A warehouse management system (WMS) is a powerful tool that companies can use to optimize warehouses and distribution centers. In addition to improving productivity and increasing accuracy, a well-designed WMS can help drive down overall costs. Therefore, in this article, we list 5 ways a WMS can help reduce costs.
Did you know that Amazon largely attributes its success to their efficient WMS? Amazon uses a very sophisticated WMS that is capable of handling huge amounts of data through multiple, automated warehouses.
Five ways a WMS can reduce costs
A Warehouse Management System (WMS) is a software application that helps companies manage warehouse operations, inventory, and hardware. The WMS provides control over the entire supply chain, including all logistics processes. Even when multiple warehouses are present.
Amazon gets this done by combining software that manages warehouses and enterprise resource planning (the ERP system). This enables them to accurately process orders quickly and provides real-time visibility into product inventories. The basis of a good WMS system? Automatic identification in the form of bar coding, RFID, and other tools. These are the five core ways in which a well-integrated WMS reduces costs within your company.
Standardization in the logistics supply chain
Standardization of manual work in warehouses is essential to achieve efficiency and cost savings. Manual processes often lead to delays, errors, and unnecessary, high costs. An effective solution to this problem is the automation of processes using a WMS, where the WMS controls the people in the warehouse.
By automating the receipt of products from suppliers, storage, order processing, and shipping, you reduce the likelihood of these errors. But automation is a tough job if you skip the standardization step. Getting started with automation leads to significantly lower costs in the long run. So if you are aiming for economies of scale, then standardizing manual work within your warehouses is the first step.
Improved inventory management
Coordinating inventory movements and managing the flow of goods are important activities within any business that deals with the storage and sale of products. When inventory is managed from a proper inventory management system, it often has a huge impact on a company’s profitability.
Without a WMS, inventory management can be a time-consuming and error-prone process. However, investing in a good WMS has several advantages for inventory management. For example, you can prevent unnecessary inventory from being left lying around, labor hours can be reduced and orders are handled more accurately.
Optimization of storage locations
We now know that you can run into a lot of problems if a good WMS is missing from your business. For example, the lack of visibility into inventory can lead to order processing delays and delivery errors. Fortunately, a WMS also provides the necessary solutions to optimize storage locations themselves.
To do this, a WMS uses barcodes and scanners, so you always have real-time visibility into the entire inventory. In addition, this smart technology can help with the efficient and safe arrangement of storage space. This leads to more storage capacity and less wasted space. The result is better throughput, clarity in warehouse management, and less frustration for warehouse workers.
More efficient order picking
More efficient order picking can provide significant cost savings for companies that rely on a necessary logistics system. Traditionally, order picking was done manually, which often led to errors in the logistics process. Getting started with the integration of an effective WMS helps streamline order picking.
The result is not only a lower chance of errors. The overall lead time in the supply chain is also reduced. This allows companies to save on labor costs, inventory management, and customer service. After all, the more efficient the order-picking process is, the higher the customer satisfaction.
Automatic reporting and analytics
Better analytics and reporting are essential for companies seeking to gain or maintain a competitive advantage. However, manually developing reports and analyzing them is time-consuming. In addition, there is once again a high probability that human warehouse staff will overlook important data.
With a link between existing systems and a WMS, you create the ability to automate the development and teasing out of reports. If the system recognizes how reports can be improved, you get real-time information about it. This, in turn, leads to better decision-making and increased efficiency. In addition, better analysis and reporting can generate cost savings by identifying inefficiencies and optimizing business processes.
Software as a service
Briefly, there are five ways a warehouse management system can bring down costs in a logistics environment:
- efficient inventory and storage;
- faster order processing;
- less excess inventory;
- better labor productivity;
- fewer errors in the logistics process.
When it comes to efficiency and reducing necessary costs, a warehouse management system is the key to success. Using advanced technologies and the cloud, you reduce costs, optimize warehouse management and gain greater supply chain visibility. You also suffer less from regular updates that can cripple warehouse processes.
Are you about to integrate “software as a service” into your business and take back control of warehouse management? Makes sense! Contact us today and find out how our dedicated team of experts can help integrate a customized WMS.