How can businesses save by implementing a WMS?
Implementing a warehouse management system can save time and money for companies large and small. It’s a mantra of the WMS industry, and you’ll keep hearing it because it’s true.
Now, each WMS vendor will have its own estimate for how much the average customer saves. The variance here can make some claims seem a little unclear or unlikely. So, give us a few minutes of your time, and we’ll show you a couple of areas where you can start saving today thanks to a WMS implementation.
Check out our WMS implementation checklist for a step-by-step guide to implementation success
1. Improved efficiency
WMS implementation nearly always includes a review of your orders and picking order. However, many modern options also include reports on picking lanes and space allocation, making suggestions for you to adjust your layout to make the most of your space. Orders are picked faster and more accurately, with each order also putting less stress on your team.
2. Greater inventory control
Out-of-stocks can cost sales. One core area for WMS ROI is the mitigation of those out-of-stock losses. Your WMS can generate reminders when levels dip or even automate the reordering process, so you never run out again.
3. Supply chain visibility
WMS generate significant amounts of data that you and your partners can use for better operations. The crux of this sharing and the visibility it brings is the electronic data interchange, or EDI. An EDI is a standardized tool that ensures the data you collect and share can be used by your partners, and the same with the data they make available.
EDIs inside a WMS can help reduce paperwork, properly track goods as they move through the supply chain, generate an auditable record of materials in transit, and can be used to create alerts to changes that could impact your receiving time.
4. Reduction in picking and shipping errors
A WMS introduces a variety of checks in the process for your picking. Not only are order slips now uniform and easier to read, but they typically require your picker to verify each item as it is added to an order. The WMS cost reduction helps you cut out lost sales, additional (return) shipping, repackaging, and warehouse labor costs.
Some errors will still occur, either on your part or a customer’s mistake. WMS savings still apply because they make it easier for you to process returns with established reverse logistics protocols, reducing the time it takes to address a customer’s concerns and get returned items back into your available stock.
5. Carrier integrations
Your WMS savings can extend to your shipping activities thanks to direct integration with carrier partners. This allows you to optimize shipments based on location cost and timeframes, improving customer service and saving you money. In the US, for example, many WMS options can integrate a dimensional weight calculator to best understand your options based on product size, weight, and shipment zone.
Look to simplify complexity
It’s best to keep these items in the proper context. Your savings will need to reach a certain threshold to be worthwhile, so it’s best to know how much an e-commerce operation spends on warehouse management system software. That understanding gives you the best context for knowing when WMS ROI is achievable.
The biggest areas of savings tend to be the most complex for a small or mid-sized warehouse. The large spreadsheets that take up an entire table, the hours your warehouse has to stop processing orders to do inventory counts, and the constant calls for customer service or to determine shipping prices.
When you simplify a long or complex problem, you increase your potential for savings both by reducing the cost it takes to complete a task and also by increasing productivity that allows you to generate more revenue each day. It’s the best context to understand your potential to save.
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