Warehouse Management Systems: A Complete Guide
Warehouse management systems help control the flow of inventory through distribution centers. Also, a WMS can manage fulfillment operations. As a result, the company’s processes gain efficiency and cost savings. These operations may include picking, put-away and labor management. How warehouses manage inventory and meet fulfillment and delivery demands is constantly-evolving.
HISTORY OF WAREHOUSE MANAGEMENT SYSTEMS
BENEFITS OF A WAREHOUSE MANAGEMENT SYSTEM (WMS)
Why Should I Use a WMS?
- Reduce or eliminate spreadsheets, “tribal knowledge”, and manual data entry
- Produce detailed reports to track costs
- Automate shipping and labeling processes to save labor time and reduce errors
- Increase worker efficiency with automated pick-lists and streamlined workflows
- Gain complete visibility to inventory stock levels and locations for improved material handling
Here are some gains you could see using a WMS:
WHAT IS A WMS?
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Is a WMS right for you? WMS VS. ERP
Let’s Talk Functionality
Many WMS products include the following features:
- Inventory Management utilizes data collection systems to control inventory movement. These can include automatic identification data capture (AIDC) bar coding. Another option is radio frequency identification (RFID). The data collection systems work together with specialized scanners and other hardware. This ensures location of goods within the four walls or in many locations.
- Directed Picking & Put-Away work management systems bring automation to task assignments. It allows workflow consolidation, reducing wasted time and effort. Workers use “task interleaving” to complete tasks in a logical sequence. Tasks may include replenishment, put-away, cycle counts and picks. Wave picking allows several pickers in zones throughout the warehouse for order fulfillment. Workers pick and pack items in those zones from an aggregated pick list.
- Product Traceability provides full product visibility. Location and status are visible at any point in the process:
- Receipt of materials
- Assembly and finished goods
- Shipping and final customer delivery
- Labor Tracking lets warehouse managers check workers’ performance. They can measure key performance indicators (KPIs) and ensure resources are effectively allocated.
- Containerization & Kitting allow serialization or “license plating”. This builds part/pallet/container relationships and mixed container tracking. Also, containerization simplifies the number of scans and transactions necessary to track goods. Furthermore, visibility is gained through receipt, movement, WIP and shipment.
- Integrated Labeling automates the labeling process . It eliminates manual tasks, simplifies workflows and decreases errors. Also, it ensures compliance to label standards and requirements: GS1, SSCC, GTIN, FDA. Some solutions let you create custom labels or even setup a portal for your suppliers. The portal allows your suppliers to print bar code labels for shipment to you. Plus, your specific label is ALREADY applied.
HOW DO WAREHOUSE MANAGEMENT SYSTEMS WORK?
If functionality is the “what” in WMS, data collection is the “how”. Tracking goods or materials through your warehouse streamlines processes and adds efficiency. This is due to a central system which receives the data for reporting and analysis.
You can achieve data collection in a warehouse through bar coding or RFID systems. Either system drives efficiency, allowing inventory tracking inquiries, automated pick lists and more.
Finally, automated data collection eliminates manual, handwritten labels and time-consuming paperwork. It does this by scanning the critical data, all from mobile computer hardware or RFID portals.
So let’s look at the first data collection option: Bar Coding. Dating back to the 1950’s, bar codes first gained widespread use in retail environments. Bar coding gained widespread use supermarket checkout systems. Today, configured bar codes can meet industry requirements such as GS1, FDA, or GTIN.
Next, RFID has been around for decades. That said, it’s been a victim of misconceptions about how RFID technology works. This led many manufacturers to expect a magical outcome, resulting in disappointment. But RFID was ahead of its time. But today the tags, middleware and antennae have advanced by leaps and bounds. This has made RFID a viable solution. As a result, RFID has now become a contender for companies looking to make a push for a connected supply chain.
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RFID: Transformative Technology
How Can I Choose a WMS?
What are my options?
- The Subscription model like to SaaS (software as a service). It is common with off-site Cloud based warehouse management packages. Payment usually occurs on a monthly basis. Cost varies by how many users or, sometimes, by how many employees your company has.
- In contrast, the license model is more traditional. It is mostly used for on-premise systems. Upfront costs for the license model may exceed those of the subscription model. But licensing does allow you to take more ownership of the software.But this means there may be more responsibility involved too. ‘Owned’ systems generally need more in the way of manual upgrades, updates and patches. Likewise, licensing may also cost more to customize. Integrations with your other logistics and supply chain systems could also increase costs.
Don’t forget the hardware!
Hardware costs are pretty straightforward. The number of units you’ll need and the type of functionality determines the price. Many hardware types are available including bar code readers, printers, or voice terminals. It may be tempting to get the specs from the software company and buy your hardware online somewhere. But it’s no use having a great WMS with shoddy hardware giving you daily headaches.
For this reason, purchasing quality hardware through the WMS provider is a good idea. You’ll want to to ensure that your hardware will work with the software solution. Plus, dealing with one vendor makes things easier. As a result, you’ll have one contact should you need more training or technical support.
How much does a Warehouse Management System cost?
Find out more about choosing a WMS with our blog article: How to Choose a Warehouse Management System
How to implement a warehouse management system
A warehouse management system provides many benefits. These may include real-time inventory visibility, reduced costs, error-proofing, productivity or efficiency gains. It’s true that costs vary from solution to solution depending on your needs. Even so, it’s important not to bargain hunt for your WMS solution.
It’s important to ask the right questions to define your needs. Then, partnering with an experienced supplier can make a WMS implementation go smoothly. Complex supply chains add to demands on warehouses. So as your company joins the “lean” operations bandwagon, keep one question in mind. Can you afford not to automate your warehouse?
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