Warehouse management doesn't get the spotlight it rightfully deserves but it is an important part of supply chain management. Without a properly functioning warehouse management system (WMS) that smoothes and removes bottlenecks, there would be no free-flowing supply chain. That's the power of warehouse management.
Introduction to warehouse management systems
We're all familiar with the idea of a warehouse. It's a place, usually a giant, empty location, where you store goods as part of your business. It's also known as a distribution or fulfillment centre.
Having a warehouse to store products is just the first step in a warehouse management system. It's also about operating in an efficient manner, factoring different departments such as staff, purchasing, shipping, stocking, operational costs and customer management.
A warehouse management system applies oversight to all operations in a warehouse. This includes training staff, monitoring the movement of goods to and from the warehouse(s), inventory management and control, transactions related to shipping, storing and receiving goods and workload planning.
An automated warehouse management system provides ongoing data that can be beneficial in developing new efficiencies and helping with strategic planning not only for the warehouse but for the greater supply chain.
In an era where new standards for rapid response shipping are being enhanced each day, businesses that rely on warehouses must have a management system that meets customer expectations.
The need for warehouse management systems
Businesses have changed and warehouse management systems have changed along with it. While most businesses have an order management system (OMS) or enterprise resource planning system (ERP), which have some basic warehouse management functionality built in, this functionality is limited and businesses can outpace it sooner rather than later.
It is easy to understand why businesses choose an OMS or ERP. They are marketed as an all-options solution and are a more affordable entry market option than a full WMS. Thanks to the greater proliferation of cloud-based technology, the barrier to entry has decreased both in choice and costs. Cloud-based technology means a reduction in deployment and operational costs, which helps streamline the process.
While there are benefits to an OMS or ERP, they are better deployed to support other departments within the supply chain, such as marketing, accounting or the contact centre. A warehouse management system is focused on supporting, improving and creating efficiencies within the warehouse(s), such as truck scheduling and the related management of inbound and outbound receiving docks.
While an OMS or ERP can manage staff training, shipping and transactions, a dedicated, fully featured WMS comes with tools that can benefit a company. They include:
- Controlling the movement and storage of product and materials. This includes inventory location control and accuracy, cube utilization (real-time updates of total available space, which is expressed as a percentage) and slotting or allocating product by SKUs to create efficient replenishment.
- Improving the accuracy and timeliness of customer orders throughout the fulfillment process. Not all customer orders are the same, so a warehouse management system creates the flexibility to handle that diversity, such as bulk distributions for manufacturing, wholesale orders and small e-commerce orders.
- Creating advanced shipping notices, receipt planning, scheduling labour and transportation appointments whether it's via sea, land or air.
- Labour management in the warehouse via improved tracking and control of work order controls, and productivity reporting at the employment and department levels.
- Visibility into warehouse activities via data; this includes analytics and reporting.
- Improving production and assembly costs thanks to data insight.
- Managing machine usage, equipment (wear and tear) and smooth automation operations (sorting and moving).
A warehouse management system (WMS) is an integral part of the supply chain and logistics management system. Integration of such a system can help grow your business in several ways:
- Faster inventory turnaround: A WMS can reduce your lead times by creating and managing inventory records so they are always up to date. This supports the now-expect rapid delivery environment and results in reduced spending on emergency inventory. More importantly, it also helps manage your cash flow and working capital.
- Optimization of the warehouse process: This includes the automation and management of all equipment. Receiving real-time data on all warehouse processes results in the use of this data to align the WMS with the overall business strategy.
- Inventory transparency: A rapid delivery ecosystem means knowing where every item or SKU is slotted in the warehouse. A WMS can improve usage of the space by sorting, placing and locating products for rapid receiving, packing and shipping.
- Reduced paperwork: All businesses have paperwork, but too much paperwork can be a detriment to the supply chain, slowing down the process and losing market share. Using a warehouse management system can reduce the paperwork and optimize inventory and information.
- Tracking movement and shipping: Knowing the cycle counting of warehouses and movement within and around them means planning and inventory can be done with better accuracy.
- Better labour productivity: Instead of spending time dealing with returns, a WMS ensures orders are correct so people can spend their time processing and shipping out products.
- Improved customer service: All of the above naturally means satisfied customers, who may be loyal to businesses and become repeat customers.
- Security: Products and goods being shipped and received can be consistently monitored no matter where they are in the supply chain process.
- Accuracy: An integrated WMS creates efficiency of inventory and warehouse tracking, which in turn reduces capital spent.
New trends to boost your warehouse management systems
Warehouse management systems have also benefited from machine learning, the Internet of Things (IoT), advanced data analytics and artificial intelligence.
Machine learning and advanced data analytics. Mining data and using machine learning helps algorithms within a WMS to sense and adapt to changing conditions within warehouses. It also allows warehouses to fulfill last-minute orders. Data and machine learning mean a customer can place an order and the warehouse will know in real time whether the product is available, its location and can package it for shipping at no extra cost to the customer.
The Internet of things (IoT). Automation has been present in warehouse management systems for decades, but adding IoT transforms automation from moving items around into a system that anticipates and predicts trends and patterns. IoT can help track product status, machinery health and efficiency and collect and process data. When analyzed, this data can help with forecasting, procurement planning, sales and marketing trends. Inventory is accurately managed so products flow in and out of the warehouse without staying for an extended period of time.
Robotics and drone solutions for warehouse automation. These have helped streamline the slotting, shipping and receiving process for goods and products within a warehouse.
All such digitization helps with:
- Speeding up the warehouse process: Automating processes means workers can complete routine processes faster.
- Better use of space: Warehouse space management can be optimized thanks to data.
- Better transparency into inventory and forecasting: Data is used to derive business insights, generating sales reports and marketing trends and helping with the issuing of purchasing orders.
- Minimizing errors: Machines have a lower error rate and don't get tired so the process can continue running for hours at a time. Fewer errors on the floor mean fewer accounting errors.
- Real-time information: This greatly reduces the timeline between ordering to delivery. Real-time data means businesses can respond to market trends in a faster way.
Pushing the limits of a warehouse management system
As long as there has been a warehouse, there has been a system. Remaining competitive often means spending the money on a WMS that provides a competitive advantage. Newer WMS combine cloud technology with network visibility and leverage technology to power warehouse planning, data collection and analytics, anticipate trends, manage suppliers, time deliveries and manage trade routes in an era of tariffs.
If you're ready to give your company a competitive advantage, here's what to keep in mind when looking for a warehouse management solution:
- An end-to-end solution specifically for warehouses
- A system that provides reliable real-time data
- Customization—a system that can be customized means it can support a wide range of processes whether it's for one or multiple warehouses.
No business is exactly the same even if they use the same WHM system. Take the time to get a WMS that has a contemporary user interface. This allows warehouse workers to safely work and operate machinery and can adapt to the needs of the warehouse and the supply chain in general.
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.