In the course of implementing business software solutions for our customers, we frequently delve into the area of warehouse management. Stands to reason: We work a lot with manufacturers and distributors. Most have warehouses, and most of those have warehouse… challenges.
One current project involves customizing our own warehouse management solution (shameless plug: it’s called E-Z WMS, and you can learn more here). I was mentioning this to an acquaintance recently when they asked: Why? I was taken aback for a moment, when he clarified the question: How do you help people with their warehousing?
I thought for a moment, and said something along the lines of how “we make them more efficient, we cut labor costs, we automate processes, we enable them to ship faster, reduce walking-around-the-warehouse time, eliminate most mistakes. That sort of thing.”
Well, “that sort of thing” I got to thinking, could stand a little clarification. So we’ll take a look in our next couple of posts at just what it means to “improve the warehouse.” In other words, in what sort of actual ways does a Warehouse Management System really help customers improve their operations?
The two biggest reasons people spend money on a “Warehouse Management System” (hereafter, “WMS”) are both simple and (well, we think anyways…) obvious: Labor and Inventory. Or as a sort of corollary: Time and Money.
Labor is usually the Number One cost-saving motivator. Moving more product through the warehouse with the same staff is a form of savings: ship higher volumes at the same cost. Not having to hire temp labor during peak times is another. Even shipping the same volume, but needing fewer people to do it works for labor cost savings. Top line growth without added labor (warehouse) costs means bottom line improvement, i.e., more profit.
And that’s what WMS and wireless handhelds together do for companies: they allow you to ship more with less — less people, less time, less mistakes. Continuously. And all those cost savings truly do add up.
Moreover, a WMS, once properly implemented, will always reduce your picking, packing and shipping errors. Fewer mistakes = fewer returns = lowered overall costs. Happier customers from fewer mistakes also = more orders, eventually.
Order picking typically represents about two-thirds of the total labor hours that go on in a warehouse. So even a 10 or 15% improvement in accuracy can add up to real money.
Finding stock is another biggie. Ever taken a look at the amount of time your staff spends “looking for something” in your warehouse? Trust me, it’s worse than you think. What’s the benefit of knowing right where it is, all the time, instantly? Answer: money. A WMS directs your picker to the right bin, right away. It eliminates product searches, mindless meandering, wrong turns and all the other things that waste time in the warehouse.
One more labor saver of a sort: a warehouse worker doesn’t really have to know much. Too many warehouses rely on the craniums of the picking staff to know where stuff is. With a WMS, you can train a new user in about a day – literally – how to find stuff, pick it properly, and stage it for shipping. And when you lose that person, you’re not decimated by the loss of a knowledgeable person: a directed WMS system makes it easy to teach a new person the ropes – quickly.
Because after all, when time is money, time IS of the essence.
More specific cost savings in our next post… Next up: Inventory.
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