If you’re considering a warehouse management system (WMS), but are not quite sure what a warehouse management system does or how it adds value to your business, this article is for you. We’re unpacking some of the most frequently asked questions about warehouse management systems as well as some information on Manhattan Associates warehouse management system to help you decide whether a WMS is
A warehouse management system (WMS) is a software application which is specifically designed to optimise an organisation’s warehouse or distribution centre (DC) and its operations. The warehouse management system that you choose allows an organisation to manage the entire process - from the time stock enters your warehouse, until it’s shipped to your customers.
A warehouse management system is used to plan, organise and optimise your warehouse operations. The aim of the system is to ensure that you can provide the right goods at the right time while optimising both efficiency and costs.
Take a look at our practical guidebook for expert tips on how to implement processes that support your business goals and help achieve a world-class warehouse whilst cutting unnecessary costs.
Inbound Logistics
Inventory Management and Control
Outbound Order Processing
Shipping and Loading
Inbound planning is where warehouse success begins. Yard management is the practice of managing the vehicles and/ or trailers as they arrive at your facility and then directing them to either a yard location or appropriate dock door. This function works best when coupled with appointment scheduling as your facility has finite capacity and planning the arrival of deliveries against that capacity ensures that the workload is smoothed throughout the day.
Receiving is pivotal to the success of your warehouse and, ultimately, your business. Whether you are receiving against Advanced Shipping Notices (ASNs), PO’s or blind and whether your inventory is labelled, pre-allocated or arrives unplanned, mistakes and errors during the receiving process negatively affect every downstream process that follows in your warehouse. So the importance of ensuring your WMS helps to drive an effective receiving process is critical.
Returns or reverse logistics is a fact of life and with the continued rise of Omni Channel fulfilment is only growing as many retail and wholesale companies are dealing directly with their end customers. Reverse logistics is often a science unto itself and requires careful thought and upstream planning, this coupled with streamlined warehouse processing that typically includes effective inventory disposition assignment, touch screen processing, re-labelling and allocation is where an effective WMS will assist
There are many forms of cross docking including flow through, merge in transit, ship to mark for, pure cross dock, these can then be coupled with multiple warehouse processes such as put to store, opportunistic substitution and allocation. The important thing to consider with cross docking is that the main aim is to ship out the inventory you receive without having to make any changes to how it was received and this is where your WMS should seamlessly match the inventory received to the open orders to facilitate this.
An effective putaway process assists in speeding up your order fulfillment time as most ERP systems wont let you sell inventory that you don’t physically and systematically have - which is why your dock to stock metric is one of your most critical.Your WMS helps to optimise your putaway strategy, allowing you to improve warehouse capacity, inventory availability, as well as reducing excess travel, preventing damage to inventory and reducing congestion in aisles.
Most warehouses will require a full stock take at least twice a year - sometimes more if your auditors require it. As a full stock take typically requires that you stop operations whilst the physical count is being performed, it’s essential that your WMS helps you accurately plan, coordinate and execute this process so you can back to the business of fulfilling orders ASAP.
Cycle Counting is typically broken into two components:
1 - Planned Counts - This is where your inventory team counts X number of items and/ or locations on a regular basis based on criteria such as item velocity, item value, days since last counted, etc
2 - Exception Counts - As the name suggests these counts are typically executed when an exception such as a short pick or alternate location selection occur, but they can also be proactive by asking pickers to confirm that locations are actually empty once they have picked the last item in the location
Most warehouses have a combination of full stock takes and cycle counts in place, but the most mature use cycle counts only as they have proven that their inventory accuracy is sufficient to warrant the trust and flexibility to do so
If you are a company that operates in the pharmaceutical or food distribution sectors you’ll be all too familiar with the need for tracking lot, batch and expiry dates. These are specifically important when ensuring you are supplying the freshest inventory, and when there is a product recall, as you will need to know exactly what lot, batch and expiry of the recalled item you have shipped to each and every customer.
High Tech Electronic companies also need to track serial numbers for warranty purposes. There are often manufacturer rebates for specific items and the only way to claim these is by ensuring you provide information on which serial number was sold to which customer. In addition, when an item is returned, it’s critical to match the serial number sold to the customer with the one returned.
The wave is one of most important functions of a WMS as it performs the following core functions:
Picking involves selecting the appropriate items that match your customer order requirements, as it is one of the most important functions in a warehouse it needs to planned, organised and executed effectively and this is where your WMS should come into its own.
There are many types of order picking including:
Auditing or checking your orders prior to despatching them to customers is typically driven by a number of factors including:
The process of building a load can either be performed in the wave, via integration to a Transport Management System (TMS) or after orders are picked. Your WMS should enable the flexibility to perform any combination of these processes.
Loading is the process of the WMS systematically directing the shipping teams as to which orders to load onto which vehicles, at which dock doors at the appropriate time to meet the despatch cut off time.
The process of rating and routing can either be performed in the wave, via a third party carrier system or after orders are picked. The aim of rating and routing is to systematically select the most appropriate carrier to transport your customer orders based on the price and service level requirement of the customer.
Prior to dispatch, your customer orders and delivery partners will typically require supporting documentation, whether this be electronically verified or printed at the time of despatch. The typical core documents include:
Your WMS should be able to generate or trigger the creation of these documents in a flexible and tailored manner that meets your requirements.
Discover how Supply Chain Junction helped Tarsus Distribution improve their warehouse operations by using the above functionality contained within the Manhattan WMS, as well as implementing new processes and systems. Tarsus increased their warehouse efficiency, customer service and subsequently their business success by 60%!
The features (or modules) of a warehouse management system include:
Distribution management is an umbrella term for all of the activities and processes within your warehouse. This includes things like inbound logistics, inventory management, outbound order processing and shipping.
Slotting optimisation helps you to determine the best locations for your inventory by strategically grouping items based on the following aspects.
This helps improve productivity, worker safety and order accuracy. Fast moving items are placed in the most accessible location in your warehouse, while large, heavy stock is placed toward the back of your warehouse where it’s unlikely to get in your way.
Omnichannel and increasing customer demands require greater productivity and efficiency. Labour management allows managers and supervisors to predict workforce requirements, track productivity and set incentives for staff. By rewarding and incentivising strong performers, you will boost staff morale and ultimately improve customer service levels.
There are typically four steps in the labour management journey, with each having incremental benefit.
1. Historical Average - this is where your associates are measured against past averages such a pick tasks/ hr. As a result of your teams simply knowing that they are being measured, you should see a 10% increase in productivity. The trick to this is to ensure that the measurements are consistent and this is where labour and WMS play a key role
2. Reasonable Expectancy - once you have defined and built the historical average, you can then start to set goals and expectations of your employees and teams. Once your employees have a benchmark goal and can be measured against this with the necessary feedback you should see further productivity gains
3. Engineered Standards - Engineered standards are typically made up of the following core elements, which once implemented successfully should result in roughly a 30% productivity improvement:
4. Pay Incentive - This is typically the holy grail of labour management - being able to reward your employees based on their productivity, safety and accuracy performance and once implemented successfully with result in enormous benefits sometimes up to 45 % from the current base. Once in place you should be able to regularly perform the following core functions
Billing management software is typically used by 3PL's to ensure they are systematically recording activity based costs, such as number of value added services activities and storage costs, so that they can accurately invoice their customers for the services they provide to them.
Warehouse mobility aims to ensure that management spend less time at their desks and more time on the warehouse floor, helping to increase staff productivity, improve order turnaround times and overcome inventory accuracy challenges. Warehouse mobility is becoming the go-to capability for modern warehouse managers as described in the unbound warehouse mobility whitepaper:
The following two minute video demonstrates how warehouse mobility aims to improve productivity, interaction, employee satisfaction and order cycle time:
You need a warehouse intelligence dashboard. The KPIs on your WMS dashboard pull in all the relevant information to allow you to assess the health of your business and make key decisions to help it stay on track. Monitoring your warehouse performance will assist you to compare data over time, reduce costs and ensure consistency.
The benefits of a warehouse management system include:
To ensure that you are achieving the maximum ROI from your WMS, you should be benchmarking your operations against the best and then using those benchmarks to calculate the potential ROI you can achieve by implementing the right WMS.
Warehouse management systems are used when your workload and customer order requirements exceed your ability to manually meet demand through the use of basic tools like spreadsheets, or if your ERP is not flexible and functional enough to support those requirements.
There are four cost elements associated with purchasing a WMS and the associated ROI
Want to know what it would cost to implement a WMS? We can assist you by providing you with an estimate based on your requirements. As a Manhattan Associates' Geo Partner in South Africa and the Middle East, let us assist you in determining the best solution for your business.
Depending on the vendor you are dealing with you’ll typically need to pay software license fees in one or a combination of the following methods
WMS license fee calculations are typically based on the following inputs
Most WMS vendors will have a project methodology that the follow which results in a baseline project implementation cost. Variants to this typically include:
Once the above elements are clearly defined, you should with reasonable accuracy predict the implementation fees required to successfully get your WMS up and running
Your deployment approach will dictate the bulk of your hardware costs. The two main choices are either on premise or hosted. If you choose on premise then you will need to cater for all of the server, infrastructure and third party licensing. If you choose hosting your costs will be the recurring hosting fees and ensuring that you have sufficient bandwidth to ensure that the operation can run seamlessly.
Other core costs will include:
Your Internal WMS team costs should also be considered and factored in. They typically contribute 50% or more of the effort in the initial implementation of a WMS and your success is heavily dependent on their involvement and skill set.
Want to know what it would cost to implement a WMS? We can assist you by providing you with an estimate based on your requirements.
