Benefits of a Warehouse Management System (+ Choosing WMS Software)
When it comes to Ecommerce business, there are a lot of moving parts. Without someone – or something – to keep track of it all, pieces are bound to slip through the cracks. Thankfully, today there are advanced Warehouse Management Systems that can watch over everything, keeping your Ecommerce business on track and supplying valuable data to you and your customers.
What Is a Warehouse Management System?
Warehouse management systems are software programs that have been designed to optimize the warehouse and streamline procedures. In short, a warehouse management system (WMS) helps ensure that goods and materials move along in the most efficient and cost-effective way.
It does this by keeping an eye on warehouse design, inventory tracking, picking and packing goods, receiving and put-away, shipping, labor management, yard and dock management, and reporting.
First and foremost, warehouse management system software offers transparency, providing a look at the company’s inventory in real-time, whether in a facility or in transit. However, keeping track of inventory from the moment it enters a warehouse to the moment it leaves is not all a good WMS does; it also helps with returns management (and keeps returns to a minimum in the first place).
While some Ecommerce businesses have an on-premise legacy program, or “standalone WMS software,” these systems require a lot more manual work, are prone to problems, and often come with hidden costs. Cloud-based solutions, which also integrate with third-party logistics providers (3PLs), are considered the best type of WMS for just about any business, which is why those will be the focus here.
Warehouse Management Systems & Your Supply Chain
A WMS plays a key role in supply chain management by managing order fulfillment processes, from receiving raw materials to shipping finished goods. Let’s say some raw materials are received improperly, or parts were misplaced within a warehouse; this could slow or stop the supply chain temporarily, costing the company money and potentially customers.
A WMS keeps the whole operation in order, tracking inventory and making sure that goods are stored and sorted properly, as well as shipped and tracked accurately. It can even alert you to inventory oddities and spot potential problems before they become major issues.
A WMS supply chain model also generally involves an eCommerce platform (check out our list of the Top to Ecommerce platforms for 2021) in order to keep stock updated at all times (reducing backorders) and providing visibility to customers.
8 Features of Warehouse Management System
Earlier we plowed through a laundry list of features any good WMS should have. Here’s a deeper look at each of those qualities.
1. Warehouse Design
Warehouses are not always organized well, wasting space and lengthening the pick-and-pack process. Many WMS platforms can help customize workflow and picking logic to ensure that the warehouse is designed for optimized inventory allocation.
A WMS may even establish bin slotting to maximize storage space while taking into account seasonal inventory needs.
2. Inventory Tracking
A WMS platform will track inventory data from barcode readers and radio frequency identification (RFID) tags, updating information in the software’s dashboard so the latest information is readily available to anyone with permissions. It also helps ensure that goods can be found easily when they need to move.
3. Picking and Packing
Zone picking, wave picking, and batch picking can all be optimized by using a WMS. It may also offer warehouse workers lot zoning and task interleaving functions to guide their pick-and-pack process in the most efficient way.
4. Receiving and Put-away
This technology, available with some WMS platforms, quickens inventory put-away and retrieval through pick-to-light (PTL) or pick-to-voice (PTV) technology.
- PTL: Light displays are installed in shelving units and storage racks at every fixed pick location. The display units light up, one at a time, to show pickers which order line to pick.
- PTV: A computerized voice directs pickers to the right location via headset and instructs them on the quantity to be picked and any other instructions.
A WMS platform will send bills of lading (B/L) ahead of the shipment, generate packing lists and invoices for the shipment, and send advance shipment notifications to recipients.
6. Labor Management
Which employee needs to step it up – and which deserves a high-five? A WMS platform can monitor workers' performance by using key performance indicators (KPIs) that indicate who is performing above or below standards.
7. Yard and Dock Management
For larger operations, WMS platforms can assist truck drivers coming into a warehouse, guiding them to the right loading docks. Cross-docking and other functions of inbound and outbound logistics are additional features on some WMS platforms that companies may use as they begin to scale.
WMS platforms can generate automatic reports which help managers analyze the performance of warehouse operations, warehouse employees, and more. This allows them to anticipate potential problems and find areas for improvement.
Top 7 Benefits of WMS Software
1. Streamlined Warehouse and Customer Service Procedures
Communication between warehouse workers and the customer service department can often be siloed, resulting in a lot of miscommunication and wasted time going back-and-forth between the two.
Most WMS software provides transparency to the warehouse and customer service department through a centralized system. This allows both teams to track orders, fulfillment times, shipping procedures, and customer feedback in real-time, cutting down on confusion, human error, and bottlenecks that result in frustrated customers.
2. Accurate Inventory Counts and Tracking
Conducting regular inventory counts to make sure inventory is where it needs to be and in the good condition is both a time-suck and a money-waster! WMS software often allows workers to maintain count frequency simply by pressing a key or scanning a barcode.
Then, the WMS tracks goods and inventory automatically as they move about, freeing up valuable time and reducing labor costs.
3. Improved Product Safety and Security
Warehouses that struggle with compliance or safety issues should have a system that generates automatic reports frequently to make sure everything is status quo. Many WMS software does this, and can also identify potential issues with high-risk items (such as foods or pharmaceuticals) or high-value items (such as jewelry, which could be stolen, or tech, which is prone to damage during transit).
4. Scalability as Your Business Grows
The goal of most businesses is to continue to grow, making a WMS a necessity. Without one, as your business expands, warehouse and inventory management will become even more complicated.
In addition, you want a WMS that can grow with you, so it often makes sense to get one with all the bells and whistles right from the start even if you don’t use all the features right away.
5. Faster Order Fulfillment
Today, consumers want immediate gratification, which is why expedited shipping is so important. Studies show that, unless it’s a very niche or customized product, three days or less is the most acceptable timeframe for delivery.
So, if you’re going to compete with the Amazons and Walmarts of the world, or even the guy next door, a WMS can help. Efficient warehouse management software, working alongside barcode scanners, enables your team to pick and pack orders much faster, reducing fulfillment latency and processing times.
6. Reduced Processing Costs
When you increase fulfillment speeds, there’s a bonus benefit: you reduce process costs, oftentimes significantly. Be sure you calculate your customer cost per order before implementing a WMS so that you can see first-hand the ROI you receive due to reduced processing costs.
7. Reduced or Elimination or Errors
Businesses without a WMS often have people spending a lot of time on administrative duties, and as we all know, “to err is human.” A WMS combined with a barcoded inventory reduces the human element, which in turn, reduced the risk of error.
When picking, packing, and shipping, warehouse staff can just scan the barcodes and the WMS will let them know if the wrong product has been scanned. It will also automatically communicate inventory changes to other teams in real-time. So, not only are errors reduced or eliminated, but you’re also less likely to have frustrated customers – and those pesky poor online reviews they’re known to leave.
Choosing Your Warehouse Management System Software
For small and medium-sized Ecommerce businesses that need to watch their spending, it’s important to consider the costs you may incur when adopting a WMS. Cost of these costs include:
- IT labor
- Licensing fees
Of course, it’s also important to remember that while there may be some upfront costs, over time a WMS will pay for itself, and then some. In addition, many vendors selling cloud-based, Software-as-a-Service (SaaS), and integrable WMS solutions will often cover many of these costs themselves, so that your main responsibility will be paying for the software, licensing, and one-time implementation costs.
All that said, you may be wondering what the top warehouse management systems are, and which is best for you. We recommend you use Gartner’s Warehouse Management Systems Reviews & Ratings Guide. There are so many WMS software systems available, that it’s difficult to make a suggestion without first understanding your unique business needs.
With the Gartner site, you can search WMS software by company size, industry, and region, and then filter by the number of reviews and more. You can even comparison “shop” between systems. Of course, we can help you determine what’s best for your business on a one-on-one basis as well. Simply schedule a virtual meeting with us online.
How The Fulfillment Lab’s Global Fulfillment Software Can Help Your Ecommerce Business
Warehouse management systems, or a WMS company, can do a lot for a business in terms of efficiency and accuracy, and many warehouses end up reaping rewards that they might have never seen coming. But, it can be difficult to choose which is right for your company and some can be quite complex.
If you’re looking to unload fulfillment duties to a fulfillment center, then you won’t need a WMS at all. When you store and ship your product through The Fulfillment Lab, you’ll have access to our proprietary Global Fulfillment Software (GFS™). Unlike other WMS platforms, our technology allows you to see exactly what’s going on in our distribution centers where your products are stored, even if it’s in one of our facilities across the globe!
Not only does GFS provide the functionality of other high-end WMS software, but it also takes data from the front end of the sales funnel to gain more data on end-consumer purchases. It’s all done to help you grow your business and your knowledge of your customers.