Let's suppose your organization, warehouse, or supply distribution center has unleashed positive revenue growth for an extended period. The staff members have also increased, and the potential customers are happy with your services. But it is the long haul, tedious paperwork, and legacy business process that creates a roadblock in boosting the customer experience and fulfilling their expectations. You also notice that your warehouse workers are not performing well and you have to spend countless hours trying to track down missing inventory.
If any of these scenarios describe your current situation, it may be time to consider deploying a Warehouse Management Software (WMS). If you are still not convinced, consider the following:
Is Your Warehouse Costing Your Company Money?
- How much is labor costing you?Scrutinize and evaluate your existing workforce. Do you have any idea who the most competent, skilled, and quickest employees are? Can you prove it?
Employee performance metrics enable warehouse managers to-
- Know how they are performing
- Identify areas of improvement
- Understand what benchmarks and goals they can shoot for
Measuring challenges and successes promote opportunities to improve workflows, suggests better employee training, and celebrates achievements.
- Are you double-checking orders? Are you tracking errors? Mistakes cost you money. Errors reduce profits. Things like wrong items or wrong quantities that result in shipping errors can be very costly. Think about how this impacts customer service.
- How efficient are you? How well does your system show you where inventory is located? Is it granular enough and reliable? Do you walk through the warehouse to verify accuracy for yourself? If stock is not organized to maximize picking and putaway efficiencies, your business is being financially impacted. Traceability is key.
Do you control your inventory, or is it vice-versa?
- How do you rate your inventory control? Do your employees complain that they can not find items? How does your inventory perform in comparison to your competitor? Take your average cost of goods sold and divide it by your ending stock to know your annual turn rate.
- Do workers have to devote a lot more time searching and managing inventory? Are you still tracking details like expiry dates or bin movements in a spreadsheet? Misplaced or lost inventory costs dearly, increasing additional expenses.
- Are your processes designed to handle inventory as few times as possible? Because more handling usually means more labor, which does not necessarily translate to better accuracy. Multiple touches can introduce errors, and nobody wants that.
What are customers saying about you?
- Are your orders 100% accurate? Are they waiting to be shipped? In transit? Running late? Complete? Your customers want to know. A customer who does not receive notifications regarding the order status gives a poor review or low rating of your business.
- How confident are your customers in you? Is your warehouse staged to impress your customers, prospects, and vendors? What about your employees? Do you want prospective clients and suppliers to keep their trust in your business by witnessing a well-managed warehouse?
The point is if you are making mistakes and losing money – or leaving money on the table by not investing in warehouse process and operations improvements – then the time is right to consider a project like this. The journey through WMS selection is easier than you might expect. If you want to mitigate the intricate approach and simplify your WMS selection, here is a simple eight-step checklist to guide your process.
Assemble Your Team and Determine Your Timeframe
Before embarking on a WMS selection process,identify and recruit key WMS stakeholders, choose an efficient warehouse manager, and estimate your project timeline. When assembling this team, it is critical to invite an enthusiastic C-level executive to sponsor the project. As part of your team, they effectively embody the backing you have earned from the organization's management team going forward and can help advocate for the customer service benefits. It impacts the bottom-line that a WMS project is expected to achieve.
Often, warehouse managers are appointed from the operations department, IT staff members with expertise in inventory management. They need to consider input from the workforce deployed on the warehouse floor, with hands-on knowledge and understanding of how the facility physically operates day-to-day. It increases the project credibility as customers get complete support from IT, operations management, and the C-suite.
Also, you need to trust the proposed technology and application in resolving the identified challenges. The team should be highly committed to improving your warehouse operations and understanding their roles and responsibilities, such as carrying out a particular task, for example, carrying out an ABC Analysis to categorize inventory based on revenue generation.
Identify Your WMS Requirements
The next step in the journey is to identify your WMS requirements. Detailing your company's business goals is an excellent place to start. You should also ask your warehouse workers about current challenges and use their input to help identify and define warehouse inefficiencies. Errors reduce profits. Issues like wrong items or wrong quantities that result in shipping errors can be very costly. If stock is not organized to maximize picking and putaway efficiencies, the business inevitably experiences financial hiccups. And this affects the customer services as well.
On the technical side, the first step is to make a list of all systems used to determine whether an on-premises or cloud-based Warehouse Management System is the best fit for your existing infrastructure, current needs, and future goals. Further considerations in this area include integration requirements for the organization's existing systems, mobile access, and device compatibility.
You also need to understand WMS types and the significance of WMS-required training for a successful deployment. There is also a need to outline and rank the WMS requirements list, which helps set high-end customer support expectation levels that your team will provide.
Create Your Budget
So, what is an ideal budget estimate to invest in a WMS for a warehouse?
While it may pose a simple question, it does not necessarily come with a quick and easy answer. The WMS requirements that you have outlined and ranked determines the cost. So, use that list to estimate the price of a new system when deciding the budget for your project. Forecast the cost of hardware upgrades/additions, discuss any additional modules you may need, and factor in implementation costs.
When calculating the ROI for a WMS deployment, be careful not to get mired in an assumption-driven mess. Many distributors conduct ROI analysis before implementing a WMS, but, all too often, they get stuck wading through ROI calculators, models, and projections. At its most basic, you should start with an ROI plan that includes strategic growth goals and analyzes the practices to identify the areas that need improvement. By focusing on an ROI plan and the warehouse's biggest pain points, you can likely see significant returns – even in your first year of deployment.
Research and Find Reliable WMS Vendors
The first few steps above may sound daunting, but this is where you need an expert opinion to select the best WMS software solutions. Many WMS vendors have started offering their products with unique features and core benefits, considering the booming demand. But before reaching out to any software company, do some preliminary research and compile a vendor shortlist. Check all critical parameters thoroughly, such as the software review, features, pricing model, deployment option, client recommendations, and more. Consult GoodFirms exclusive list of best WMS before making a final selection.
Evaluate the Responses
Once you have identified promising candidates, it is time to connect and engage with those WMS vendors. You can start evaluating them based on their responses. Disregard untimely responses and incomplete information, confirm that each WMS vendor has a feasible solution to meet your needs, and schedule a discovery call to further discuss project requirements with those that rise to the top of your list.
Qualify the Vendor
During your initial conversation with a sales representative, establish the project's scope. This first discussion should focus on understanding your priorities and current pain points. At this point, they should have a decent grasp of your company and project requirements. Their role is to let you know if and how their company's WMS can help solve your business challenges. Be sure to ask for any case studies, use cases, references, or other materials they can share.
Some WMS vendors allow you to schedule an onsite discovery meeting. Think of this as an onsite fact-finding mission, where the sales representative observes your receiving, putaway, order fulfillment, and shipping processes firsthand. Recognizing the challenges your organization is facing is a crucial step in the engagement process – and it makes their discovery findings more meaningful. Once they have provided you with a copy of those findings, please review them carefully to ensure all your needs were identified.
You can discuss all other vital aspects, such as the budget, and conduct an ROI analysis at this juncture. The support team verifies your primary needs. If there is a change in requirements, discuss that in detail before proceeding further.
Take Advantage of the Demo
Next, invite each vendor still in contention for an onsite product demo (proof of concept). Schedule the right set of professionals to attend the live demo of the WMS product. It is a bonus if the demo addresses your specific challenges and resolves them. This shows that the vendor has taken the commitment seriously.
A proper WMS demo is hands-on and comes with props (supplied by the vendor for the occasion). Participation is key. Encourage your concerned team to take notes and ask questions to ensure they discuss specific needs, clarify functionality and benefits. Remember, your perspective is essential, and each vendor wants to hear your views and thoughts directly while presenting the demo.
Before deciding on a specific WMS and vendor, you may want to visit a customer to see the WMS in a live environment. Experiencing the solution in action will give you a feel for what you can expect. It provides your team with the opportunity to speak candidly with one of the vendor's customers to ensure they pair a customer in a similar business.
Make a Final Selection
While interacting with the vendor, you also discuss the pricing model of the warehouse management tool. The software company provides you with a detailed price quote covering the WMS vendor's software, licensing, services, software maintenance, recommended modules, hardware, and a money-back guarantee, if applicable. Once you have decided which WMS system to move forward with and have received approval internally, ensure that the software provider also shares the same objective – solving your business problem and getting massive value from the investment. Now that you have completed your WMS selection journey's "buying" phase, you are ready to schedule a project kick-off call and product training.
Wrapping up
Warehouse management and operations have undergone a transitional change in modern times with the advent of sophisticated solutions, such as warehouse management software and inventory management systems. WMS solutions intelligently optimize various activities like accurate inventory recording, mitigating the reductant process, real-time product tracking, effective communication, and many more. All these activities help to ensure a seamless decision-making process.
If you are willing to use a WMS system, there are an array of options. What’s more interesting to note is that you can even customize a few tools with much ease. You can invest in a best-of-breed warehouse management system, such as Latitude WMS, or free and open source warehouse management software such as Odoo MRP, openboxes, myWMS, Flowspace, Zoho Inventory, and various others.
Please do go through the buyer’s guide for warehouse management software to make your purchase seamless and speedier.
