What Benefits are Associated with Warehouse Management System?

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Daily warehouse processes that warehouse managers have to keep an eye on include managing inventory, demand, shipping, returns, security, and warehouse injury. Turning to WMS (Warehouse Management System) software is a great way to balance warehouse efficiency, safety, and profitability. It enables warehouses to automate a range of processes and brings benefits that significantly reduce human error occurrence that can cause hazards.

If you are at the forefront of a high-growth business, then exploring the benefits of a WMS is imperative for you. High-growth enterprises with on-hand inventory can benefit from using a warehouse management system because it can boost their operational efficiency for both physical space and labor. It can assist with inventory control to improve accuracy, speed, and output, enhance warehouse productivity, increase asset utilization, and monitor work processes at various levels.

WMS (Warehouse Management System) is a software solution that enhances visibility into your business’ inventory and helps manage supply chain fulfillment operations. For those who have been wondering what benefits are associated with warehouse management systems, keep reading.

Benefits of Using a Warehouse Management System

  1. Inventory visibility

One of the most critical components of WMS is inventory visibility. Warehouse management systems software provides accurate, real-time data on your inventory through RFID tagging, serial numbers, and barcoding. That allows users to document each item as soon as it enters the warehouse, inventory movement within the warehouse, and its movement during transportation from one location to another. Inventory visibility is required for creating item demand forecasts, which provides valuable insight into which items are most popular with customers during specific periods of the year. Demand forecasting helps company leaders decide which products they should invest in and which ones may be losing the market race.

Improved traceability of your inventory is a WMS advantage that’s helpful in an item recall event. By use of inventory tracking features, the ability to match specific serial or IoT/batch numbers with incoming receipts and outgoing shipments is what allows for complete traceability. The ability to trace items enables accurate inventory planning and allocation, inventory accuracy, lowers potential redundancy, and provides current information for either future recall situations, service maintenance, and traceability.

  1. Lower Operating Expenses and Optimized Space

WMS software helps optimize your warehouse flow by analyzing the most optimal floor space use (based on the material and task characteristics). In the warehouse management system implementations, warehouse managers use the floor plan analysis to determine how to make the most of the warehouse space and find opportunities for reducing waste (waste of time for locating an item and waste of premium floor space). Also, that will reduce costs resulting from time-consuming placement/retrieval and excessive material movement.

WMS programs also help with maintaining material rotation, whether through FIFO (First-In, First-Out), LIFO (Last-In, First-Out), or FEFO (First-Expired, First-Out) practices. FEFO or FIFO can maintain product quality for items from aging out while stored, while LIFO enables cost-effective movement and use of space. A WMS software works with flexibility and versatility, making it easy to make adjustments necessary to maintain the best choice of the correct inventory to pick, item floor location selection, and help manage worker performance and physical movement.

  1. Labor Management

A warehouse management system software can better assign the right task to the right warehouse employee at the right time while considering their skill levels, proximity in the warehouse, available tasks, and their equipment. One of the biggest benefits that a warehouse management system can provide to improved labor utilization is the optimization of travel time within the warehouse. It can focus labor on the high-priority and highest impact activities while finding the most suitable worker to perform a particular task. The system can assign jobs on a daily basis and efficiently design schedules by using labor forecasting and KPIs. It can also seek areas of improvement and identify top performers. By scanning items from their entry into the warehouse and throughout their movements, you can speed up the recording process and save time by eliminating the need for double-checking work. It’s crucial to understand how resources are being spent, given the fact that labor cost makes up 60-65% of the average warehouse budget.

  1. Optimized Supply Chain Management

Within a warehouse, your WMS helps streamline all inbound and outbound logistics processes, reducing costs and improving operational efficiencies. It optimizes your warehouse’s internal operations, which extend to the whole supply chain. All the savings in cost and time (coupled with real-time information and improved processes) can be passed along to your partners (both internal and external), enabling them to improve their operations.

For instance, when you improve inbound receiving, you also reduce delivery times. That enables your delivery partners to utilize their resources, equipment, and shippers to manage inventory levels better. Improved data increases reliability and reduces risk, which benefits customers, suppliers, and shippers. That same data can be shared and leveraged back to a customer, an ERP system, or a transportation management system (TMS). The results – items arrive to end recipients more quickly, while the partners upstream get a chance to improve their planning.

  1. Improved Security

When entering transactions, most WMS solutions require warehouse employees to use their individual user accounts. That creates an audit trail that connects employees to transactions, which reduces the risk of theft and improves accountability. Such user-based access prevents unauthorized access to critical analysis and reports. That way, the company doesn’t have to worry much about company secrets getting leaked and losing competitive advantage.

  1. Continuous Improvement

In an enterprise, improvement relies on different aspects – from travel paths during pick and pack to employee engagement. One of the most important benefits of using WMS software is consistent updates. WMS vendors regularly roll out new features to keep track of the industry’s best practices, making it easier for companies to stay on top of the latest developments. It allows them to utilize these innovations to improve their processes. New features and updates can easily be added to cloud based WMS, which makes continuous improvements even easier. That’s one of the reasons why many enterprises are moving their warehouse operation to the cloud.

  1. Employee Morale

Employees feel happier in their work environment when operations flow seamlessly. A modern warehouse management system helps provide structure in the workplace, and structural support is essential for boosting employee morale. Knowing what they should do and where they should be helps them find fulfillment in work and reduces stress. With real-time feedback on their performance (real-time open feedback loop), the warehouse manager can offer more constructive suggestions, while setting goals becomes a straightforward process. Measuring improvement and growth is standardized thanks to the WMS, which allows for a greater sense of self-worth and healthy competition among warehouse personnel.

All this contributes to a more organized and relaxed work environment, which helps employees feel more satisfied, enthusiastic, and safe, enhancing your business’s overall success.

  1. Improved Relations with Suppliers and Customers

Besides improvements in the organization itself, a WMS solution brings benefits that extend beyond. With the ability to schedule the receipt of shipments and increased inventory visibility, WMS helps optimize both the supply and demand chains. With reduced order accuracy errors and reduced delivery lead times, more customers are satisfied with their orders, leading to more sales. On the supplier side, when your team is ready to accept incoming supply chain orders, your partners can move on to their next delivery much faster. Overall, the reputation of your company among suppliers and customers improves under such a system.

  1. ERP Integration

Having a “clean” demand history (that’s not bogged with shipment issues, such as repeat shipments and replacement), you get a better view of your company’s overall operations. A well-balanced WMS can use such a “clean” history to determine the most optimal algorithm that calculates demand for item ordering purposes. An ERP (Enterprise Resource Planning) handles everything from market tracking to demand planning, HR to financials. To work properly, you must “feed” your ERP clean data.

  1. Better Billing Management

Most warehouse management system solutions either have a built-in management tool or integrate with a third-party solution to provide such capability. The billing management functionality allows you to use activity-based billing that tracks all billing activities related to a specific supplier. WMS software can also connect to significant eCommerce platforms and process credit card payments.

If you are in the process of choosing the best warehouse management software for your business, it’s imperative to pick one that has the right capabilities that meet your company’s needs. There is no one-size-fits-all solution when it comes to WMS. At this point, the key benefits of a quality warehouse management system are apparent, and you should contact your WMS vendor to learn more about goals for implementation, software’s capabilities, and ask any other questions you might have. The right WMS choice is the one that fits your business culture and model, providing you with the versatility, functionality, and innovation you need to thrive and grow.

By teaming up with a third-party logistics provider, you can get access to an advanced warehouse management solution as well as a logistics team with the best warehouse management practices. Redbird Logistics can provide guidance when it comes to making the most out of your warehouse management system. Besides that, you will also discover more about applying lean principles to your workflows and building a warehouse that’s efficient from the inside out.If you need more information, Red Bird Logistics is here to help. Feel free to contact us today!

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