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What is the impact of a WMS in your supply chain?

Written by Michael Badwi
Created: 19 July 2019

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Without a well-constructed WMS, you may find your business suffering in multiple areas, with inefficient processes impacting your operations and supply chain down the line.

 

To fully optimise your supply chain and succeed in meeting your customers’ expectations with regard to delivery, quality, and consistency, you need a warehouse intelligence dashboard that pulls data into set KPIs to assess the health of your business and make key decisions to help it stay on track.

A warehouse management system can help you to resolve a number of issues within your warehouse and supply chain:

 

The Problems you can solve with a Warehouse Management system, including warehouse employee challenges, inventory, storage, and expansion hurdles, and customer service.

 

How do we fix these problems, while driving an efficient process throughout the supply chain?

Monitoring your warehouse performance will assist you to compare data over time, reduce costs and ensure consistency across your supply chain.

 

First, we take a look at how a Warehouse Management System can change the hub of your business: your warehouse.

 

The impact of WMS on your day-to-day warehouse operations

  • Real-time access to quality data, giving you increased visibility throughout your supply chain

    Management and sales teams get an accurate, real-time picture of various stages of shipment to track goods and replenish orders. This allows an on-the-go order management system, as well as quicker, more efficient problem-solving.
  • Reduced warehouse labour costs due to efficient labour allocation

    Managers can obtain comprehensive reports on all activities happening in the warehouse, with the accurate data an KPIs provided allowing a demand forecast to show the labour required, when, where, and for how long. Employee management is simplified, and downtime is reduced.

  • Streamlined warehouse processes

    The WMS facilitates recording inventory and efficiently locating items for onward shipping or assembly. This, in turn, improves your warehouse efficiency and allows for a smoother operation from inbound to outbound operations.

    Warehouse managers can also track where the goods are and respond to any arrival delays ahead of time to manage customer or business expectations.
  • Optimised warehouse layout

    With a WMS helping you to optimise your processes, you can examine your warehouse layout and improve the ease-of-access to allow for smoother picking processes.

  • Improved inventory and pick accuracy, with decreased time between picks

    With the simplification of all operations - from inventory control, staff management and space management of goods – your inventory management improves, and your pick accuracy and timings are optimised to create a faster turnaround in the inventory department.
     
  • Improved warehouse flexibility and responsiveness


    Automation and streamlining of processes reduce error rates when dependency on manpower lessens. This reduction in human error and administration time allows a faster, more appropriate response to sudden changes, errors, or upheavals that may occur.

 

Knowing exactly what stock you have on hand (and where that stock is located in your warehouse) helps you identify missing stock immediately and ultimately reduces warehouse theft. However, trying to keep track of stock manually often leads to errors - especially if you’re doing infrequent stock takes.

These impacts all contribute to an optimised warehouse which runs smoothly, has greater quality output, and delivers on KPIs consistently and efficiently.

 


With the warehouse running at an optimum, the impacts will be visible across your business in your sales capabilities, financial planning accuracy, and customer service.

 

The secondary impacts of your WMS across your supply chain

  • Accurate demand-forecasting

    At any given point in time, previous data can be recovered and used to help management make strategic decisions which drive business growth. Allow your business to forecast demand, employ the right size labour force for the forecast period, and ensure your suppliers, support teams, and client-facing staff are well-versed in the strategies to accommodate busy periods.

  • Improved supplier relationships

    By avoiding the last-minute panic that so often plagues manufacturing and production businesses, you will be able to cultivate healthy, long-lasting supplier relationships based on practical and accurate requests, and on-time delivery.

  • Improved customer service levels

    With your suppliers delivering on time, your warehouse working efficiently, and your forecasts up to date and as accurate as possible, you will find more time to pay attention to your customer satisfaction: reduce damage to goods, improve delivery times, and eliminate incorrect picking errors which result in customer complaints.

  • The ability to implement an ongoing optimisation strategy

    Time is everything in a warehouse: time to examine processes, time to change up your methods, time to train employees, and time to ensure a quality product reaches your customers. A Warehouse Management System reduces time spent on inventory control, staff management and space management of goods, so that you can focus your energies on team building, training, and process optimisation.

 

The critical impact: The effect of a WMS on your expenditure

The essential – and most sought-after – outcome of the implementation of a Warehouse Management System is simply “REDUCE OVERHEADS”. To be able to justify your investment, you need to see the ROI.

All of the above impacts serve to reduce your expenditure, whether it be on your labour complement, storage, inventory, poor supplier relationships, or addressing customer complaints. Typical improvements and savings that can be achieved with a successful implementation of a WMS are along the lines of:

  • Labour utilisation 10-45%

  • Inventory reduction 5-40%

  • Warehouse utilisation 10-40%

  • Picker productivity 10-50%

  • Shrinkage 50-99+%

  • Increase shipping accuracy to 99%

  • Increase supplier conformance 99% +

  • Customer service 10-50%

  • Increased inventory availability 10-50%


The success story that shows how a WMS can positively impact your business:

See how Kolok implemented a WMS representative of processes and practices employed by the world’s leading warehousing and distribution companies

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