“Inventory management is all about having the RIGHT PRODUCT, at the RIGHT TIME and PLACE, in the RIGHT AMOUNT, at the BEST POSSIBLE PRICE”.
The logic of selling a product hides messiness, complexities and tight deadlines of a crucial process: fulfilment, even to small businesses. When you add a warehouse full of inventory to the mix, you will need an effective organization system for your business to function correctly. A warehouse management system (WMS) can come to the rescue. That system is the backbone of your warehouse.
To run a warehouse, you need an inventory management system. To run a warehouse efficiently, you will need WMS (Warehouse Management System) software.
Fulfilment comprises a series of tasks, from order management to warehouse management. You may feel that your current system is adequate, whether it’s manual or based on some combination of order tracking and inventory management.
But the truth is, a highly efficient and streamlined fulfilment process simply isn’t possible without WMS software. Without it, you’ll be stuck at a lower level of efficiency for both time and cost. Here’s what it looks like:
Level 1: Manual
Some businesses still run fulfilment manually on printed lists in their warehouses, either because they have yet to upgrade or because they’ve only recently expanded enough to need a warehouse. While a well-organized manual process does represent a warehouse management system, it’s a pretty low-level one.
A manual WMS will cause you all sorts of headaches, including:
-Human error & associated rising costs
-Lack of transparency
-Difficulty of optimizing based on data insights
-Inability to do complex picks like wave or bulk
These factors combine to create rampant inefficiency across the board.
Human Error & Costs
Human error is incredibly common — and incredibly costly. A misprint could result in an incorrect shipment; a list distributed twice could result in a whole slew of duplicate orders sent out; theft can result in immediate losses; even simple mispicks or incorrect packaging might send orders in all the wrong directions.
The ramifications of these errors are the real problem. Inventory is an incredibly valuable asset, and when it’s sent to the wrong place, it’s a sunk cost. That’s not to mention disgruntled customers who received the wrong order or no items at all, as well as associated costs of retrieving misships or having to send out the same order again. A manual warehouse management system, even with the best oversight, can do little to prevent all of these errors.
Transparency & Data Insights
A manual system is also more challenging to optimize. Without clear data insights via a software program, you can’t make small but impactful improvements like reorganizing your inventory or ensuring that workers are using the fastest route between shelves.
Manual WMS also limit you because they don’t facilitate more complex (and more efficient) order fulfilment. For instance, you can’t run something like a wave pick to mastermind the flow of workers within the warehouse with just a pen and paper. If you’re picking orders as they come in or relying on a print-out, you can’t do bulk picks to satisfy multiple order lines, because you simply don’t have the oversight of the whole system to do that.
Level 2: Order & Inventory Management
A significant step above the muddle of manual management is software that’s adjacent to warehouse management systems. Most commonly, that means order and inventory management software.
For growing businesses, this is a great intermediary step. It ensures that your inventory is properly tracked, that orders come through automatically based on inventory availability and more. Early into warehouse management, this system will work just fine.
Here’s the catch: with this non-specialized software, you’ll end up running into many of the same problems as a manual warehouse management system. You’ll have more insight into your inventory, but still no data on your warehouse itself. You’ll have better control over orders, but still, struggle to efficiently manage complex workflows like bulk picks. You’ll also still rely on manual processes such as printing out order lists for workers.
Inventory management is pretty much a necessity to any business with physical goods — but for a company with a warehouse, it’s simply not enough. It comes down to this: if you have a warehouse, you need WMS software.
*INNO is the only official partner of DEAR in China.
This article was originally posted at Dear Systems.