Why It’s Time to Implement a Warehouse Management System

Discover the many benefits of implementing a warehouse management system, including increased productivity and lower operating costs for your business.

Warehouses are a crucial part of the supply chain and inefficient operations can have a devastating impact on business. Without proper management, delivery timescales, inventory management and customer satisfaction can fall dramatically. Most customers won’t have any direct interaction with warehouses, but they will notice a disruption in the supply chain, such as empty shelves or late deliveries. Therefore efficient warehouse management is definitely key to staying ahead of the game. But how can you ensure that your warehouse is operating at its optimal best?

What Is a Warehouse Management System?

A warehouse management system (WMS) is a software application designed to support and optimise warehouse functionality and distribution centre management. Warehouse management systems control the movement and storage of your enterprise’s inventory, including picking goods from shelves for shipment or putting received goods away.

WMS solutions use barcode scanners, mobile computers, wireless LANs, and radio frequency identification (RFID) technology to accurately track the movement and storage of products to intermediate storage locations, or a final customer. A company might use a standalone warehouse management system, or it might be integrated into an all-in-one enterprise resource planning software (ERP) package. An integration link synchronizes the inventory data that is stored in the ERP system and the WMS.

An ERP system like Microsoft Dynamics 365 Finance & Operations (D365FO) offers everything your warehouse needs in one complete system. It’s currently one of the most advanced warehouse management solutions on the market and its Warehouse module offers support with many processes, including:

  • Management of the dynamic and static warehouse structure;
  • Barcodes and RFID tags;
  • Management of inbound/outbound docks;
  • Rule-based product storage;
  • Automated inventory control;
  • Product reservation and shipping according to FIFO or LIFO model;
  • Integration with warehouse equipment (TDE, conveyor, sequencer, automatic sorter and packer);
  • Configuration of tactical and strategic planning;
  • Printing of supporting documents.

The above have a range of benefits for your warehouse business, which we’ll discuss in more detail further on.

Potential Issues Faced by Warehouses

A disorganised warehouse can face productivity barriers and these have consequences for the overall success of your operations. We’ll look at some potential issues faced by warehouses in more detail below.

● Missed deliveries
Inventory shortages can lead to missed deliveries, so it’s vital to have accuracy when it comes to your stock. Missed deliveries can cause huge disruption for the supply chain, not to mention unsatisfied customers.

● Unsatisfied customers
Unfulfilled orders and slow delivery times lead to unhappy customers, which can damage the reputation of your business. One bad experience can result in no repeat custom, so it’s important to make the customer’s experience as smooth as possible.

● Not having access to the right data at the right time
Thanks to the technology of the modern world, we have access to a wealth of data at our fingertips. Warehouses rely on a range of technology, including RF guns, tablets, visual control boards and warehouse management software, but the technology itself isn’t enough – it’s vital to have access to the right data at the right time.

Lack of real-time data can have a significant impact on the efficiency of your operations but a warehouse management system directs and optimises stock put-away based on data gathered in real-time.

● No end-to-end visibility
Warehouse operations often fall in the middle of the supply chain. This means that there are many external factors which can have a direct impact on operations, such as volume spikes, customer sales, or the weather. These can both impact inbound and outbound networks so it’s important to have end-to-end visibility. Warehouse management systems can be integrated with ERPs to give greater visibility and help you manage these external factors.

● Inventory accuracy
If manufacturers don’t have full visibility of their inventory, they risk running out of stock at the wrong time. Another issue is carrying too much stock, which can decrease cash flow and increase expenses of extra materials.

● Inventory location
Lack of inventory oversight can slow down operations and increase costs, and as businesses know, time is money. Without adequate insight into inventory location, pickers can take longer to locate the items to ship, which then slows down the loading process.

How Can a Warehouse Management System Help?

The issues mentioned above can have a significant effect on your warehouse operations, but luckily a warehouse management system can help. Implementing a WMS can help your warehouse reduce labour costs, improve inventory accuracy and increase customer satisfaction. There are many benefits to using a warehouse management system, and here are the most important ones.

Increased productivity

Warehouse management systems can be used to assess workers’ skill levels, their proximity in the warehouse, their equipment and the available tasks. They can then assign the right task to the right person at the right time, drastically increasing efficiency and productivity for your business.

Scanning barcodes and automated entry control also eliminates the need for work to be double-checked, saving time and increasing productivity in the process.

Strategise for business growth

Cloud-based WMS’s can be scaled quickly as businesses grow and supply chains become more complex. They’re also incredibly flexible and can be reconfigured to align with changes in the market conditions or your business requirements. Full ERP solutions also provide the relevant data in real time so you can clearly strategies for business growth.

Better warehouse design

A warehouse management system allows organisations to customise workflow and picking logic. This can help to improve warehouse design and ensure that it’s optimised for inventory allocation. Features of a WMS can also maximise storage space and account for variances in seasonal inventory to make the most of the space.

Lower operating costs

Many of the benefits above, such as increased productivity and better warehouse design, will have the additional benefit of lower operating costs. An improved warehouse design lessens potential costs as a result of excessive material movement or time consuming retrieval.

WMS solutions can also help maintain material rotation, for example by using a first-in, first-out system. This helps to reduce waste and improve worker performance, lowering your overall operating costs.

Decrease in errors

Support from a programme like D365FO can significantly reduce errors. Scanning capabilities improve pick accuracy, reducing the chances of mispicks or other errors.

Improved customer service

A WMS allows for more effective shipment management, which leads to improved customer service. Inbound and outbound planning can be efficiently managed using a system that can adjust the movements of inventory and equipment.

Warehouse management systems also improve the efficiency of picking and packing as managers can choose between zone, batch, or wave picking in a way that lowers any holdup or issues caused by traffic or ineffective employee locations. This improves customer order cycle time and reduces the chances of error, resulting in improved customer relations.

Transparency over supply chain management

A warehouse management system optimises an organisation’s internal operations and this can then be extended across the wider supply chain. Some systems (such as integrated ERP systems) can connect the WMS to transportation management solutions to further optimise the supply chain process.

ERP integration allows you to share details of your inventory with suppliers and you can streamline the entire warehouse process from inbound receipts to outbound deliveries.

Improved inventory visibility

A warehouse management system provides visibility of accurate, real-time inventory levels. This gives your business greater transparency over the estimated supply so you can avoid backorders or over-ordering of stock.

Features such as scanning, RFID or other location-tracking methods also reduce the chances of inventory becoming lost, misplaced or forgotten within the warehouse. A full ERP system like D365FO can also forecast demand by sharing real-time information about how products are performing. This gives businesses a great overview of how their inventory is performing and they can adjust orders where necessary, for example, to account for seasonal changes.

Improve Your Warehouse Operations with ICS

Looking to improve your warehouse operations? Get in touch with the experts at ICS, the top-level provider of ERP implementation and customisation services. We work with Microsoft Dynamics 365 F&O, one of the most advanced warehouse management solutions on the market.

Our expertise allows us to implement a range of functions based on D365FO, including management of the dynamic and static warehouse structure, barcodes and RFID tags, management of inbound/outbound docks, rule-based product storage, automated inventory control, and much more. We also develop our own add-on solutions for AX/D365FO which help companies to streamline their warehouse oprations by applying the most efficient ways to load vehicles and handle inventory.

Digital transformation is the way forward if you want to improve business processes, value for customers and innovation, so for more information about how we could transform your business with a warehouse ERP, contact ICS today.