Mark Connell, Senior Logistics Architect at WiseTech Global observes that warehouse operators rarely consider warehouse management systems (WMS) to improve their processes and operations.
While there are tangible gains to be made from moving to a fully integrated and automated WMS, including lower costs, higher supply chain visibility, better customer service and automated invoicing to reduce revenue leakage, many logistics companies have limited understanding of best practice because they may have taken on a warehouse operation by default, for instance to store contracted freight.
Mark Connell points out that productivity can’t be improved when warehouses run on spreadsheets; customer ERP systems are hosted within the depot; or too many store men expend too many hours looking for freight dispersed across the racks. In the absence of a WMS, much of the inventory and storage placement is recorded only in the heads of a few individuals, drastically increasing the risk profile.
Warehouses continue to be viewed as unproductive cost centres, set up only to feed the transport networks that generate money. Operators focus on job cost rather than on the impact to the bottom line of running a warehouse, which involves receiving freight, picking orders, and storing inventory.
Contract warehousing involves dealing with a broad range of client and inventory requirements, necessitating a WMS system that can meet changing demands. The right WMS is one that fits the purpose, which means the system must be suitable for the specific market segment and the targeted scale for expansion.
There are different warehouse management systems aimed at different segments of the market. The WMS should reflect the needs of the client’s inventories, supply chains, and market segments the warehouse operator wants to approach. For instance, if the client is in the electronics sector, the WMS will need to be able to track serial numbers; for food grade, it must be able to handle batch numbers; and fashion industry clients will expect the solution to recognise garment style, colour, and size. Compliance with industry requirements is another aspect that must be considered.
The ideal WMS should connect the warehouse operator and their clients to the wider supply and demand chain encompassing carriers, forwarding agents, customs brokers, transport management systems, and web tracking portals.
Warehouse management systems should not only fit the business’ present but also allow room for its future. A low cost solution is more than sufficient when the warehouse division is not making money.
When considering a WMS, compare only those features needed to improve customer service and productivity. There is no point in investing in a system packed with features that are not needed and will not be used, or solutions that will take months to implement and require an army of consultants to train when all that is needed is a system that would roll immediately.
The WMS should ideally be selected based on the dynamics of the warehouse and its clients. Appropriate training on the WMS will drive the systems to productivity and profit. Leveraging the resources and the WMS to the edge of their capabilities will help the company create market differentiation.
Contract warehousing providers should realise that rolling out a WMS is neither a threat to the staff, nor does it mean a reduction of the labour force. The WMS helps the business retain knowledgeable people, increase the number of jobs per person, and ultimately grow. There’s money to be made out of contract warehousing.