Any warehouse business knows that effective management is the only deciding factor between a happy and a complaining customer. It is common to hear complaints about delayed and wrong shipments, high operating costs, and items that go missing in transit or in the warehouse.
According to a survey, 85% of businesses use a warehouse management system (WMS) to increase efficiency, combat tight spaces, and have a holistic view of the inventory.
This article will explain the current challenges of warehouses and the importance, benefits, and functions of a WMS.
What Is Meant by Warehouse Management?
Warehouse management is critical for businesses that deal with physical products. It includes managing the storage, sorting, movement, and tracking of goods within the warehouse and to the distribution centers. With hundreds or thousands of products each going to a different distribution center, warehouse management is no easy task, and the business must have robust warehouse management software in its arsenal.
A modern and state-of-the-art warehouse is only as good as its operational efficiency. A warehouse that is not efficient results in poorly performing staff, high operating costs, low margins, lack of leadership, and damaged and lost goods.
Common Challenges Faced by Warehouses
Warehouses often face challenges that affect the speed, productivity, and efficiency of one unit or entire supply chain. By the time the business discovers the problem, it has already lost significant time and money. Here is a list of common warehouse challenges –
Multiple redundant operations on each item often comprise workflows in a warehouse. For example, in large warehouses, multiple people pick items from different areas to fulfill a single order. This increases the chances of errors like more than one person picking the same item.
Shortage of storage in a warehouse due to inefficient use of space is a common problem in warehouses. More time is wasted fetching items, causing higher costs due to delay. An optimal warehouse layout maximizes the floor and vertical space.
Bad inventory management
Badly managed inventory in a warehouse leads to multiple problems, such as –
- Not finding the item at its location and searching elsewhere.
- Accepting an order but realizing you do not have enough stock to fulfill it.
- Rejecting an order because the item is out of stock but realizing it was in stock.
- Difficulty finding the right place to put the fresh stock from the supplier.
While many warehouses manage their inventory manually, others are barely able to keep or manage records of the items in or out of stock. The reason could be outdated software or the complete absence of one.
Not prepared to scale up during the high season
All products do not have a uniform demand around the year. Certain products’ demand skyrockets during the festive season and most warehouses are under-prepared to handle it. They either do not have enough items in stock or do not know where to find them.
Poor order management
Order management is perhaps the only process that is most prone to errors. It comprises receiving the order, accepting it, picking, packaging, and shipping the right product to the right customer in time. It also involves accepting and processing or rejecting refunds while detecting different kinds of fraud. One mistake can make the whole chain collapse.
High labor spending
Labor handles multiple tasks in a warehouse, including cleaning, handling, sorting, forklift operation, receiving and logging items, packaging, shipping, stocking, etc. Manual labor accounts for 50-70% of the overall cost of running the warehouse.
No damage control measures
It may be difficult to avoid damage to items entirely, but you can take measures to reduce it as much as possible. Without regular inspection of racks, shelves, forklifts, guard rails, and lockout systems, the items will be prone to greater damage.
Role of Warehouse Management Software (WMS) in Managing Warehouse Challenges
Warehouse management software (WMS) provides real-time visibility of the location and quantity of all inventory, no matter how big the stock is. With WMS technology, you can use barcode scanning, artificial intelligence, and even drones to track the items, predict demand, and fetch them faster.
In many companies, the WMS integrates with corporate ERP to manage all the activities and exchange information with other departments, such as manufacturing and sales. Streamline overall operations and increase the efficiency of your warehouse with a WMS.
Functions of Warehouse Management Software
A WMS simplifies the complexities of managing a warehouse and optimizes the effort for maximum efficiency at a low cost. Common functions of a WMS are –
- Leverage distributed data through automation and perform demand analysis to forecast sales.
- Create efficient day-to-day operating plans.
- Use dashboards for real-time insight into inventory quantity and location within the warehouse.
- Integrate with other systems such as ERP, accounting, and transportation management.
- Provide insights about the overall health and efficiency of the warehouse.
- Help optimize the space and manage the inventory better.
- Create SOPs for daily processes such as receiving, picking, and packaging items.
- Make the entire process customer centric.
- Establish solid workflows and controls with a holistic view of the warehouse.
- Set a system that creates predictive models and rapidly adapts to a rise or fall in demand.
How Can Supply Chain Software Help Manage Warehouse Operations?
Supply chain software helps warehouse operations by managing order fulfillment from receiving the order to shipping the items to the buyer. It plays a strategic role by facilitating inventory distribution, automation, transportation, logistics, etc.
The software can streamline operations and strengthen relations with both suppliers and customers.
How Can Businesses Use Warehouse Management Software to Streamline Their Operations?
Software for warehouse management improves the efficiency and accuracy of warehouse operations by stocking only what is in demand and replenishing when the stock is low. It reduces paperwork by digitizing inventory receipts, moving and picking tickets, packaging lists, etc.
The software may use voice-based communication technology, enabling workers to move freely around the warehouse while they interact with their peers. WMS can also integrate with modern technology such as Artificial Intelligence (AI), driverless forklifts, Warehouse Control Systems (WCS), conveyor systems, robots, Internet of Things (IoT) devices, and drones.
WMS expands traditional and manual inventory management by leveraging technology that integrates across systems and uses dashboards for a 360-degree view. Using WMS can be a game-changing strategy for warehouses to streamline inventory, lower operations costs, and be profitable in this competitive market.