customer service and satisfaction. A Best in Breed WMS will provide a spike in customer service, leading to greater customer satisfaction and increased profitability. Not having a WMS or one that is not meeting your changing needs means constant struggles to keep a stable customer base.
So, what should a best in breed WMS offer and what should you look for? Here is a list of things to look for.
- Maximum Functionality; will the WMS streamline operations and provide improved productivity Read more
- Ease of Use; if the WMS is easy for the warehouse staff to learn and use they will not look for ways to not use it or find work-arounds.
- Transaction Management; You want the WMS to track everything from the moment product hits your receiving dock until it is shipped out the door. And you want to be able to get easy instant reports on everything that moves and who is moving it in the warehouse.
- Flexibility; a good WMS will be able to grow with you and be able to meet new and changing requirements. Be sure to review what the plan is for future upgrades. Make sure the WMS can interface with today’s well known ERP solutions. One day you may want or need to move to a new ERP and not want start over with your warehouse management system. This is important.
- Useful Reports; data is important. Review the way the WMS provides that data to you. Are their easy to access reports? Does it provide a way to easily create your own ad-hoc reports? Does it have a business intelligence capability?
- ROI; this seems to be a horse that gets ridden too much. But, ROI for a WMS can easily be established and should be investigated and analyzed. Good WMS solutions can provide solid, real results from existing customers. Read more about ROI.
- Proven Track Record; a good WMS provider should be able to provide you with a viable list of references that are in the same or similar industry as you. If possible go for a tour of a business using the WMS and if possible one that in seamlessly integrated to the same ERP solution. Make a list of questions and get answers on the points I have listed.
The right WMS will save you time and money and ultimately increases your customers’ satisfaction and profits. The difference between purchasing the right WMS and the wrong WMS is simply a matter of knowing which questions to ask.
Read more on how a warehouse operates using a best in breed WMS
Implementing a warehouse management system is one of the biggest “bang for your buck” things a warehousing or distribution company can do for the business. Although I only list four in the post there are many other ways a WMS can pay for itself. These four are simple ideas, however many operations choose to continue running their warehouses with pen and paper even though their most successful competitors have made the investment done the work and are now reaping the rewards.
1. REDUCE STOCK. This may seem pretty obvious but many companies carry to much inventory in order to meet customer demand. This is caused by not knowing how much really is in the warehouse or where it is. Nor do they have an accurate idea of how fast they are turning over their products. With real-time data collection inventory accuracy will improve dramatically. This leads to improved item location, quantity etc. etc.
2. REDUCE OR RELOCATE LABOR. Overhead is costly. A WMS will help you see what work is being done, how fast and accurately it is happening and who are your stars. So much more will get done when you throw away the paper and pencil and use real time information to receive put-away replenish pick and ship your products.
3. IMPROVE SHIPPING ACCURACY. It is not uncommon to see a company using paper and pencil technology to have a high error rates on the orders they ship out. Even a company that boats 98% accuracy is paying a lot for that 2% error rate. Not just in the hard dollars it costs to fix the problem but also and potentially more hurtful in customer dissatisfaction. A warehouse management system is design to eliminate costly shipping errors and help you improve customer satisfaction and even obtain new customers..
4. SPACE UTILIZATION. A WMS will allow you to use the warehouse space you have more efficiently by helping you store your product better. Because you can see where all your product is and you can better decide how to use your racks and floor space. Wasted space and empty racks are used properly keeping you from having to add-on which saves thousands of dollars.
The time for achieving a return on investment (ROI) in a warehouse management system should be relatively short. Many companies find that the system can pay for itself in 6 to 9 months however 12 to 18 is a good rule of thumb.
So consider putting done the paper and pencil for a minute and find a company that will work with you to analyze your particular situation and see if it makes sense for your company to consider a warehouse management solution.
Download our complete whitepaper on <a href=”http://www.warehouse-management-systems-us.com/wp-content/uploads/2013/06/4SimpleWaysToPayForWMS-1.pdf” title=”4 Simple ways white paper”>4 Simple Ways to Pay For A Warehouse Management System </a>
Visit our website for more information on WMS solutions http://www.warehouse-management-systems-us.com/
I recently read a discussion board on LinkedIn that asked the question, what is your #1 problem in managing your warehouse? Answers I saw included;
- Aligning staff with work (labor management)
- Irregular inbound shipments & deliveries (receiving)
- Inventory mistakes (inventory management)
- Human errors (picking, put-away replenishment)
- Quality of workforce (employee accountability and productivity)
- Late and incomplete deliveries of products (shipping mistakes)
What I thought was most interesting about all the issues was these are the exact problems that a best in breed warehouse management system is designed to address and eliminate. The creation of a more efficient warehouse operation is the ultimate goal.
I have heard from many operations and warehouse managers that the fear they have is that all the processes that have been created to run their manual, paper driven warehouse will be tossed out when a WMS is introduced. This is not the case nor does a WMS just magically create processes for handling the work done in the warehouse. The goal in buying and implementing a WMS is to take the good processes already in place and make them more efficient, reshape the ones that are not as helpful and drop the ones that are causing profits to leak out of your operation.
If you compare the return that a WMS can give you against the investment you would make in purchasing and implementing a WMS solution you will see why successful, growing distribution companies are investing in this technology.
Read more on how a WMS operates inside a warehouse.
1. Picking: The Picking functionality in warehouse management systems is a core functionality designed to move the paper picking process to a wireless device. Warehouses come in different shapes and sizes. Some are “wide open” in a square shaped space. Others are contained in buildings on multiple floors, utilizing elevators to transport materials. Warehouses will have varying ceiling heights. Some might have yard space.Materials handling will differ by product shape and size.
As a result, the warehouse racking infrastructure will vary by product size. Many warehouses keep large products in bulk stacks or pallet racks. While with small products, picking efficiency may be increased by storing smaller products in flow racking or static shelving.
Product velocity and order types also affect warehouse layout and consequently the picking strategies. Companies that ship single-sku pallets of product to customers will have significantly different warehouse operations than ones that ship trailer loads of mixed-sku pallets (grocery is a good example of this).
Even subtle differences in customer requirements for consumer products wholesalers will have substantial effects on the materials handling and picking. Operations that ship to retail distribution centers will have different fulfillment requirements than those that ship directly to stores.
Accellos One Warehouse, an example of a “best-in-breed” Warehouse Management System, has an abundance of picking styles that will accommodate a warehouse manager’s fulfillment strategy independent of warehouse layout, product size,velocity and order characteristics.
Some of the many picking styles are listed below:
- Wave Picking
- Batch Picking
- Product Picking
- One Scan Picking
- Scanner Picking
In addition to picking styles, there are numerous benefits for having warehouse picking systems including:
- Multiple pickers can pick in a single sales order
- Single picker can pick on multiple sales orders
- Password protection for skipping and shorting picks
- Configurable worklow prompts for bin, packsize, and carton
- Ability to generate a packing slip after last pick
- Ability to assign orders to s specific user
- Ability to reapack item
- End of Line (EOL) workflow controls what additional processes happen to sales orders after they are fully picked
- And more, including additional advanced picking functionality
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Posted by iCepts Technology Group–A Pennsylvania Partner for Accellos One Warehouse Management Systems