stop-warehouse-from-stealing-profit-with-warehouse-management-systemAre you spending too much on your warehouse processes? Would you like to explore new ways of increasing your bottom line? Would you like to cut warehouse costs and increase your profitability? Consider these proven techniques for small to medium sized wholesale distributors and manufacturers. These techniques include automating and re-engineering processes, infrastructure and equipment, all with an initial investment that you can afford.

The first way to approach efficient warehousing is to automate manual processes. This is also the easiest way. This method allows you to maintain your current processes and still realize significant improvements to your bottom line. Simply automating current processes with barcode readers and software, manufacturers and distributors can dramatically increase the accuracy of inventory and order shipments.

Before wireless mobile computing, warehouse personnel communicated inventory movement with paper, pencil and data entry at a stationary warehouse terminal. Instead of carrying around paper and a pencil, warehouse staff can be equipped with PDA’s to record functions performed in the warehouse. Simply “mirroring” current processes with wireless PDA devices is really about going paperless. Going paperless has many benefits to your bottom line, including:

Better data for the enterprise

  • One time data entry – Rather than handling data twice (pencil and paper, then data entry into the terminal), scanning facilitates data entry when warehouse activities are performed.
  • Efficient data entry – Scanning barcodes is much more efficient than writing data on a piece of paper. Technology can eliminate the time required for data entry, sending paper orders to the warehouse, searching for misplaced paperwork, filing, and maintaining paper documentation. This alone can result in significantly increased efficiency and cost savings both in labor and paper-related expenses.
  • Accurate data entry – Scanning barcodes eliminates data entry errors. Furthermore, every step through the warehouse can be interactively verified using barcode and RF (radio frequency) technology. This ensures a high level of accuracy in filling orders, product check‐in, putting away products into the correct locations, and accurate replenishment of pick‐bins. Increased accuracy can virtually eliminate costs associated with shipping, receiving and inventory errors.
  • Timely information and integration of warehouse data into the ERP System – When your staff captures data as they work, the system can provide real time information back to the enterprise. At a minimum, the warehouse solution requires software that allows sales/work orders, purchase orders and inventory information to flow seamlessly between the warehouse and ERP system while your workers perform their work. Electronic data transfer between the warehouse and ERP system ensures timely and accurate data for invoicing, purchase order payment and inventory tracking and management, all without manual keyboard data entry.

Optimized inventory management

  • Improved inventory accuracy ‐ Inventory carrying costs have an important effect on business viability. Inventory accuracy can reach approximately 99.9% when inventory is tracked using barcodes and RF handheld inventory functions. Scanning and validating locations and product barcodes ensures inventory accuracy.
  • Reduce your safety stock ‐ With the higher levels of inventory accuracy, a business can expect to diminish the quantities of required stock on hand and the carrying costs of that extra inventory, while at the same time maintaining adequate stock levels to fulfill orders.
  • Improve inventory counting efficiency ‐ Warehouse software should facilitate ongoing cycle counts, reconciled with financial data in real‐time. This is an enormous benefit to the warehouse because the warehouse does not need to shut down operations. Performing regular cycle counts reduces the frequency requirement of full inventory counts and the cost associated with closing down the warehouse and the additional staff needed to perform the count.

Improved warehouse efficiency

  • Eliminate searching for lost products ‐ Wireless devices can accurately direct the order fulfillment process by ensuring that pickers travel to the correct pick–bin locations. Scanning and validating locations and quantities eliminate searching for product and ensures accuracy.
  • Reduce picker walk time ‐ The typical warehouse solution sequences item picking to minimize walk time throughout the warehouse thereby reducing travel time, even if your business system does not support bin locations.
  • Monitor warehouse activity and order status in real‐time ‐ Using real‐time wireless data collection equipment and software to record and store activity records in a database, a warehouse solution can provide visibility into your companies warehouse productivity, activity and trends. This visibility can be on‐line, presented in real‐time or through reporting that looks at both current and historic data. Effective use of the data can positively affect the warehouse’s ability to forecast resource requirements, recognize and remedy productivity problems, track errors and monitor customer issues.

Improved customer service

  • Improve your service level ‐ Technology can significantly reduce you order fulfillment time. Many companies need to improve cycle time to meet customer’s growing expectations for same day, or rapid shipment.
  • Eliminate order shipment errors ‐ Reducing errors in order fulfillment and shipping not only lowers the monetary cost of errors, but keeps customer satisfaction and return business levels high. You can achieve order accuracy of 99.9%.
  • Improve your fill rate ‐ The ability to fill orders completely, thanks to an accurate, automated inventory management facility lets you keep those sales. You will not lose customers because you cannot fill their orders.
  • Provide your customers with improved visibility ‐ Keep your customers updated with real‐time information about order status. This information is always available to your customer service staff, on‐request and immediately.
  • Meet tough customer demands ‐ A customer like Wal‐Mart can be very demanding. You can use a system to facilitate compliance requirements such as adopting specific labeling, or tracking lot and serial numbers. Using a solution like a WMS (warehouse management system) can automate compliance with greater ease and cost‐efficiency.

If you’d like more information about going paperless by implementing a bar-coding system, we have developed several tools just for you:

  • Our white paper ‘A Guide to Investing in an Inventory Management System’ is a great first step. It will help you identify the areas in which you can save time and reduce costs regardless of industry size or type, as well as provide specific information on what to consider when selecting an Inventory Management System. Download yours here.
  • To find out what the Return on Investment would be by implementing a Warehouse Management bar-coding system, take our Return-On-Investment Assessment

Additionally, if you’d like to see an example of real-life efficiencies provided by a warehouse management system – click here.