A warehouse management system (WMS) is a type of software that organizations widely use to administer and control warehouse operations from the time goods or materials enter the warehouse until they move out. In basic terms, a WMS helps in the optimization of all your warehouse operations.
A WMS system is extremely important because it tracks all the materials in your warehouse and also creates systems to streamline how workers pick products and pack orders. It allows you to track merchandise entering the warehouse, being packed onto shelves and into various locations, and when it leaves the warehouse for order fulfillment.
A WMS also provides visibility into an organization’s inventory at any time and location, whether in a facility or in transit.
Today, in this article, we will dive deep into the benefits of warehouse management systems for your organization. Later on, we will discuss the types of WMS for gaining efficiency in the warehouse.
So, without any further ado, let’s get started!
Why use warehouse management systems for your business?
A warehouse management system can help speed up your order fulfillment and keep track of what is selling well. You can also track raw materials when they come in and make sure they are in the right place for stocking and manufacturing.
Further, let us discuss in detail, the key warehouse management system benefits and why it matters for your business.
Offers real-time inventory data
A warehouse management system’s data gives the inventory information to workers whenever they need it. A WMS system can read serial codes and keep track of each item from the time it enters the warehouse. This, in turn, speeds up the outbound delivery process.
A warehouse management system can also reduce the workload of businesses. For instance, Magid Glove & Safety uses a warehouse management system to maintain an accurate inventory of its products.
The WMS’ real-time cycle counting allows the company to skip a physical inventory each year and provides the data on how much product is in each location.
Reduces operating expenses
One of the major warehouse and inventory management system benefits is that it reduces operating expenses to a great extent. It helps determine the most effective use of both space and labor, resulting in reduced waste. A WMS system enables organizations to ascertain where to keep certain products, materials, and equipment to optimize the flow of the warehouse.
Some advanced warehouse systems have floor simulators, enabling users to create potential floor plans within the system. These simulators allow them to place shelves, pallets, and other equipment in the warehouse as required.
A warehouse management system also provides better inventory visibility. This reduces businesses’ just-in-time inventory and helps save money because they don’t need to store the items. A WMS can also reduce waste by implementing a first-in, first-out rule so the oldest perishables go out first.
For instance, Nature’s Best, one of the leading brands in health and natural food distribution, integrated a warehouse management system to optimize their business operations. This new system reduced labor costs by over 30% and more than doubled productivity.
Accurate billing management
Warehouse management solutions come with in-built or third-party integrated billing management tools to provide this functionality. This functionality lets you use activity-based billing to track all the supplier-related activities and generate the proper fees accordingly.
Additionally, a warehouse management software may also process credit card payments and connect to major e-Commerce platforms.
[Also Read: Payment Gateway Integration: The Process and What Nexts]
Improves demand forecasts
With the help of a warehouse management system, a company can get insight into future demand. As a WMS provides better inventory visibility, a company’s demand forecasts can become more accurate.
In addition, a WMS can collect data on current outbound and inbound movement of materials and historic trends for a forecast. When a warehouse has accurate information on demand forecast, warehouse staff can maintain optimal inventory levels.
For instance, the automotive maker Renault has installed a warehouse management system in its production warehouse in Seville (Spain). With WMS in place, the company runs all in-house processes and operations without a hitch and gets real-time inventory information, which results in accurate demand forecasting.
Enables continuous improvements
Warehouse management systems enable continuous improvements within an organization. Warehouse management software vendors introduce new features frequently to reflect current industry best practices. This allows organizations to stay on top of the latest developments and enables them to continually improve their processes based on these innovations.
And, if the warehouse management system is cloud-based, it can update instantly, which can help reduce the need for large, expensive IT teams. But businesses with an on-premise system may or may not receive regular updates from their vendors, depending on the terms of their contract. This is why many organizations are now moving to the cloud.
Offers faster product delivery
There’s no denying the fact that today’s users like and expect to get fast product delivery. And for this to happen, warehouse distribution must also be quick. Integrating a warehouse management system speeds up the shipping process. This means your customers get their products delivered faster and are likely to return to your online site or application.
With such management systems, the processing is much quicker. This is because pickers know where to locate the item. A WMS system uses an automated process to find, track, and ship goods quicker. It also saves time because all the information is no longer updated manually or with a slow system.
For example, Decathlon uses a warehouse management system to prep and ship out 3,000 orders a day for online users and around 55,000 items for all their physical shopfronts in the UK.
Enhances security
Most warehouse management systems require employees to make use of individual user accounts when entering transactions. This will create an audit trail that connects specific workers to specific transactions, reducing the risk of theft and improving accountability. It also enables employers to identify new training opportunities and other ways to improve employee practices.
In addition, user-based access levels prevent unauthorized access to certain information and reports. This only allows each user to see as much information as is required for their work. This way, you don’t have to worry much about company secrets and losing your competitive advantage.
[Also Read: Enterprise Data Warehouse: How it Benefits Your Business?]
Increases transparency
One major benefit that warehousing and inventory management solutions provide is transparency. They make processes like shipping, order fulfillment, and tracking completely transparent to all the workers.
With such transparency, the employees are able to access the real-time data and serve their customers with precise and accurate information.
Optimizes supply chain
One of the major functions of a warehouse management system is to help optimize a warehouse’s internal operation, which then extends to a broader supply chain. A WMS streamlines the entire warehouse process, including inbound receipts and outbound deliveries, thereby reducing costs and improving operational efficiencies.
Warehouse staff achieves accurate and faster shipments by eliminating or reducing unnecessary or non-productive activities. These savings in cost and time coupled with improved processes can then be passed along to internal and external partners, allowing them to improve their own business operations.
With improved inbound receiving, the delivery time is also reduced. This, in turn, enables delivery partners to better leverage their equipment and resources and shippers to manage inventory levels.
Such high inventory visibility and optimization of the supply chain also result in improved relationships with suppliers as well as customers. While the supplier enjoys reduced wait at docks and loading bays, customers enjoy reduced delivery lead times, fewer order inaccuracies, and improved order fulfillment. With such systems in place, the reputation of your business among customers and suppliers also improves.
Improves employee morale
A warehouse management system can enhance employee satisfaction and experience.
A WMS can automate repetitive, manual tasks within the warehouse, which can improve employee morale. Automation has the potential to make employees more content because they can use their time more efficiently, which reduces over time.
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