As any small, inventory-based business grows, it will inevitably come to a crossroads: Will the warehouse stick with basic software / manual methods of doing things, or will the owners invest in a more sophisticated warehouse management system?
Warehouse managers are typically the first ones to recognize the pain points that signal the need for improved processes—whether that means getting warehouse management software or improving what’s already in place. Unfortunately, it can be easy to focus on the day-to-day struggles and not notice red flags in the system until it’s in crisis mode.
To ensure you are ahead of the curve and prepared to take the next steps as a growing business, asking the following seven questions to help determine when it’s time to take the plunge and get (or upgrade to) a WMS:
At the heart of many warehouse problems is a lack of clarity about the quantity and location of all of the products on the shelf. This is especially true with manual inventory counts or when data is kept in Excel spreadsheets.
Manual processes introduce human error such as misreading labels, miscounts, transposing numbers, and duplications. And even if the numbers are correct, the time it takes to manually input the data into a computer means the information is outdated as soon as it is available.
A good example of this is doing cycle counts. A small warehouse with minimal volume might do fine doing things manually. But as inventory grows, manual counts take too much time and are riddled with human error.
Having multiple warehouses adds another wrinkle. Not only must managers know how many of a certain SKU are on hand, but at which of several locations. If one location runs out of an item, it should be easy to see where more is located and arrange for its transfer.
Warehouse management software solves these problems with accurate, real-time data. The information is more trustworthy and up-to-date than with a manual system. And when combined with a well-thought-out labeling and slotting plan, managers will know how much of each item they have and where they can find it.
No one can get things right 100% of the time. But make too many mistakes and it gets expensive. Shipping incorrect items and quantities, or keying in a wrong address can all trigger costly returns. Worse, customers might bail on a company for someone who is faster, more accurate, or cheaper.
Mistakes and inefficiencies in fulfillment practices on the warehouse floor can mean that products won’t get to customers when promised. This, in turn, leads to additional fees for rush shipping to try to keep the number of days to fulfillment down.
A WMS increases speed and accuracy to satisfy customer demands. Warehouse management software can help by organizing the warehouse layout for optimum efficiency, and drawing out pickpaths that eliminate bottlenecks. Automation throughout the warehouse will make better use of resources, and barcode scanning will improve accuracy from the receiving area all the way through put-away, picking, packing, and shipping.
Backing up all of these improvements is the ability to track metrics about every aspect of the operation. Real-time analytics provide insight into key performance indicators such as pick rate, item velocity, and return rate.
A certain amount of lost or damaged inventory is expected in every warehouse, but without good inventory management, the numbers can get out of control. Warehouses with improper slotting and storage practices can see an uptick in product damage and breakage. A WMS can assist in finding the best storage solutions depending on the product, and provide a way to measure the breakage rate.
Warehouse management software is also essential for perishable items. It is the only effective way to track expiration dates and maintain strict FIFO (first in, first out) protocols. Trying to manage inventory control over consumables and other expiring products with a manual system is likely to create more waste than expected.
Is the warehouse really too small? Or Is there just an inefficient use of the space? Instead of looking for more square footage (which is likely to be nixed by upper management), consider giving a warehouse management system the opportunity to analyze and recommend the most effective layout. The amount of unused or misused space is often eye-opening.
Warehouse management software can design shelving and slotting layouts that will reduce clutter as well as speed up fulfillment. And a WMS can even help regulate shipping schedules so the receiving department doesn’t get clogged with incoming products waiting to be put away.
Infoplus utilizes artificial intelligence and machine learning to help enhance the optimal warehouse layouts and pick paths for fulfillment - streamlining operations and consistently keeping a pulse on the warehouse’s efficiency. Our team is happy to show you how.
Without accurate, real-time data, there is a strong possibility of stock-outs and backorders. Managers are forced to guess at demand rather than looking to reliable forecasting.
The solution is a warehouse management system that can analyze historical trends and market data to extrapolate future needs and predict spikes in demand. This is often used for seasonal sales, particularly the OND holiday rush. But WMS forecasting is also useful in predicting which items are most often sold together, and when a product’s popularity has decreased and it should be discontinued.
Inventory management becomes so much easier with a WMS, which can be set to give low-stock alerts. When inventory reaches a certain level, the system can trigger a replenishment order. Managers can be confident that they will never run out of popular products because of peak season, or whatever other market factors are in play.
A WMS can also provide insight into peaks and valleys in overall order volume and which items are selling more or less, which can help inform strategy and key decision making related to growth and ROI.
Staffing decisions are difficult when managers do not have accurate data about their fulfillment needs. Workers may stand around without much to do one week, only to be working overtime to fill orders on time the next. Not only is this costly, it can lead to unhappy employees and high turnover.
WMS helps with labor issues in several ways. If a team can work more efficiently, it may not be necessary to add more staff. Automated equipment and barcode readers give workers the tools they need to do their jobs well, replacing manual, repetitive tasks. And predictive analytics tell a manager exactly how much help they’ll need on any given day.
Additionally, using a WMS means you likely have access to the provider’s support and training teams, which are often equipped with warehouse experts poised to deliver consulting insights.
Nothing can make a manager lose sleep at night like the prospect of changes that will make their job harder. And those potential changes are common for companies that are growing. If a warehouse is struggling to keep up now, how will it manage when the company opens an additional warehouse, adds new SKUs, or expands its territory? Even the addition of kitting or product customization can push warehouse staff beyond its capabilities.
Any big changes deserve a review of how the warehouse is managing its inventory and fulfillment processes. Manual systems and basic warehouse management systems are likely due to be retired and replaced with something more robust. Solutions should be able to help with current issues as well as keep up new problems that are bound to come while scaling the business.
Deciding to implement or upgrade a warehouse management system involves overcoming concerns about the ROI, as well as fears of downtime, training, and employee resistance. The answers to the above questions are good indicators that the system in place is inadequate for scaling the business in any significant way.
Warehouse management software is a significant investment, but as the saying goes, you need to spend money to make money. The next step is to convince the powers that be that the cost savings and improvements in productivity will help keep a business competitive as it grows.
Infoplus WMS is poised to handle all the growing pains mentioned in this article and then some. Through automation, data visibility, and limitless customization, Infoplus helps businesses of all sizes wrangle their operations to scale their business and reach their goals.
Infoplus is the last WMS you'll ever need -- let us prove it to you with a demo.
