Warehouse inventory management system is a core player when it comes to deciding a company’s fortunes.
The factors that depend on this component are so important that a company can prosper or crumble depending on how they manage their warehouse inventory.
In short, it is behind this critical software where the all important outcome of profit or loss is determined.
With such tremendous outcomes depending on this process, it is a huge relief if there is a tool or a system that can take care of all these crucial outcomes.
A powerful warehouse management system is the firm answer to this predicament!
What is Warehouse Management System?
Warehouse management system is a software that allows an organization to track, control and administer your warehouse activities. It generally includes inventory management and auditing.
The days of managing inventory manually through excel sheets and pen has given away to the rising influence of powerful warehouse management systems making inventory management easier with tremendous benefits.
Transparency, control and future planning have reached a very high level with the rise of this technology.
5 strong reasons that support the induction of a Warehouse Inventory Management System
Operating Expenses are reduced
A good warehouse management system calculates the optimal use of space and labour thereby reducing wastage of resources. There are plenty of basic and advanced systems that work around reducing costs and optimizing space and output including the FIFO and LIFO process.
Better demand forecasting
WMS software enables real-time tracking of inventory. Inventory management systems like Barcoding, RFID etc help in this regard. At any step of the process where the products are being shifted, the company is aware of how many items are entering and leaving the warehouse. This result in better demand forecast which in-turn leads to achieving a balanced just-in-time inventory.
Better labour management
The algorithms and statistics given by a WMS can track zones which need special attention. Employees can then be delegated accordingly reducing wastage of human personnel. An organized work place gives more time to employees in taking better decisions.
Improved customer service
As a result of the number of benefits being enjoyed by the company, it automatically translates into better customer service. Delivery lead times are reduced, order fulfillment improves, inaccuracies reduce etc and these are some of the reasons why customer services will improve.
Integration of ERP
Once you use a proper WMS tool, the process becomes cleaner and after a certain period, this organized sequence (or history) can be used to chart a plan that fits your business perfectly. The algorithms used previously can be used efficiently in this regard.
There are some challenges too!
Proper communication is crucial
This is where team training is important. If the members are not properly aware of how and what the team wants, planning & executing shipments will inevitably get delayed. The correct WMS tools, proper interaction and training, other tools etc are some of the steps that can be taken towards clear and proper communication that ensures everyone is on the same page.
Mishandling of goods
If stocks are not stored in the correct place, it will lead to inaccurate tracking of goods. Even while tracking, the goods could be shown in multiple locations erroneously. Incorrect receipts and purchase orders also leads to such errors. Warehouse employees can be given regular trainings so as to handle errors from not only their own departments but from other departments too. Online cloud management software and advanced warehouse management system tools can highly raise the accuracy percentage to prevent such errors but the challenge remains.
Demand fluctuations
Even with a proper WMS in place, uncertainty in demand forecasting is so high that it is a challenge to forecast demand accurately. For example, a global recession will suddenly decrease customer confidence and forecasting is harder. Using accurate information at the right time by a professional will help considerably towards reaching that correct figure.
Labour challenges
With the online world booming, there is a huge demand for warehouse jobs. The previous generations of immigrants and local minimum-paid workers in many countries have succeeded in getting their children educated and they are not interested in minimum wage jobs anymore. This creates a labour shortage in several minimum wage job sectors. A combination of a new remuneration structure and specific skill trainings could entice many to fill this gap provided the extra overhead costs can be planned carefully and eventually justified.
Efficient management
Labour management is not the only thing that poses challenges to an organization. An inefficient management will gradually result in poor morale and low productivity. In fact, management can make or break the entire process. An experienced and efficient manager will know when to push the accelerator and when to back off whilst boosting morale. Periodic trainings and building skills will improve management efficiency.
Warehouse Inventory Management System is here to stay
The probability of success is higher and the overall efficiency is greatly increased when a proper WMS is in place. The sooner you implement this unavoidable system, the sooner you will reap the rewards.
Businesses are increasingly faced with challenges in supply chain and government regulations. At the same time, they are expected to maintain high level customer service and remain competitive in the market.
A warehouse management system is your tool that enables you to do all of these (staying competitive, compliant and maintaining excellent customer relations). Simply put, a WMS does this by real-time tracking of data, better business intelligence and suggesting organized solutions.