Benefits of a WMS to enhance efficiency and control in your warehouse
If you’ve read our 7 Steps to a Smart Warehouse guide, you will know that warehouse management system (WMS) software can greatly enhance warehouse processes, efficiency and control. In this post, we explore the benefits of a WMS, find out how it differs from an inventory management system (the two are often confused) and help you to decide what type of WMS would suit you best.
Warehouses, and warehousing requirements, are growing rapidly: in the UK alone, the size of the average warehouse has increased from 20,160 square metres to around 31,590 square metres since 2015. What is more, processes within those warehouses are becoming more complex: thanks partly to e-commerce, omnichannel retail and the demand for ever-faster delivery times, it is increasingly rare for warehouses to deal solely in whole-pallet deliveries. Instead, inventory must be transported, stored and delivered in part-pallet, small batch or single-item lots – or a combination of these – which means that warehouse managers and staff must now have a grasp of many more processes and possibilities than ever before.
While it is still possible for a small business to run a warehouse manually, the advent of the digital supply chain may sound the death knell for spreadsheets in this sector. Supply chains are now being digitalised at speed and scale for a host of good reasons, including the need for accurate data, cost-effectiveness and 24/7 visibility. The pivotal role of the warehouse in supply chains makes it exceptionally difficult for warehouse managers not to join in.
Consequently, many warehouse operators are turning to WMS software to automate processes, improve accuracy and generate business insights. But what are the key features of warehouse management systems, and what can it actually do?
Key features of warehouse management systems
Warehouse management system software can provide multiple benefits for warehouse control and operations, although some of these depend on the nature of the WMS installation and whether it is connected to wider company systems (of which more shortly). The potential benefits of a WMS include:
- WMS software provides a central point of insight and control, bringing together all aspects of warehousing to give you a 24/7 real-time view of every aspect, down to the smallest storage bin or item. This is particularly effective when used alongside barcodes and/or RFID for inventory tracking.
- This constant real-time view allows the warehouse to take its place in the digitalised supply chain, where it can ‘see’ its own activity in context, and simultaneously be seen by partners in that chain.
- WMS provides a single, shared source of truth regarding activity, orders and stock in a secure and reliable manner, which is also vital for digital supply chains.
- WMS can automate processes and documentation, to create an end-to-end solution and monitoring.
- Many WMS systems can be plugged into existing systems such as enterprise resource planning (ERP) software, supply chain systems and data analytics. This gives the company an additional dimension in its view of the warehouse, allowing it to analyse and then optimise processes, locations – even picking and packing routes – to give the best outcomes and, potentially, save costs.
- WMS may automate documentation, such as bills of lading, and processes, which can save hours of work and ensure accuracy.
Together, these increase warehouse efficiency and drive the most efficient use of space which are, as we have seen in the introduction, major advantages in the current market.
In terms of the nature of your WMS installation and connection to wider company systems, these are key points of differentiation when it comes to choosing your WMS and provider. Warehouse management system software may be installed on your company’s own network (on-prem) with or without connection to other systems you may already have, such as ERP or inventory management software. This gives you total control, but can make sharing data (including within supply chains) problematic or at least, not straightforward. Cloud-based WMs software is designed to provide real-time information that can be shared: it also provides back-up data and remote access. Cloud-based WMS can often be plugged into other systems, including data analytics and ERP, but this may depend on the nature of the services involved, for example if they are proprietary, bespoke or simply quite old!
Warehouse management system vs inventory management system software
Warehouse management system software is often confused with inventory management system software, and it’s not hard to see why. After all, they both deal with knowing where things are!
In practice, inventory management systems are generally simpler than WMS, and are used to forecast, order, receive and distribute items. Like WMS, inventory management often relies on barcodes and/or RFID to expedite the collection of data and ensure its accuracy. The focus is on the size, location and status of inventory – if inventory management is digitalised, it can also collect data that informs better purchase, storage and distribution patterns, which can in turn generate better business outcomes.
In contrast, WMS is a related but more complex software package – in fact, some WMS packages include inventory management system software as a constituent part. However, WMS has wider scope and not only tracks the receipt, movement and location of inventory within the warehouse, but can also generate better working processes, automate associated tasks and integrate with wider business systems to provide an end-to-end solution.
Considerations when choosing warehouse management system software
There’s no doubt that a well-chosen WMS can greatly enhance your warehouse operations and the business generally, but when you are looking to buy a WMS, it’s important to know what you need. Different businesses have very different requirements, so you may like to consider the following questions:
- Do you need warehouse management system software or inventory management system software? If the answer is ‘both’, consider looking for a WMS package that includes inventory management, or for a WMS and inventory management that can both be connected to your wider company management systems, so that you can combine business intelligence.
- Do you want on-prem or cloud-based WMS?
- Do you need your WMS to link with other systems and if so, is this possible with the systems you have in mind?
- Consider your current pain points: what must you have from WMS, and what would be nice to have? What is not working well and could be improved?
- If you are a business planning for growth, how much do you need your WMS package to scale? It is generally better to purchase for growth, than to have to buy an entirely new system later.
- Does the WMS have functionality that can be turned on and off, so that you can shut down unused elements but switch them on again when the company grows and you need them?
- How much training will be required and where will it come from?
- Does your preferred WMS allow you to integrate into digital supply chains? What do your key customers and partners need from you in that chain, and does your WMS help you to provide it?
You may find it helpful to map out your needs; both those that exist now and those you anticipate arising over the next 5–10 years, and have these to hand when you discuss WMS with a potential vendor. Your warehousing is likely to be the powerhouse of your business, and it’s natural to want the best ROI from your WMS software, so it’s important to get the choice right from the outset and ensure that it will scale with your growth if required. A good vendor will be happy to discuss these issues with you.
For more information about WMS and the solutions we offer, please download our guide, 7 Steps to a Smart Warehouse and visit our pages on WMS and inventory control solutions. You can also get in touch with our warehousing experts today.