This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
In the 21st century, the supply chain, to succeed, needs to be efficient and effective. A Warehouse Management System (WMS), can do both of these and is used to fundamentally keep track of the movement and storage of goods within a warehouse. A warehouse's four main functions are to receive, store, pick and ship products, a WMS can improve in all these sections, WMS can be more efficient, by increasing productivity, warehouse layout and space utilisation, reducing stock levels, improving inventory accuracy and visibility, a by-product of all these would result in better customer satisfaction and a sense of security for the warehouse. All these benefits can be fruitful but they need to avoid some common mistakes, that can include: poor planning and inadequate training. Implementing a successful WMS is key to a successful warehouse. What are the signals that a warehouse needs a WMS and why would a warehouse buy one? In the coming paragraphs I will be talking about some of these points in greater detail.
The four main features of warehouse are receive, store, pick and ship products. Each of these features is benefited by a WMS. Once an order has been placed by the warehouse to the manufacturer or supplier, the WMS will know that stock has been ordered and it will document the stock-keeping unit (SKU) being ordered into the database. Next the goods will arrive to the warehouse, the consignment is compared to the order, and the bill of lading is compared to with the notification. Then the notification is sent to the WMS, and the stock is added to the inventory of the warehouse. Once the goods are in the warehouse they need to be stored, the WMS will tell the staff where to store the goods, so they can be easily found for retrieval. Once an order for the stock has been placed the WMS will tell the picker what is the most efficient way of retrieving the goods, it will show how to minimise changing aisles, and the quickest routes. Finally after the order has been picked, the shipping department is to load the goods into transport means. Once the goods are on the transport, the WMS will calculate what the customers have ordered and deduct that amount from the inventory, this helps staff and customers with what the warehouse has on hand at anytime.
One of the main benefits of WMS is the increase in labour productivity by more efficient use of time, WMS can forecast inbound and outbound stock, can schedule assignments for employees, WMS via handheld terminals can inform employees where to store certain items and, thus cutting out the time finding stock when the product is needed. An increase in labour productivity is a substantial benefit for the e-supply chain, as this will usually result in reduced labour costs, and these savings will be pasted onto the customers, making the warehouse more competitive.
Some of WMS's other benefits are the layout and space utilisation, WMS can maximise the use of a warehouse space by giving the user flexibility to design the layout to tailor the requirements of the operator. Bins are located in an optimal place for picking, the WMS will recommend changing lower-ranking bins with higher ranking bins, thus increasing the efficiency in the warehouse. By optimising warehouse layout and space utilisation, customers will receive a shorter lead time, better overall efficiency and accuracy of the receiving process, thus customers receive better satisfaction.
Reduced stock levels is another benefit of using WMS, WMS can forecast demand in advanced, and it can order supplies to match demand, this means that there are lower inventory holding costs, these savings will be passed on to the customers, if the goods are time sensitive, perishable, the customer will receive newer, better quality, products since the WMS will only order what is needed. Both of these benefits will be an advantage to any supply chain.
Improving inventory accuracy and visibility, is another major benefit of using WMS, the WMS can tell customers and all departments of the warehouse how much of each stock there is, this will help customers in the supply chain know how much stock they can buy from the warehouse, and when new stock will be coming in. Sales staff can inform customers with accurate figures about stock availability, warehouse staff can find items quickly, purchasing staff have entry to real-time data so they can maintain optimum stock levels and minimise stock holding costs. Being able to see and know how much stock is on hand is a benefit to the whole of the warehouse and the supply chain, as it allows staff to work more efficiently.
One key element of an efficient WMS is to feel trust and security in regard to the management system. One of the main reasons for enormous amounts of safety stock is because of the uncertainty of the warehouse managers. This uncertainty is due to the unreliable database or time-consuming search for stock. Having a reliable system saves money and time for the warehouse and any supply chain.
For the WMS to work properly, the warehouse needs to avoid some mistakes. Failure to make a contingency plan, users assume that the system works flawlessly from the beginning, but in reality that is hardly ever the case, ignoring this mistake can be a costly error, if this does happen it could stall up the entire e-supply chain.
Lack of training can also be a mistake, incompetent users are slow, are more likely to make mistakes and can cost the warehouse. WMS users should go through theoretical and practical training, by other internal users, and external personnel, before they use the system.
Implementing a successful WMS is what every vendor and warehouse wants, developing a solid project plan should be priority one, most organisations make the mistake of relying only on the WMS vendor to develop and administer the project. Most vendors usually assign their own project manager to do the implementation, but this project manager typically does not control or manage the project plan, it is the warehouse's responsibility to prepare facilities, equipment acquisition, testing and end-user testing need to be planned and tracked. The vendor does not know the details of the warehouse, the vendor's role is the installation of the software, and unless the end-user takes ownership of the planning process, many essential tasks will suffer, either they will, not completely planned, correctly staffed or properly executed. The end-user should take control of the project plan that ties software and facilities together.
Another way to implement a successful WMS is to manage communications and expectations, an implementation has to have support from all levels of the business to succeed. An implementation involves organisations to change and it can bring to mind uncertainty. Employees may worry about losing their jobs. Supervisors may oppose new ways of working. Manager may have doubts about the investment they endorsed. Communication to team members is the best way to combat negativity. Communication should start before the WMS has been implemented, and even after the WMS has gone live. Communication can be in the form of messages from the bulletin board, team meetings and should encourage open discussions.
Managing risk is another key part to a successful WMS, unknown factors and human errors make risk an issue when implementing a WMS. Most of the time risk cannot be eliminated, but it can be managed. The keys to a successful risk manage in a WMS implementation are the same as most business project, prior planning, knowledge, preparedness and communications are essential elements. Complexity is an another factor that increases the risk in a software project, complex processes involve more variables, and more variables mean more chances of failure.
Business growth factors from, an increase in existing SKU to keep up with demand, new customers or a boost in new SKUs, could be indicators that a WMS might been needed, other signals could be:
Actual inventory is substantial different to the computer entry
Demand for frequent, accurate and quick SKU inventory
Customer back orders are made due to lost inventory
Customer orders increase
Small sized orders increase
Vendor SKU deliveries and vendor numbers increase
Inventory quantity and storage positions increase
Online receiving, storage, pick, replenishment and manifest transactions
Or if your existing warehouse is stretched
Why purchase a WMS? During a recession period companies and warehouses alike are concerned about their inventory levels. Warehouses should not be hesitant on investing capital on software to optimise on how they operate. "Many freight forwarders and logistics providers are finding software solutions to increase warehouse operating efficiencies and better control over inventory levels to meet demand variability" Logisticsmagazine 2009, Warehouses can still optimise. Integrating technology into warehouse functions enables companies to operate more efficiently, provide improved storage capacity and reduce overhead and operating costs. "Most companies are finding that WMS is an invaluable tool in warehouse operations and can help position companies to better compete when consumer demand returns and inventory levels return to normal." Logisticsmagazine 2009, Warehouses can still optimise. Installing a WMS in a short time frame, while minimizing costs is possible with careful planning and with the right vendor that understands the warehouse.
A warehouse can strengthen its primary processes, receive, store, pick and ship, from a WMS. By increasing efficiency through increasing productivity, general warehouse layout, space utilisation, reduction in stock levels and improving inventory accuracy. While installing a successful WMS, warehouses must have a sound plan and properly trained staff. Finding the signals and making the commitment to buying a WMS is critical before it is too late.