Why Small Businesses need a Warehouse Management System
Implementing a simple barcode system in the warehouse will benefit all companies, no matter the size. A barcode system will increase inventory accuracy. A barcode system will allow any company to simply continue to do things as they had always done, but now adds a validation step of barcode scanning after each action.
It will typically take a little more time with this extra step, but still pays off with the increased accuracy. The drawback to a barcode system alone is that it does not address operational efficiency. Barcode systems only deal with the location of goods. It does not improve the way things are done in the warehouse nor prevent operational mistakes.
Using the warehouse module within an ERP can be combined with a barcode system. The inventory data from the barcode system can then be automatically uploaded into the ERP. The benefit of these types of systems are for the accounting and customer service departments.
It gives them the visibility they need, but it does not represent an improvement in warehouse efficiency and output. Typically, an ERP’s warehouse module has specific data entry routines that do not consider the best practices of running a warehouse. It will introduce more steps for the warehouse staff to get the job done with additional ERP screens required to complete transactions.
To achieve warehouse operational improvements, a WMS system needs to be deployed. A WMS uses best practices for running a warehouse across all routines such as receiving, slotting, put-away, storage, picking, packing, shipping, and quality control. A WMS will change how warehouse staff perform their job to maximize their time. It offers a variety of different methods to achieve improvements but it is tailored to each company’s business.
It gives warehouse management the tools to ensure everything, and everyone, is operating correctly. It has checks and balances in place to prevent errors and take corrective action. It can be tailored to deal with all the nuances of customers, suppliers, and ERPs without slowing down warehouse output or accuracy.
Companies can benefit from the WMS once they reach about 5 warehouse staff or go above 20,000 square feet of warehouse space. Implementing a WMS will typically reduce costs by 25% or increases output by 25%. If a company is too small, then the return on investment can be smaller than the cost of the new system.
Anyone looking at a WMS should understand how it will pay for itself, typically in anywhere from 1 month to 2 years. ROI can come in different ways for each company. Some examples are a decrease in stock-outs requiring less capital for inventory, a reduction in mis-ships, less staff, faster ship times, making use of seasonal staff, etc. To validate the improvements from a WMS, talk to those who already implemented the system you are considering, and they will tell you how it positively made an impact on their business.
Critical to the success of any WMS is a mandate from management to accept the changed that will come about. Many people do not embrace change, even if for the better. They can feel it is a threat to their job and intentionally sabotage any new systems. We have seem success where management is confident in their choice and ensures their staff embrace it. In the end, all parties will benefit. Warehouse staff will become better at their job, feel good about how organized their operations are and gain expertise in how a warehouse should ideally run.
About ProVision WMS
A product of Ahearn and Soper, ProVision WMS is an off the shelf software solution. It enables distribution centers and Third Party Logistics (3PL) companies to rapidly improve warehouse operations and meet the growing demands. The software was created over a decade ago based on a .Net platform. It is easy to integrate with an Enterprise Resource Planning (ERP) System or Transportation Management System (TMS). Development and improvements to the software are ongoing with new revision released to the customers regularly. The company is headquartered in Toronto, Ontario. For more information on warehouse management solutions, contact us today.