Your data-entry personnel produce one error every 300 keystrokes. With radio-frequency (RF) scanning of barcodes, that number reduces to one error every three million scans. Think about the accuracy of your inventory. Now think about your receiving department. How many keystrokes do they make a day?
System-directed picks and put-aways will reduce your forklifts travel time by as much as 50 percent. Your put-away people spend at least an hour a day searching for put-away locations. That hour will be eliminated immediately. Picking accounts for 55 percent of your warehouse labor dollars. And 50 percent of the picking process consists of traveling to and from the locations.
You can expect to receive as much as a 35-percent reduction in your operating expenses.
The cost of carrying inventory is usually about 27 percent less in an automated environment.
Inventory accuracy increases around 20 percent with a WMS system.
Shipment accuracy improves around 5 percent.
After the system is implemented, you'll have zero inventories to perform. However, anyone that says you can go live without a physical inventory count is nuts; you should even take an additional wall-to-wall physical inventory six to eight months after implementation. But, at that point, the learning curve will be over and everyone will understand the value of maintaining an accurate inventory. From that point forward, physical inventories won't be necessary.
A look at those numbers should be enough to get you off of your hands and begin to seriously investigate a WMS system, but I know many of you will continue to gather data and take it back to your manager, vice president, president, etc., only to have them again shoot down the idea of investing in a WMS system. Tell them a WMS system will also:
- Lower the total cost per unit shipped.
- Reduce the number of inventory out-of-stocks.
- Improve delivery accuracy and timeliness.
- Increase profitability per order and per customer.
- Reduce customer service cost.
- Reduce phone communication costs.
- Increase sales.
Now is the time to take a serious look at your operation. With the continued strengthening economy come more orders. With more orders comes more receiving, more inventory, more people and more inventory adjustments because of inadequately trained people, and inefficient processes ultimately means more returns and less money added to your bottom line.
I don't want you to think this is a doom-and-gloom article, but I want to make sure you get not only the good news about this technology but also the truth. Many WMS vendors want you to believe that your company will experience WMS benefits relatively quickly after going live. In reality, at best, it will take two years. Benefits can be experienced faster with a smaller system in a smaller location. Rolling out a WMS at a branch offers the opportunity to evaluate which processes need to be completely revamped and what type of training will be required to ensure success. Most importantly, it prevents any and all disruptions of customers' shipments.
Protecting your customers should be your top priority when purchasing and installing a WMS system. Today's most serious business challenge is not selecting and implementing new technologies, raising capital or hiring the right people. Today's most serious business challenge is a scarcity of customers. The key to your organization's success lies in knowing how to exploit scarcity no matter when or where it appears.
In today's environment, your customers have too many supplier options and too little money. Your customers won't continue to patronize an organization that cannot send them what they want when they want it at a competitive price. You cannot do that efficiently without a WMS system properly installed.
You already know having a lot of customers does not guarantee success when other key performance indicators suffer. You must energize your operation with the one tool that was designed to do just that: a warehouse management system.