Warehouse Management Systems (WMS) are crucial for growing businesses with on-hand inventory. While businesses cite the benefits of operational efficiency, accuracy, and centralized control. Many times businesses may not be exploiting the complete capability of a WMS. This brings us to the question – does your warehouse really need a WMS?
A WMS solution has proved to have a direct impact on your ROI not just by increased throughput but by maintaining efficient processes. Also, it helps to ensure the right products are being shipped, necessary products are being stocked, redundancy and discrepancy are being avoided. It provides you the tools to remain competitive while supporting compliance with rules and regulations.
They fill the managerial gaps in integrating all functions in a warehouse operation to boost productivity by the power of automation and real-time data.
Let us evaluate different scenarios in which a company can enjoy the true benefits of a WMS if invested in the right software.
The global warehouse management systems market is expected to grow at a compound annual growth rate (CAGR) of 15.3% from 2021 to 2028.
Read report summary by Grand View Research
What type of logistic operations can benefit from WMS?
Picking constitutes a substantial portion of warehouse operations costs. Also, it is directly associated with customer satisfaction as compared to other warehousing activities. In typical warehousing operations, pickers spend 60% of their time walking between locations. Surely adopting the right picking strategy is key to driving down picking costs by increasing picker productivity and accuracy. As in all areas of operations management, there is often a trade-off between competing objectives – productivity, accuracy, and time required for an activity.
The methods for order picking vary and the level of difficulty in choosing the best method for your operation will depend on the type of operation you have. There are many factors that will affect your decision on a method for order picking. Such as the characteristics of the product being handled, the total number of orders, picks per order, quantity per pick, picks per SKU, the total number of SKUs. Additionally, many times we need a combination of picking methods to handle diverse product and order characteristics.
1. Third-party logistics
3PL tries to provide efficient warehousing services to many suppliers irrespective of their size of operations at a reasonable cost. Therefore, they need to manage multi-client warehouses. The idea behind a multi-client warehouse is that tenants can enjoy shared labor, material handling equipment, packaging material, storage space, etc. This helps to avoid a huge upfront investment. However, if not managed efficiently, the multi-client structure of a warehouse can put operational efficiency at competing odds. This makes the warehouse operations more complex and efficient utilization of warehouse resources difficult. As a result, such a warehouse must carefully allocate warehouse resources to clients based on logically defined patterns. A WMS increases the operational efficiency of all the users in tandem through: –
- Automated allocation of warehouse resources like labor and material handling equipment based on contract terms, changing requirements, and dynamic needs for services like kitting, bulk packaging, cross-docking, etc.
- A WMS solution is compatible enough for integration with ERP systems of multiple clients.
- Smart routing is crucial than ever as the operatives might fulfill orders originating from different clients that make coordination difficult.
- The most basic utility of increased visibility is important because of complex material storage.
2. Multi-location warehouse
Multi-location warehouses help to spread the inventory, increasing operational and fulfillment capability. The perks of this arrangement include cutting down on shipping time, internal transfers to high-demand warehouses, moving products from overstocked warehouses, easy deliveries to remote locations, etc. The complex structure of multi-location warehouses requires equally efficient supervision of inventory movement and storage. So the WMS solutions come into play as it serves the following requirements.
- Understand the patterns of different SKU requirements at different locations to maximize the utility of having a multi-location warehouse.
- Low-stock & out-of-stock alert thresholds for different locations.
- Precise internal transfers based on requirements of concerned facilities.
- Real-time data and intuitive dashboard to present an instant view of what’s where.
- The WMS works as centralized administration to effectively manage the movement of products.
3. Omni-channel retail
An Omnichannel supply chain has to face incoming orders from all directions – stores, marketplaces, internal transfers, product returns, etc. The transformation of a traditional warehouse to an omnichannel requires a thorough analysis of current processes and a detailed transformation roadmap. Therefore, WMS can enhance the company’s visibility of various operations and reconfiguring them to the requirements of an omnichannel warehouse. Also, It provides one-touch integration across various sales channels and stakeholders, like delivery service providers, distributors, and suppliers.
Modern WMS solutions are being considered facilitators of Omnichannel presence because of the following reasons.
- Order status updates.
- The WMS is linked to major online marketplaces.
- Omni-channel visibility of incoming orders, orders in transit, product returns, and material procurement.
- Tech-driven data exchange through API integrations.
What type of industry can benefit from WMS?
The type of industry and nature of fulfillment determine the supply chain complexity of an organization. Additionally, business dynamics are fast evolving, given the unprecedented situation the world is currently facing. Every industry faces supply chain challenges specific to its operations and processes. An evolved WMS solution helps to tackle such challenges systematically.
1. E-commerce
E-commerce order fulfillment is complex. There is less depth of inventory across a large variety of SKUs.Also, the order basket size is also small. Therefore accurate location management and put and pick orchestration are required to fulfill online orders efficiently.
Large sales returns characterize online sales because of dissimilar or asymmetrical products from the marketplace’s catalog. Image-based quality check capability helps the warehouse user to match the product with the catalog and separate unfit products. Also, a great consumer experience entails efficient delivery. This requires efficient use of delivery service providers(DSP). Also, the DSPs have their own experience with delivering certain kinds of products. A WMS adds to the competitive edge of an E-commerce business through: –
- Accurate location management, space management, intelligent routing
- Automating the DSP allocations based on pin code serviceability and DSP capabilities with nature of products and industry
- Image-based QC to hamper deceptive marketing
- Better order efficiency by integration with e-commerce platform to keep stock updated at all times
2. Electronics and automotive industry
A typical electronics or automotive product comprises many types of components from multiple suppliers. This means the involvement of more than a usual number of suppliers, vendors, and partners. WMS aids the operations with the following features: –
- Kitting, LPN tracking, serialization, batch tracking are great to help to track SKUs as a unit from the point when they are to be bought and received to the point when they are stored, picked, packed, billed, and transported.
- Proper visibility and real-time updates are pre-requites to ensure proper coordination between procurement, manufacturing, and supply
3. Healthcare and Pharmaceutical
The supply chain operations related to healthcare products are undoubtedly the most crucial ones. Since it has a significant impact on the consumers’ wellbeing. The urgency of timely delivery of a drug or a healthcare product can be vital. Therefore, demanding the supply chain to operate at the peak of its efficiency.
A WMS in the healthcare and pharma industry helps in establishing proper coordination through the entire value chain. We can automate replenishment strategies to avoid critical situations. WMS solutions ensure that there are ample SKUs to satisfy the demand. There’s no debate about the importance of the availability of essential drugs when required. However, a lack of transparency and visibility in the inventory gives rise to situations where drugs are to be bought in an unplanned manner. As a result, this leads to increased costs. Enhancing the healthcare supply chain could help bring down these costs to a noticeable extent. Healthcare products are governed by licenses that help ensure optimum standards for storage, transportation, and packaging. WMS is an essential application for the industry because of the following implications: –
- Overnight or speedy deliveries
- Reduction in costs
- Reducing wastage, spillage, degraded, and spurious medicines by proper zone management in the warehouse.
- Incorporating regulatory practices for different medical products to carry out smooth regulatory-compliant supply chain operations
4. Food and beverage
A lot of digitalization has happened in grocery fulfillment. Moreover Pandemic only sped up the adoption of d2c fulfillment in the grocery vertical.
Typical challenges with D2C grocery fulfillment are as below:-
- Wide range of SKUs
- Infeasible to barcode each unit
- The requirement to track batch and expiry
- High-velocity transactions, high inventory turns
- Many small orders requiring each picking
To support such complex fulfillment, we need a powerful WMS system that can operate in an integrated environment.
Overall the above-mentioned business situations are just the touch on where operational sustainability would be indispensable to the application of a WMS solution. Let us know your business situation and we shall be able to help you in evaluating the right warehousing strategy for you. Please feel free to share other use-cases where WMS is a must-have!