How to Choose a Warehouse Management System
Managing the flow of goods through a warehouse is hard enough. With increased automation and an increasing demand for multi-channel sales across industries, it’s getting even harder. Fortunately, a good warehouse management system (WMS) can make it easy to tackle problems like product loss, slow turn-around times, and delayed shipments. Implemented correctly, the right WMS cuts warehouse expenses and increases the speed assets are stored, retrieved, and shipped to improve warehouse performances. This doesn’t just save on total costs; operational efficiency means faster deliveries and improved customer satisfaction.
So, how do you choose a warehouse management system, and how do you integrate it into your business? That depends on the size and scope of your logistics.
What Does a Warehouse Management System Do?
A WMS oversees inventory from when it enters the warehouse to when it leaves. It handles four main tasks:
- Inventory tracking
- Labor management
- Order processing
- Analytics, metrics, and reports
A good management system integrates with your production and logistics system as well as the physical aspects of your warehouse. On the software side, this lets you track products from manufacturing to delivery. This includes enterprise resource planning (ERP) and sales through e-commerce and point-of-sale systems. On the hardware side, assets are physically tracked with barcode or RFID scanning in your warehouse, as well as manual data entry.
WMS isn’t just for your own warehouses. It’s also a key component of managing third-party logistics. 3PL providers handle the storage and movement of products. While you aren’t managing day-to-day operations, you still need software to track assets, ensuring you’re supplying their warehouses with the products they need to meet customer demand.
Inventory Tracking
Simply knowing you have a product in stock isn’t enough. Warehouse spaces are massive, making it easy to lose track of inventory levels. Scanning barcodes and RFID tags lets you track product as it moves through the warehouse. This also helps track shrinkage to identify stock due for rotation — and avoid overstocking. Adding real-time data tracking also cuts down on inventory management errors. This tracking can range from noting when an item is shelved and when it is picked to tracking its entire movement path as it passes through RFID gates in the warehouse.
Labor Management
Are you getting the most from your workers? Labor tracking lets you see how people and equipment move through your warehouse, so you can identify and eliminate pain points. This includes grouping commonly ordered items together, moving popular products closer to packaging stations, and sending pickers after multiple items when they visit an area of the warehouse.
Order Management
The warehouse system helps workers get orders ready for shipment. This includes picking items, packaging them, and printing shipping labels. Scans of RFID tags and barcodes add checks to the process, ensuring the right items are shipped to the customer.
Analytics, Metrics, and Reports
Reporting systems give you an overview of your warehouse, helping you make changes that improve the quality and speed of your logistics. Some WMS solutions are designed to integrate with your customer relationship management (CRM) and ERP systems, making it easier to manage workflow across your entire business.
What’s the Difference Between WMS, WES, and WCS?
Warehouse management systems are frequently confused with warehouse control systems (WCS) and warehouse execution systems (WES.) WES coordinates material handling across the warehouse. WCS manages automated material handling equipment. All three functions can be built into one program, or they can be separate with the WMS overseeing the WCS and WES.
Types of Warehouse Management Systems
This software can be divided into three main categories, depending on how it integrates into your logistics system.
Standalone
Standalone WMS software only deals with the warehouse. This works well for small businesses but doesn’t offer integration with other management solutions to help handle the overall flow of products in your company.
Modular WMS
Some warehouse management systems are designed to pass information to other parts of your management system. There are also ERP software packages that support add-on WMS modules. The warehouse management system works the same as a standalone program, except the reporting and analytics integrate seamlessly into your ERP and CRM systems.
3PL WMS
Even if you don’t directly handle your products, you can still benefit from a management system. Third-party logistics WMS systems work with your warehousing and shipping partners. They’re built to handle multi-channel tracking, so you can have inventory control across your entire logistics system.
What Key Features Should I Look for in a Warehouse Management System?
No matter what you’re handling, there are a few features that every business should consider in order to make an informed decision on the best warehouse management system and maximize return on investment.
How does the software scale? Shifting software platforms is an expensive, lengthy undertaking. Plan ahead for possible growth and scalability, whether that means more retail channels, more warehouse space, increased automation, or new logistics partners. You might not need these services now, but choosing a system that has built-in support makes forecasting for future improvements easier.
Is it secure? Having security built into the software makes it easier to manage, especially for small businesses that don’t have a dedicated IT department. This includes features like data encryption, two-factor authentication for users, and role-based access to the system. Service providers usually strive to meet a specific cybersecurity standard, like ISO/IEC 27001.
Should you choose an on-site system or a cloud-based WMS? Cloud-based solutions have lower upfront costs and offer remote access. They’re also easy to set up and scale. Most small and medium-sized businesses go this route since implementation is handled by the provider, and it’s easier to accommodate growth. On-site systems use software on computers at your warehouse facilities. This provides greater control over information, and it’s easy to customize the system to your company’s needs. Having information on-site offers reliable access in locations with unreliable internet. Large businesses usually choose on-premises management due to the advantages of customized software.
How Do I Find a System That Fits My Company’s Needs?
There are several important factors that influence decision-making in regard to choosing a particular system. Where are you having the most issues? Do you need to target labor inefficiencies? Are you struggling with stock levels, shrinkage, or problems with inventory accuracy? Are you trying to speed up order fulfillment processes and warehouse efficiency? Find a WMS vendor that specializes in the areas of warehouse operations that your business needs to improve or streamline.
Are you managing one location or multiple warehouses? If you store and ship items in multiple locations or distribution centers, you need a solution that can manage inventory at each site to fulfill orders without clogging up space with slow-moving items.
Do you manage logistics in-house or do you work with 3PL providers? A 3PL-focused system is designed to handle multiple companies and locations and includes tools for billing and inventory for these vendors. In-house systems focus more on day-to-day management, including order fulfillment and warehouse optimization.
Do I Need to Upgrade My Warehouse to Use a New System?
In most cases, you need to make some changes to your warehouse to get the most out of your new WMS. Even if you aren’t upgrading your order-picking equipment, you still need a tracking system to gather information on the flow of assets through your warehouse.
Barcodes are easy to print and can be scanned at each step through the logistics system. Print-and-apply label applicators can connect to your management system, generate barcodes based on the information it provides, and print them on labels. RFID allows for longer distance scans, and multiple tags can be scanned at once. Some warehouses also implement scanning gates that check product movement through the facility. Any automated labeler can add RFID labels to containers. If you contract a 3PL to handle warehousing, you still need to label containers for traceability once assets enter their inventory system.
What Does it Take to Implement a New Management System?
Start by laying out the objectives of your new system. This needs to cover both current issues and future goals for your business.
Once you’ve established your specific needs for warehouse management software, you can find a vendor that offers software that fits your business. Any system can be customized, but the closer the standard product is to your goals, the easier and cheaper it is to deploy. Providers typically focus on a specific market need, whether it’s a particular business type or logistics system.
Warehouse staff need to be trained to use the new system before it’s deployed. More and more WMS providers are offering virtual classes, making it easy to train staff, especially if you have multiple warehouses. Training is usually handled by a third party that takes a top-down approach. Managers and executives are trained first, then these high-level employees train the rest of the staff.
Deployment should be phased in gradually to fix errors and get everyone up to speed without disrupting your business. This is more than flipping a switch. Hardware and software need to be installed, and assets need to be labeled to work with the new system.
Ready to Improve Your Warehouse Management?
Accurate labeling is critical for tracking your assets across your logistics system. If you’re looking for a solution that can integrate with your new management software, contact CTM Labeling Systems. We have local distributors who work with you to find a labeling solution that is compatible with your logistics software and your warehouse processes.
