In my last post (which I admit was a while ago) I outlined four simple ways a WMS solution can be paid for. In this post I will discuss the first way, reduced stock.
It may seem obvious that if you reduce your stock levels you would probably save money. But how to do this without causing disruption to fill rates and customer service is a key issue. With real-time and online data collection that a WMS like Accellos One Warehouse provides, inventory accuracy can be drastically improved. This leads to a significant improvement in stock location, quantity and lot/serial number accuracy, as well as reduced “buffer” or “safety stock” levels. If you reduce your inventory value while maintaining adequate stock levels to meet order demand you can save a tremendous amount of money and in addition reduce carrying costs as well.
Lets take a look at a simple example. Let’s say you carry 5,000,000 dollars of inventory. And you find a way to reduce that by 4% to 6% Industry average range when implementing a WMS) you could save $200,00 to $300,000. Carrying cost range from 15% to 25% so if yours is say 20% you will pocket $40,000 to $60,000 dollars. This will go a very long way in helping you invest in a system that will produce for you these kind of results.
In my next post I will discuss how reducing or reallocating labor will help you pay for a WMS solution. stay tuned!!
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