How Warehouse Management Systems Help to Increase Efficiency by 25% and More
Managing a warehouse is not easy. It is necessary to plan shipment hours, unload incoming trucks in time, and reasonably place containers on the site so that they do not interfere with the work. They must be securely stored until the arrival of the carrier. You should understand what goods you need to load the arriving transport. Which batch, what expiry date, what quantity, what retail price? In addition to these daily operations, it is worth ordering new products when the stock runs out. A warehouse management system will help to organize the workflow effectively. In this article, we’ll touch upon the benefits of a WMS in the supply chain.
What is a warehouse management system?
A warehouse management system combines software, specific devices (for example, data collection terminals with a scanner), and IoT sensors to track inventory information.
A WMS helps the staff to organize the work of the warehouse so that the circulation of goods in the chain occurs continuously and without errors. It is important for the storekeeper to easily find the right cargo in a large room, check it by its serial number, barcode, or RFID tag, and determine when to prepare boxes for loading.
The system also allows setting up an uninterrupted inventory. You need not stop the warehouse processes to recalculate the products. The program automatically counts the amount of cargo as it moves. Accounting for goods takes place online 24/7. In some cases, racks and lockers may be frozen while the staff checks the quality of the products and expiry dates.
The WMS integrates with other systems (for example, enterprise resource planning software), runs in the cloud (software as a service) or on-premise (a logistics company maintains the platforms itself). The type of application is negotiated with a logistics software development company before the start of the project.
The reasons why warehouse management systems are beneficial for logistics
There are six reasons why logistics companies implement warehouse management systems:
Such software increases the inventory visibility
An application keeps track of each product, updating the data in real time. The storekeeper always knows how much cargo there is in the storage, where it is located, and when it must be loaded onto trucks. As a result, orders are fulfilled 17% faster than with the old system.
A WMS improves the warehouse flow
A WMS helps managers to distribute inventory on sites. The storekeeper knows which goods are shipped every day and which should not be “hidden” far from the gate. The workers know which products are not in demand in a certain season and where to place them before the start of sales. They also anticipate how to arrange boxes so that they do not interfere with moving around the warehouse in the future. By identifying the best places, the manager avoids situations when:
- unnecessary goods are stale, and there is no room for the relevant ones;
- boxes block the way to the cargo which must be quickly loaded onto the truck;
- the cargo must be moved several times from place to place to better position the boxes that have just arrived.
It automates billing
Some warehouse management systems have built-in billing modules. They are responsible for different types of products with their storage requirements. Accountants must set the time in the format required by the customer and issue invoices according to the client’s rules.
The system automatically creates a document, sends it to the customer by mail and keeps track of charges for each client. It predicts income per partner and performs other additional functions, regardless of the product type and the complexity of the logistics company’s business. Thus, the billing module saves warehouse workers time and money needed to perform work manually. In addition, automated billing is more accurate than manual billing. Employees do not have to delay payments due to bug fixes.
It improves prediction and planning
A WMS contains analytical tools that “process” archival data and help the manager to determine:
- what cargo is in poor demand;
- what product is ordered more often in a particular season;
- which supplier is delaying delivery;
- what products and in what quantity will be needed next season.
Every year, sellers lose $22 billion due to out-of-stocks. Using a WMS will help to avoid these expenses. The program will allow managers to adapt to changing demands and warn them about the upcoming large order.
It increases performance
Warehouse management solutions increase productivity in two ways:
- The application sets the staff work schedule. The software helps to analyze the history of operations and determine when more workforce is needed to cope with the increased amount of work.
- The software functions together with IoT and other devices. Workers use them to scan QR codes or RFID tags when goods arrive at the warehouse. One does not need to register and count the cargo manually. The cargo moves through the warehouse faster, and there is no need to stop the warehouse processes to make an inventory. The shipment occurs on time and without errors.
It ensures prompt order fulfilment
In 2021, 36% of online shoppers preferred same-day delivery, which is becoming the norm. The staff need to keep up with the trend by streamlining work. They need to collect and ship orders faster which can be done with the help of a WMS.
An example of a WMS implementation
A logistics company used a turnkey warehouse management solution. But it lacked the functionality that would help to manage internal processes more efficiently. So, the organization ordered a custom WMS application from a logistics software development company.
The development team created a WMS with modules for picking/packaging, order management, electronic data interchange, and billing. The programmers implemented the SKU movement profiles, determined the means of collecting and storing information, and developed labour plans. Analytical information is collected in charts, tables, or graphs for convenience.
A manager can use the program to control packaging, reserve stocks, distribute work time by slots, monitor employee performance, and plan tasks. Accountants correctly calculate payments and promptly create invoices.
After the first 6 months of using the new platform, the logistics company increased the warehouse efficiency by 25%. The increase of order fulfilment rates constituted 17%. The web system helps to avoid overspending on unnecessary materials.
Conclusion
The examples above demonstrate that warehouse management systems are valuable to the supply chain. Proper management saves the resources of an organization, and employees perform their tasks quickly and correctly. As a result, a client receives goods on time, in good quality, in compliance with regulatory requirements. Without a WMS, it is difficult to meet the demands of the present-day market and maintain competitiveness. That is why investing in logistics software development is the right way for a logistics company.
