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Warehouse Management System: Choosing the Right One for Your Business

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Following these guidelines can boost your chances for a successful WMS implementation.

The supply chain management provider usually uses a warehouse management system to efficiently and accurately run its warehouse space, which serves its clients. The system directs warehouse employees who are using hand-held devices, to make the most efficient routes to the proper locations. 

The process of the warehouse management system improves efficiency by about 40% when compared to the standard non-FRID environment. 

As the supply chain grows more complex and delivery time frames accelerate, information has become increasingly critical to effective supply chain management. This helps in boosting the role of WMS solutions. WMS can help companies leverage data and operate more efficiently.

The WMS market is expected to grow at a compound annual rate of 16% through 2025, according to the report from Grand View Research reports. Along with increasingly digital supply chains, the jump in e-commerce, which boosts the criticality of supply chain visibility, is driving growth.

While warehouse management systems can provide many benefits, implementing one carries risks. A WMS can put a company out of business if it’s the wrong vendor or solution, or it can propel a business

ahead of the competition,” says John Reichert, senior director, SCE solutions with Tecsys, a supply chain technology provider. Follow these steps for successful WMS implementation:

  1. Know when you require WMS

Size can influence the need for a WMS; larger operations are more likely to benefit from a solution. However, warehouse complexity, which generally results from the types of units handled and the number of processes, more often drives the decision.

The “eaches” picking, typical with e-commerce sales, tends to be more complex than pallet operations. Similarly, multiple product types—say, a mix of those requiring refrigeration or freezing—also boosts complexity.

If the only way to consistently meet service requirements is by adding warehouse employees, it’s also time to consider a WMS.

When the products are critical to the next link in the supply chain, such as components needed to keep a manufacturing plant operating, a WMS may be needed to drive accuracy and timely fulfillment. The same holds true for essential products, like many medical devices.

Before investing in a WMS, however, assess whether you can more cost-effectively address the challenges by leveraging unused features in existing systems or through third-party add-ons, advises Tom Singer, principal with Tompkins International, a supply chain consulting firm.

2. A WMS CAN PROVIDE A RANGE OF CAPABILITIES.

A WMS has the ability to optimize day-to-day warehouse operations and provide more efficiency to maximize customer satisfaction. By providing real-time visibility into inventory, a WMS can reduce stockouts and boost customer service.

It can also create more efficient pick paths, increasing inventory turns and reducing inventory carrying costs. Robust logic within a WMS can streamline inbound, putaway, and picking, among other processes.

A WMS can improve productivity by reducing paper-based operations and implementing system-directed tasking that assigns workers based on the three P’s: permission, priority, and proximity. If a pallet needs to move from storage to picking, the WMS can evaluate the priority of this job, assess which workers have the ability to move it, and identify those closest to the pallet. This intelligence reduces order cycle times and errors.

3. LET BUSINESS LEAD THE PROJECT.

Successful WMS implementations tend to be led by the business units, rather than IT. The business units should jointly determine how the system needs to work for them, and the impact on their operations.

4. ASSESS YOUR BUDGET.

Any organization that intends to wade into the WMS marketplace should know what end of the pool to swim in,” Singer says. Identifying the best WMS vendor and solution requires an investment of time and energy.

The least expensive Tier 3 solutions mostly track and confirm what was received, picked, and shipped. One rung up, many Tier 2 solutions can provide directed work for receiving, putaway, and restocking, as well as some work optimization. Many offer reporting capabilities and customer portals. However, some functions may be limited.

Tier 1 solutions stand out for “their depth and quality. They provide more sophisticated controls over order flows, labor allocations, and forecasting capabilities while offering strong response times at all transaction volumes. On the flip side, they’re usually expensive to license and implement.

5. EVALUATE THE REPORTING CAPABILITIES.

The real value from reporting is the ability to see what is happening on the warehouse floor as it unfolds,” Singer says. To that end, best-in-class reporting should provide a command and control view of warehouse activities, so problems can be identified and addressed quickly. The solution should provide the ability to drill into details and identify actions to address challenges.

6. ASK ABOUT “TIME TO VALUE.”

Once companies install a WMS, they typically need some time to ramp up and capture productivity gains before they see a return on investment. This can range from one month to one year—or more. “When checking references, ask how fast the time to value was,” Gilmore adds.

7. CHECK BUSINESS INTELLIGENCE SOLUTIONS.

Business intelligence (BI) can help an operation look both forward and back. Management can use the data to identify trends, conduct period-over-period analyses, and identify action steps.

Business intelligence is also key for forecasting future shifts, such as seasonal stock fluctuations. It is becoming more important as the amount of data from an operation increases.

8. CONFIRM CONNECTIONS BEYOND THE WAREHOUSE WALLS.

Because a warehouse increasingly needs to connect to the other links in the supply chain, so does a WMS. For instance, can a WMS incorporate customer feedback on sales, so the warehouse can adjust its shipment schedule? 

9. CONSIDER THE VENDOR’S EXPERIENCE IN YOUR INDUSTRY.

While lack of industry experience may not be a deal-breaker, having experience can provide an edge. Proven vendor industry experience helps ensure that the functionality needed is available without custom modifications. In addition, a vendor’s success in an industry usually leads it to develop more functionality for that vertical.

10. EVALUATE THE UPGRADE PATH.

While a WMS can improve warehouse operations almost from the start, the real value tends to accrue over time, as organizations continually revise their processes. That requires a solid upgrade path. Every WMS has an upgrade path, but they’re sometimes so onerous that companies don’t bother doing it. Before choosing a solution, review the upgrade path.

Final Words

The manufacturer must provide development companies with as much information as possible. After all, the possible degree of program integration plays a significant role in determining the cost and the final positive effect from the introduction of a WMS system. 

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