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 WMS software?
Warehouse management systems (WMS) can have a direct impact on your ROI by increasing throughput and maintaining efficient processes. WMS system software also helps to ensure that the right products are shipped, the necessary products are stocked, and redundancy and discrepancies are avoided. Warehouse management software provides the tools you need to remain competitive and comply with rules and regulations.
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 capabilities of a WMS. This brings us to the question: does your warehouse really need WMS software?
They fill the managerial gaps in integrating all functions in a warehouse operation to boost productivity with the power of warehouse automation and real-time data.
Let us evaluate different scenarios in which a company can enjoy the true benefits of WMS software if it invests 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 a WMS system?
WMS logistics and warehouse management systems (WMS) can play a significant role in optimizing picking operations and reducing costs. Picking constitutes a substantial portion of warehouse operation costs and is directly associated with customer satisfaction. In typical warehousing operations, pickers spend 60% of their time walking between locations. 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.
Warehouse management systems (WMS) can help you optimize order picking operations by selecting the right picking method for your specific needs. There are many factors to consider when choosing a picking method, such as the characteristics of the product being handled, the total number of orders, picks per order, quantity per pick, picks per SKU, and the total number of SKUs. Additionally, many businesses need to use a combination of picking methods to handle diverse product and order characteristics.
1. Third-party logistics
WMS logistics can help 3PLs manage multi-client warehouses efficiently and effectively. The idea behind a multi-client warehouse is that tenants can share resources, such as labor, material handling equipment, packaging material, and storage space, to avoid a large upfront investment. However, the multi-client structure of a warehouse can make operational efficiency challenging.
A logistics warehouse management system can help 3PLs carefully allocate warehouse resources to clients based on logically defined patterns, such as product type, order volume, and delivery deadlines. This can help to improve operational efficiency and ensure that all clients are satisfied with the level of service they receive.
A WMS system 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 warehouse management systems help 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 overstock warehouses, easy deliveries to remote locations, etc. The complex structure of multi-location warehousing management requires equally efficient supervision of inventory movement and storage. So the WMS solutions come into play as they serve 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
The best warehouse management systems (WMS) can help companies transform their traditional warehouses into omnichannel fulfillment centers.Omnichannel supply chains face incoming orders from all directions, including stores, marketplaces, internal transfers, and product returns. This requires a thorough analysis of current processes and a detailed transformation roadmap. WMS software can enhance a company’s visibility into various operations and reconfigure them to meet the requirements of an omnichannel warehouse. WMS system software also provides one-touch integration across various sales channels and stakeholders, such as 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 system software 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 software?
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
Warehouse management systems (WMS) can help e-commerce businesses overcome the challenges of fulfilling online orders accurately and efficiently.E-commerce businesses typically have a large variety of SKUs with low inventory levels and small order baskets. This requires precise location management and put-and-pick orchestration to ensure efficient order fulfillment.
Online sales also generate a large number of returns, often due to products that are dissimilar or asymmetrical to the descriptions in the marketplace catalog. WMS software with image-based quality check capabilities can help warehouse users match products to the catalog and separate unfit products.
Finally, a great customer experience depends on efficient delivery. Warehouse management system software can help businesses efficiently utilize delivery service providers (DSPs), taking into account their respective expertise in delivering certain types of products.
A WMS system software 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
A Warehouse management system 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 system software 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!