CHAPTER 8.
WAREHOUSE MANAGEMENT
SYSTEM
Introduction
“Trade isn’t about goods. Trade is about information. Goods sit in the
warehouse until information moves them” (C J Cherryh)
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
1. Why does a company need a WMS?
The potential benefits of having a WMS:
. real-time stock visibility and traceability;
. improved productivity; accurate stock;
. reduction in mis-picks; automatic replenishments;
. reductions in returns;
. accurate reporting;
. improved responsiveness;
. remote data visibility;
. improved customer service;
. minimized paperwork.
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
1. Why does a company need a WMS?
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
2. Choosing a WMS
. Need to fully understand the needs of the company and the key
business requirements, not only today but some time into the future.
. Need to understand your company strategy, ensure to the specific
needs are met by selecting the solution.
. Ensure to choose the right business partner to work with to develop
the most effective solution.
. Calculate the return on investment (ROI) on the purchase and ongoing
support of the WMS.
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
[Link] process
. Convince the management team
. Warehouse manager should engage into the selection of vendor and
software
. Work and deal with the vendor carefully and in details
. Integrate the WMS with ERP system
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
4. Selecting the right WMS
. Form a project team.
. Define, record, review and improve current processes. Don’t automate
redundant or poor processes
. Create a list of key functions required of the new system.
. Incorporate any future growth plans in your specification.
. List the benefits to your company of a WMS.
. Research and approach a select number of vendors and select a small number
with experience of providing solutions for your market sector.
. Visit reference sites to look at operational effectiveness and discuss the
benefits the WMS system has brought about since implementation.
. Produce a return on investment (ROI) report
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
4. Selecting the right WMS
Consideration about the benefits of WMS:
. the potential for a WMS to give you improved stock accuracy – by
reducing errors, providing real-time information and enabling perpetual
inventory;
. the potential for increased productivity and cost savings – through
improved labour and equipment utilization, and better space utilization;
. the need for improved traceability – a WMS can give you two-way
traceability, almost as a by-product of being in place;
. improved customer and client service – through overall improved
warehouse control, improved pick and despatch accuracy.
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
4. Selecting the right WMS
Cost for WMS including:
. Licence: the software licence needed to run the system.
. Professional services: the costs for project management, training and
go-live support.
. Development costs: software development costs for requirements not
catered for in the package, including interfaces to third-party systems.
. Support cost: this is typically an annual cost based on licence costs and
often development costs;
. Hardware and infrastructure costs.
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
5. Attributes of WMS
. Ability to interface with other systems
. Modular and scalable
. Accessible
. Ease of operation
. Standard system
. Meets specific needs
. Capable of supporting warehouse best practice
. Reporting capabilities
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
6. Selecting software provider
Certain main aspects to look for one WMS partner:
. Experience.
. Longevity.
. A vendor who emphasizes the benefits of the software, not just the
features.
. A vendor can supply not only the system but also the installation,
training, maintenance and help-desk service.
. A vendor you are comfortable working with
. A partner that has reasonable modification rates
. Resources.
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
7. Prior to choose the WMS software
. Ask the vendor the previous cases provided
. Should visit the sites
. Ask the vendor about the implementation plan including: installation
timeline and resource commitment
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
8. Implementation the WMS software
. Discuss with the business a suitable time to introduce a new system.
. Agree a realistic implementation plan
. Guarantee the availability of key staff during the implementation
. Propose deadlines to achieve the system.
. Have specific milestones in place.
. Appoint super users from amongst your staff.
. Develop a training agenda for all staff
. Don’t look to modify the system until it is in place and working as
initially specified.
. Keep reviewing the timeline and act on any slippage
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
9. Software as a service
Software as a service (SaaS) WMS is an internet-based application that is
developed, hosted and maintained by a third-party software provider on secure
servers.
The vendor rents out the system to a number of different clients that can
lead to the advantages are such as:
. lower cost of entry;
. reduced start-up costs;
. instant upgrades;
. user-driven innovation;
. ability to turn on and off as required, eg to run a temporary warehouse
operation
CHAPTER 8. WAREHOUSE MANAGEMENT
SYSTEM
10. Cloud computing
WMS vendor hosts the software application and hardware
infrastructure that the customer access the WMS via a web browser and
gain the functional benefits of a new WMS without the upfront software
costs
Case study
Example: Warehouse system management