Warehouse management systems (WMS) and their role in resilient supply chains

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Warehouse management system on a tablet in a warehouse WMS and supply chain management

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Since the effects of the Coronavirus pandemic hit businesses across the globe, supply chain digitalization has moved to the top of many boardroom agendas. As companies look to build resilient supply chains, they are turning to technology to mitigate the impact of future disruption.

Many companies have invested in digital business systems, such as modern warehouse management systems (WMS), enterprise resource planning (ERP) systems, and artificial intelligence. In this post, we’re going to focus on WMS and how they can help improve supply chain resilience.

Warehouse management systems

Warehouse management systems (WMS) support warehouse operations and distribution. They help oversee the receiving and storing of stock items, inventory management, stock counts, order allocation, picking, packing, scanning, shipping and resource management.

As warehouse management systems store all information centrally, they can immediately check if items are in stock to complete an order and send it through a workflow for picking. This removes the need for warehouse operatives to check inventory manually before fulfilling the order.

Warehouse management systems can recommend the most efficient pick paths. As they know where all stock items are stored, they can alert pickers immediately if they choose the wrong item. This can make fulfilling orders quicker and easier with fewer errors.

A warehouse management system can also help businesses understand their best and worst-selling items. Monitoring stock turns can help with warehouse layout. For example, placing best-selling items closer to the packing area and slower-selling items further away.

Types of WMS

There are three types of WMS:

  • Standalone
  • Supply chain execution software modules
  • Integrated ERP

Standalone WMS

Standalone WMS do what the name suggests – they focus solely on warehouse management, such as picking, cycle counting and tracking where each item is in the warehouse. The name is confusing because although they are called ‘standalone systems’, they can usually integrate with other systems, such as inventory management or accounting software.

As standalone WMS have limited functionality outside warehouse management, businesses need to get information from and enter data into other systems. This makes them less efficient than integrated solutions, especially as they cannot provide real-time data.

While they seem the most cost-effective option, as businesses need to purchase multiple systems, they can cost more.

Supply chain execution software modules

Supply chain execution modules are add-on WMS or applications that integrate with existing ERPs or business software.

The modules can come from different software providers so businesses can effectively build a tailored WMS. The integration capabilities should enable a business to access all data from the central ERP, reducing the need to log into several different systems.

These can benefit businesses with limited budgets, as they can buy the essential modules they need to meet immediate business priorities. For example, if order management is causing problems, the business could buy specific order management software.

Integrated WMS

An integrated WMS is where a business uses one system for all warehouse management applications. This removes the need for different connections and streamlines workflows to improve efficiency.

Using an integrated WMS allows warehouse operations, inventory management, order processing, returns processing, accounting, human resources, and procurement to access the same accurate and real-time data.

Integrated WMS might seem more expensive than standalone or modular systems, but they are more cost-effective in the long run. However, as integrated systems cover many areas, you might find functionality lacking for some departments.

How can WMS improve supply chain resilience?

A resilient supply chain has systems and processes that manage the day-to-day risk of disruption, which we discuss in more detail in our whitepaper. Getting the right WMS system can provide flexibility to adapt plans and goals to respond to changes in the marketplace. This flexibility also allows businesses to absorb the additional stress and recover quickly, reducing the negative impact.

When a WMS can provide real-time data, a business can use this as part of its supply chain planning to highlight issues. Identifying these issues earlier can lead to faster and often more significant recovery.

By engaging with a WMS operating with a modern ERP system that can process big data, a business can use these advanced analytics and real-time to forecast and anticipate disruptions – potentially avoiding them altogether.

Inventory and supply chain management teams can use these real-time insights to increase stock visibility and streamline warehouse processes. They can also improve pick accuracy, warehouse flexibility, responsiveness, safety, security, and customer service.

You can read more about how companies can combine these systems with other warehouse technology, such as automated guided vehicles, Radio Frequency ID devices, and the internet of things, in our article.

Choosing a WMS

The right software and data can empower your team to perform more efficiently and make informed decisions. When choosing a WMS for your company, here are some questions to help you find the right one.

What are your business needs?

To know what WMS capabilities you require, you need to understand your current situation and business priorities. Consider the integrations you need and how scalable the solution should be to meet your growth targets.

What’s your budget?

Your budget will have a significant bearing on the system you choose. Understanding your business needs will help you to prioritize your spending. Consider your growth plans and see whether the system supports them or whether you’ll need to change further down the line.

Going for the right system rather than the cheapest will future-proof your business. This will allow you to maintain or improve warehouse efficiency, produce valuable data, and achieve growth plans. You’ll also avoid the stress of having to replace the system in a couple of years.

How easy is it to use?

To ensure you get the most out of your WMS, it needs to be user-friendly to get the best information to make vital strategic decisions. It also means your staff are more likely to use the system to the business’s best advantage.

Putting in the effort now will mean you’re sufficiently equipped to deal with future supply chain challenges. It could also make you better prepared than your competitors who aren’t doing anything, meaning you could increase your market share and gain a competitive advantage.

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Kate Granger

time

4 min read

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