With the current growth in the e-commerce sector, the need for efficiency has become critical to the survival of businesses within the supply chain. Whether you’re a small start-up or a rapidly growing enterprise, having the right software in place will help your business optimize its operations and increase profitability.
The enhanced visibility and structure that efficient systems provide enables businesses to identify problem areas and to work on improving their processes.
What is a warehouse management system?
A warehouse management system (WMS) is software that empowers businesses to optimize their warehouse operations. It offers a structured approach to the management of your warehouse functions.
- WMS systems facilitate the movement of stock, from receiving to shelving, picking, and dispatching.
- A WMS system gives you visibility into the supply chain, tracking orders as they move from suppliers to the end user.
- It warns you when stock levels are running low and produces a suggested order list that you can accept or modify.
- WMS software facilitates the use of barcode scanners that scan product and shelving locations.
This all saves time and minimizes errors.
Why is choosing the right WMS important?
Not all warehouses are the same. A company that deals in heavy steel machinery will have different needs than those of an e-commerce business that delivers multiple small orders throughout the day.
Many businesses have constraints in terms of warehouse space. Some stock items have specific storage and handling requirements. Perishables need temperature control and need to be moved quickly. Sensitive electronic equipment needs to be handled with care. In a fast-paced industry such as electronics sales, stock can become redundant very quickly, and redundancy costs money.
This is why choosing the right WMS software is important. Your WMS system should promote smooth workflows within the warehouse, helping you to identify and manage the correct packing and handling methods for your specific stock. With the right software, you can manage the movement of stock without causing bottlenecks in the aisles, conduct quick and effective stock counts, and, most importantly, know at any given time what your stockholding is.
UNDERSTANDING YOUR WAREHOUSE NEEDS
Before jumping in and assessing the various WMS products on offer, you need a thorough understanding of every aspect of your warehousing operation. Make copious notes of everything that comes up.
Assessing your current operations
Do an in-depth investigation of the challenges and needs in the warehouse environment. This entails meetings with managers and supervisors to identify their issues and needs. Conduct brainstorming sessions to come up with suggestions for improvements.
Identifying needs
Draw up a list of essential functions that you would like your WMS software to handle. These can include:
- Automation of picking and packing.
- Reporting and forecasting.
- Prioritization of stock picking.
- Optimization of picking routes.
- Accuracy.
- Stock keeping accuracy.
- Regular cycle counts.
Identify pain points and areas for improvement
Determine whether there are bottlenecks in the process, and how they can be alleviated. Establis whether the staff is overworked or whether there is a lot of idle time between periods of activity.
Setting goals for your WMS implementation
Determine the key requirements for your ideal warehouse management system. Prioritize your list with specific goals in mind. These should include:
- Cost savings.
- Streamlining processes.
- Management of inventory levels.
- Storage and retrieval methodology.
- Visibility: reporting and analysis.
- Future growth of the company.
- Integration with existing financial, inventory, and logistics systems.
KEY FEATURES TO LOOK FOR IN A WMS
Inventory Management
Real-time tracking
Tracking is typically done by means of barcodes. Each barcode is linked to a unique stock keeping unit (SKU). Additional information, such as serial numbers and shelving locations, is also tracked with the use of scanners.
Real-time inventory tracking enables managers to extract figures at any given time. It minimizes the risk of stock shortages and facilitates accurate replenishment methods.
When tracking stock in real time, you can also provide customers with realistic delivery times.
Barcode integration
Barcoding is the universal method of tracking items. Barcodes are linked to the product SKU, or product number, a unique identifier containing information such as description, dimensions, color, and other relevant information.
Barcode scanners are also used to track the location of stock in the warehouse. This means that shelf locations and bins also need barcode labels. When a product is placed on a shelf, the location label is scanned, and the system is updated with the exact location of the product.
To implement barcode tracking in your warehouse, you will need to invest in barcode scanners and labels. There is a whole range of scanners to choose from and you will need to assess your needs quite thoroughly before investing in expensive barcode equipment.
Stationery scanners can be located at specific points in your warehouse, while mobile scanners enable staff to move around. The various types of scanners include laser, CCD, and image scanners, and the more sophisticated 2D area imagers. There are pen and barcode wands as well.
Once you have done your initial needs analysis in terms of warehouse layout and scanning needs, it would pay to get expert advice on the different types of technology available.
There are also many labeling options on the market. You may want to use colored labels to identify different product categories, upright labels for shelving uprights, or special labels for refrigerated storage units.
Cycle counting support
Cycle counting is the ability to count sections of your inventory without having to count the entire stockholding.
In large warehouse environments, putting a hold on the movement of stock throughout the warehouse is just not practical. It holds up business and can be very costly. Having said that, you are required to do at least one full stocktake for auditing purposes. This usually coincides with your financial year end cutoff.
Cycle counting is done on sections of stock, daily, weekly, or monthly, depending on your resources and the type of business you run.
This is where stock categorization becomes necessary. It makes sense to count the fast-moving or high-value items more frequently and to schedule the medium- to low-end products less frequently. By categorizing your stock, you can automate the frequency of cycle counts per category.
Some WMS systems provide for more than one method of categorization of stock items, such as an A, B, or C classification in terms of value or movement frequency. This classification can also be used for cycle counts.
With careful planning and efficient shelving or binning methods, stock should be relatively easy to scan and count.
Regular cycle counts ensure accurate stock figures and help identify problems such as incorrect binning and theft.
Order fulfillment optimization
Optimization of your order fulfilment process is important in terms of customer satisfaction and their likelihood of placing further orders with you.
Pick and pack process management
A firm order for stock will generate a picking notification in the warehouse. This can be in the form of a printed picking slip or it can appear on a monitor as an instruction to a picker. The person who receives the instruction will move to the location in the warehouse, scan the barcode, and remove the stock item. With scanning, the inventory system is updated in real time so that the stock is no longer available.
The process of moving to the shelf or bin should be as seamless as possible. Efficient planning ensures that people and forklift equipment move around without causing jams in the aisles. In the planning phase of your system, consider WMS software that accommodates staff identification and their allocation to specific areas.
In larger warehouses, conveyor belts and specialized packaging machinery can speed up the packing process. And most importantly, correct labeling and documentation will eliminate packing and delivery errors.
Order prioritization
Delivery deadlines may be set when the order is placed. Prioritization can also be predetermined based on customer preferences or the nature and value of products.
Route optimization for pickers
Pickers use mobile devices to follow the correct routes as determined by the system.
Optimization of picking routes requires the careful planning of your warehouse layout.
- Group similar items together.
- Keep fast-moving items near the dispatch area.
- Design routes manually taking the warehouse locations and congestion points into account.
WMS systems plan picking paths based on the shortest route to the stock location, or the nearest available picker. Choose your preferred method according to what works best for you. Monitor the routes regularly and make changes if necessary to avoid congestion in the aisles.
Some WMS systems use artificial intelligence (AI) algorithms to improve routes over time.
Reporting and analytics
Performance metrics
Performance metrics are synonymous with SLAs—the service level agreements that you make with your customers. They are thus essential if you wish to retain customers and remain competitive in business.
WMS systems store large volumes of data that can be used to analyze all areas of your warehouse operation. When choosing WMS software, the quality of data and reporting features that the system provides is important, as this will help you to gauge the efficiency of your operation and make improvements as you grow.
Specific areas of focus include:
- Order lead times
- Backorder rates
- Order picking accuracy
- Inventory accuracy
Inventory forecasting
Inventory forecasting is based on historical movements of stock items and future sales predictions. Collaboration with marketing and sales managers can improve the forecasting process, empowering inventory managers to predict future stock requirements and manage replenishment criteria.
Custom report generation
WMS systems provide an array of user-friendly reports and inquiries. Dashboard software that offers high visibility of trends and usage in real-time is ideal for the busy warehouse manager. Consider WMS options that enable you to create more specialized reports that are relevant to your business.
Integration capabilities
Integration between your WMS system and other systems eliminates the need for duplicate capture of data, thus minimizing errors. It does away with some of the routine work and frees staff up for other, more productive tasks.
E-commerce platform integration
If you are in the e-commerce space, integration with your e-commerce platform will ensure that your customers have real-time visibility of stock availability and estimated delivery times. Any pricing and product adjustments can be done on the WMS system and automatically updated on the e-commerce platform, saving you time and resources. As items are sold on the platform, your stock levels in the WMS will be adjusted in real-time.
If you’re dealing with some of the top-rated e-commerce sites such as Shopify, WooCommerce, Amazon, and others, find out about integration with their systems. Integration with these platforms should enable real-time stock updates, and delivery ETAs.
Shipping carrier integration
Carrier integration is the interface between warehouse management systems and their chosen logistics method. This may be the organization’s in-house logistics operation, or an independent transport company known as third party logistics (3PL).
If you have your own in-house logistics operation, you may already be using a logistics software solution that handles delivery routing and vehicle tracking. If you choose to outsource your deliveries, various 3PL companies will allow you to integrate with their software solutions so that you can track your deliveries once they have left your premises. They may also allow customers access to delivery information. Investigate the possibility of integration between your chosen WMS system and 3PL software.
Be sure to check the documentation requirements if you ship stock across borders.
ERP system compatibility
Enterprise Resource Planning (ERP) systems are the hub of large organizations as they handle the financial, sales, purchasing, and inventory transactions. Real-time integration between your ERP system and WMS system saves time and effort when it comes to processing customer and stock transactions and updating financial records.
The sharing of information between these systems also facilitates advanced reporting and forecasting functions. Most WMS systems offer integration with ERP and customer relationship management (CRM) systems.
It is important to confirm the integration details in the investigation phase, particularly if your ERP system is an in-house system that has been specifically developed for your organization.
The Pick and Pack process: How a WMS can help
Once a customer order has been received, stock is allocated to the order in the WMS system so that it can’t be taken by anyone else. The warehouse receives a notification to pick the stock. Picking the stock removes it from the system or flags it as unavailable. Once packed and delivered, it is removed from stock altogether.
WMS features that streamline picking
There are various picking strategies that you can adopt, depending on product types, warehouse layout, and time constraints. You may also adopt different picking strategies in separate parts of your warehouse.
Zone picking
Products can be zoned according to criteria such as fast- or slow-moving items, high-value items, or different product categories. In a zone-picking setup, each picker is assigned to a specific zone. This means that one customer order can be spread across different zones, and the picked items need to be taken to a central point where they are packaged by someone else into a single parcel per order.
Alternatively, an order tote can be passed from one zone to another, where the relevant picker for that zone will add the picked items to the tote bin until everything for that order has been picked. These methods are known as simultaneous picking and sequential picking, respectively.
Batch picking
This method is effective for companies that have a lot of similar orders and products. Facilitated by the WMS, orders and locations are analyzed, and a single batch picking sequence is established. This combines batches of orders with similar products in one
area of the warehouse into a single picking sequence. This method minimizes traffic on the warehouse floor and reduces walking time.
Wave picking
Wave picking involves sending teams out to pick based on conditions such as scheduled times, carrier availability, specific warehouse zones, or like items. This method reduces pickers’ idle times. It also relies on the WMS system doing an analysis of specific criteria and warehouse zones.
Packing optimization tools
Cartonization
There are a number of factors to be taken into account when packing items. These include the number of individual items, fragility, dimensions, and weight. Once boxed, shipment dunning needs to be inserted between packages to stop them from shifting and damaging the items. Sohpisticated WMS systems use technology to assess the needs per package and optimize the space requirements in the shipping container or truck.
Packing instructions
Some customers have preferred packing requirements that are usually noted on the sales order or their customer profile. Manufacturers and suppliers may also have specific packaging instructions. Care needs to be taken to ensure that these instructions are conveyed to the people packing the stock.
Considerations for choosing a WMS
Scalability
Systems come at a high cost in terms of financial outlay and the effort that it takes to implement a new system and train the users.
It is therefore important to plan ahead so that you don’t outgrow the system in five years or sooner. When assessing the various WMS options, check the capacity for future growth. Ascertain your current storage needs and whether the storage capacity can be increased in the future. Can the database be changed to accommodate extra stock categories or complex pricing structures? Would you be able to add a module to handle bills of material for combining products into blister packs, for example? Would you be able to introduce serial-tracked products if the need arose?
User-friendliness
This is an important consideration. Unhappy users mean reduced productivity, and in time, your business will suffer.
A system that takes more than two weeks to master will cause a backlog in terms of productivity and the flow of information to stakeholders.
Additional features such as dashboards motivate staff to achieve better figures and reach daily goals. Automating some of the repetitive, boring work frees staff up to focus on tasks that are more challenging.
Mobile capabilities
Mobile equipment can be costly, but well worth the investment. Intelligent scanners with mini screens enable pickers to scan and pick a product, update the order in real time, and then continue to the next item on the picking list. Forklifts can also be fitted with mobile devices that automatically guide them to the correct location, retrieve the stock, and update the system. This requires the installation of API technology and specialized equipment, but in the long run, it is worth the outlay.
Cloud-based vs. on-premise solutions
Cloud-based WMS systems offer a huge advantage to clients who are looking for a secure option for their data, and someone to maintain and support their chosen WMS software. Features provided by cloud-based software include:
- Software design, implementation, and updates.
- Database facilities and the management thereof.
- Specialized reporting and analytics.
By buying into a cloud-based solution, you save yourself the expense of having a dedicated IT team on site.
In addition, when it comes to downtime, cloud solutions are more likely to have a quick recovery and less likely to lose data.
Customer support and training
A user-friendly system is first prize, but having a friendly voice at the other end of the phone whenever you need it is just as important. It’s not only about the initial training period. There is always a need for support.
The nature of warehousing operations means that staff can’t wait around while you search for someone to fix an inventory imbalance that is preventing you from picking stock, for example.
Make sure you have a good relationship with your WMS provider, and an SLA in place that includes support when you need it.
Implementation and adoption
Planning the transition
As always, a project that has been well planned is more likely to be a success. Here are some pointers from a smooth system implementation:
- Assemble all of the information that is required. You should be able to transfer data to the new system, such as products, descriptions, quantities, and values.
- Test all integration points to make sure that they are working.
- Make sure that all documents have been tested and are working correctly.
- Do user acceptance testing (UAT) in all areas of the operation and keep records.
- Check that the reports are working and correct. Incorrect reports can have devastating effects on companies.
Staff training considerations
Provide training to all staff who are going to be affected by the new processes in some way.
Select key personnel in each area of the operation and train them thoroughly on the system so that they can assist others when needed.
Provide user manuals if possible.
Common challenges and how to overcome them
System implementations are rarely smooth sailing. No matter how thoroughly you have done the investigation, there are bound to be situations that were not anticipated. Make sure you have at least one technical person on call or on the premises during the implementation phase.
One challenge is proving to management that the figures are correct, and that the system is fully functional and meeting expectations. This can be done by running reports to validate your statements.
Conclusion
To recap, a thorough analysis of your business is essential to establishing your needs and current system shortfalls. When investigating WMS solutions, it's crucial to understand not just what you need today, but what you'll need as your business grows.
While many traditional WMS providers suggest hiring expensive consultants for selection and implementation, modern solutions are taking a different approach. Cybership, born from real 3PL operations experience, was designed specifically for growing 3PLs to be a modern and sleek replacement for legacy WMS solutions. Our team brings specialized warehouse knowledge directly to you, eliminating the need for costly external consultants.
By utilizing the full functionality of your WMS software, you'll save time and increase productivity across your warehouse operations. You'll gain better insights into your stock holding and costs, leading to improved profitability and business growth. Cybership customers typically see these improvements within weeks, not months or years.
We hope this guide has encouraged you to embark on a thorough WMS investigation and ultimately help you make an informed decision. If you're ready to explore a modern WMS solution built specifically for growing 3PLs, we invite you to schedule a demo with Cybership. Let us show you how we can transform your warehouse operations in as little as one week.
