What is a warehouse management system (WMS)?
A Warehouse management system is used to help companies manage their warehouses and improve warehouse operations.
They’re also used to improve operations in other areas of the supply chain and increase the effectiveness of warehousing, shipping, and distribution.
Warehouse management systems work quickly, allowing companies to put WMS-based solutions into place more quickly.
This is important because it can help companies generate more revenue over the long term by providing better inventory visibility and faster tracking of shipments.
How does a WMS work?
A WMS is connected to your ERP system and uses barcodes, RFID tags, and/or voice recognition to identify inventory.
The system provides workers with the optimal order picking path through the warehouse. It tells them where items are stored and how many of each product are available in each location.
The WMS knows the physical limitations of your warehouse, so it can assign tasks that can be accomplished safely and efficiently by a particular worker based on their size and strength.
It also makes sure that workers do not pick too much weight at one time or go out of bounds into dangerous areas of the warehouse.
Warehouse management system benefits for your supply chain
So, how can a WMS help you improve operations and profitability?
A few ways:
Better inventory tracking:
WMS software is designed to track inventory accurately, so you always know where everything is in your warehouse. This can lead to quicker order fulfilment, which can result in happier customers. Happy customers are good for business!
Improved order accuracy:
It’s no fun when you choose the wrong product from a shelf—and it’s even less fun if you’re the one paying for that product! A WMS uses barcodes to ensure that the right items are put into orders, resulting in fewer returns and customer complaints.
WMS software automates a lot of the processes involved with warehouse management tasks–from receiving items to restocking shelves to packing shipments–which leads to fewer errors overall. Less manual data entry means less opportunity for human error (and who doesn’t want that?).
A WMS helps cut down on errors which means less time wasted on fixing problems and more time spent doing productive work that boosts profits. With better stock control, you won’t lose money through overstocking either.
Warehouse management system features
When you’re running a warehouse, it’s easy to get caught up in the day-to-day activities and lose track of the bigger picture.
You need to know what’s happening in your warehouse at all times, from how much inventory is on the shelves to which customers still have orders pending.
Without a proper system for tracking these details, you may discover you’re out of stock when a customer calls in for an order or that you’ve committed more product than you actually have.
To avoid this situation, many businesses use a warehouse management system (WMS), which provides an automated way to track everything going on in your warehouse and ensure that every item has its place.
A warehouse management system (WMS) is an application that allows you to manage inventory and order fulfilment within your warehouse.
A WMS will help you optimize operations and increase productivity, which ultimately drives down costs while also boosting profits.
You can use a WMS to automate your warehouse operations and eliminate manual processes, such as paper-based data collection. This is sometimes referred to as “paperless” warehousing.
A good WMS will allow you to:
Conduct inventory management tasks
This is a given, but it’s also the most obvious area where warehouses make mistakes. Excess inventory can cost you money in storage fees and lost revenue while tying up valuable capital.
Inadequate inventory means missed sales and frustrated customers.
A WMS gives you the tools you need to get inventory right — including cycle counting, demand forecasting and safety stock calculations.
Manage order fulfilment
The WMS should give you complete control over picking and packing orders, including using barcodes or RFID tags to make sure employees pick from the right places every time.
If shipping is part of your process, the system should help track which carrier is handling each package, when it was shipped and what was paid for shipping costs (among other things).
Generate real-time reporting on inventory levels and other KPIs
Reporting functionality is crucial for understanding how well your warehouse is operating, whether you’re servicing customers on time, the cost of storage and other key metrics. Look for a WMS that allows you to generate custom reports on demand or schedule regular reports on key performance indicators (KPIs).
Integrate with other systems, including ERP, accounting software or ecommerce platforms like Shopify or Woo Commerce
This helps organizations to focus on improving the business instead of spending time integrating the systems; it also allows them to track inventory levels against their sales metrics, which is useful for business growth.
Think about how your product moves through each step of the process — from the point it’s created to the point it’s sold.
A WMS will integrate with all of these systems so you can see how each part of the process is working together.
How to choose the right WMS for your business
When it comes to choosing the best warehouse management software, it’s important you choose a system that makes sense for your business, as well as one that’s compatible with any existing systems you currently use.
The software should be easy to install and use, and shouldn’t cause problems with your current systems. To help you choose the right system, here are a few tips:
Start by thinking about what your needs are.
- What do you need to track in your warehouse?
- How often would you like to be alerted when something is ready for pickup?
- How much of a difference do you want to make between In-Stock and On-Order inventory levels?
- Do you want to track certain types of inventory or only certain types of products?
- Do you want to manage employees?
- Do you need help with managing different locations or types of equipment?
The warehouse management software market is very competitive and the leading players are always trying to outdo each other with cutting-edge features.
It’s important you choose a system that is compatible with your business.
Learn how a warehouse management system can drive profitability and productivity
When it comes to boosting efficiency, reducing costs, and improving customer satisfaction, there is no other step you can take that will bring about more positive change than implementing a warehouse management system.
But before you do that, you’ll want to identify what your organization’s business needs are.
Your goal is to optimize operations and drive cost savings, so you will need to find a system that can integrate with your current software and seamlessly manage things like inventory, labour, customer returns and more.
Once you’ve identified the right WMS for your business, it’s time to make a case for it. While there are many benefits that come from having a WMS in place—lower inventory levels, reduced labour costs, improved reporting capabilities and more—you won’t be able to obtain executive buy-in without demonstrating how this new system will affect the bottom line.
Warehouse management software can bring about incredible change for those companies that are ready to make an investment in it.
The ROI is right there waiting for you, promising better inventory control to boost efficiency, reduced costs due to optimized labour usage and transportation planning, and improved customer experience (and satisfaction) through well-defined order processing.
It’s time to take a look at how your warehouse management system can help you implement more effective practices where it really counts: in the warehouse.
To learn more about SAP Business One and Warehouse management capabilities, please download the wholesale infopack