Better Faster Stronger with a WMS
Do you really need a WMS? You probably bought an ERP (Enterprise Resource Planning) system with the hope that it would take care of your inventory management.
I am amazed at how many- even larger companies- still run their operations without a WMS. In most of these cases, they use their ERP as their warehouse management system. The ERP can typically print a pick list, print shipping docs, track inventory, and execute the necessary transactions.
The way I describe it is like this: an ERP tracks what you did, but it doesn't track how you did it. And it doesn't direct the user through the actual process of getting the work done.
ERP systems are born out of the needs of Accounting. The primary goal is to properly account for all the financial implications of running a business. WMS systems are born out of the needs of Operations.
Let me give a few common examples of what we hear from ERP-directed operations:
"We receive product, but we can't ship it until receiving posts it to the ERP. It could be hours, or sometimes a day or two until we can see that product in inventory."
"We receive products from the manufacturing line, but the ERP cannot ship it until the Work Order is closed."
"When I look in the ERP system for inventory, I also have to check the floor because I don't trust that it is caught up."
"The ERP tells me what to pick but doesn't give me the optimal way to pick it."
"The ERP system does not tell me the optimal place to put something. It only tells me to go to the fixed bin location but does not understand when it’s full."
"The ERP does not direct the users in their work."
"If something is off, it won't tell me who did the work, or when. I need more accountability from the users."
"When customer service has a question on an order shipment, they call down here and we have to go out to the floor to check on it."
"Where should I put this product, the bin location is full?" - "I don't know, go ask Melissa."
All of these types of issues add friction to operations. Death by a thousand cuts.
Here are the ways a real-time WMS can help.
DIRECTING USERS IN THEIR WORK
"Tell me what to do" instead of "Tell me what you did".
This gives you a 3x faster ramp-up for new users, decreased travel time for picking, decreased searching time for picking, elimination of errors, and a consistent result regardless of who is doing it.
By directing users from a WMS, you get rid of tribal knowledge process bottlenecks.
INSTANT COMPANY COMMUNICATION
Everyone in the company benefits when they can just look up something in the WMS and not have to call around, email around, and hunt for information. This is a huge benefit that streamlines the whole organization.
"Did Order 1234 ship yet?"
"Did PO 1234 come in yet?"
"How much of SKU XYZ do we have in overstock?"
"What products are set to expire in the next 30 days?"
SUPERCHARGE LABOR PRODUCTIVITY
Picking labor typically accounts for over 2/3 of warehouse labor.
And here is how picking time breaks down:
Traveling: 55%
Searching for the right product: 15%
Extracting: 10%
Paperwork and Admin: 20% (source)
A WMS helps by 1) minimizing travel time by optimizing the pick path, 2) directing the user to the right location and verifying the product with a scan (searching), and 3) automating the paperwork and admin time.
LABOR MANAGEMENT AND FEEDBACK
“69% of employees say they would work harder if they felt their efforts were better recognized.” -HR Daily Advisor
A WMS gives you the tools to measure and provide feedback on user productivity. Simply giving timely feedback to your users improves productivity by up to 20%.
SOME FINAL STATS
Here are some typical results from implementing a WMS:
Improved labor productivity by 10-45%
Reduced inventory by 5-40%
Improved warehouse space utilization 10-40%
Increased picker productivity by 10-50%
Reduced shrinkage by 50-99+%
Increased shipping accuracy to > 99%
Increased supplier conformance 99%+
Customer service efficiency +10-50%
Increased inventory availability +10-50% faster (source)
The best-in-class, most efficient warehousing operations use a WMS. If you are still relying on your ERP to run your operations, perhaps it's time to level up!
Cheers,
Nate