In 2019, 85% of warehouse owners said that they had adopted a digital management system in their inventories. This shows that the industry is becoming increasingly more automated, leaving behind companies who neglect digital transformation. Despite the increasing adoption of warehouse systems, there is no definite answer for what the warehouse system is the best.
Obviously, there can’t be one - all warehouses have different needs and require a tailored approach. However, there are factors that all warehouse owners can take into account to make the right choice.
The choice of the warehouse system relies on analysing the specifics of management, distribution and location. The team needs to evaluate their organisational strategies and choose the system that would allow digitizing most of them.
The main aim of selecting a warehouse system is to choose software that fits your current workflow. If you need to redesign most of internal processes just to make them suit the functionality, such a system might not be the right choice. So, consider the relationship between your current practices and platform’s features.
Maximum features
The warehouse system’s functionality depends on its purpose and cost. Some tools are appreciated for their simplicity, whereas others appeal to business owners by offering multiple features.
However, there are certain operations that are essential to any warehouse.
Handling outbound and inbound processes
A warehouse system should handle receiving, shipping, scheduling, packing, documenting, and sorting of goods. All processes should be managed in both ways - from the moment of receiving to the end delivery.
Order fulfillment
A warehouse management system (WMS) should predict when, how, and where products will be delivered. The system should support regulation protocols, comply with governmental requirements, and offer automation. Modern systems are equipped with AI, the Internet of Things, networking systems, and re-ordering algorithms.
Documentation and tracking
A warehouse management system should provide the entire team with real-time updates on product shipment, delivery, management. KPI analysis, tax management, business intelligence assistance, real-time support, and multi-currency integrations are must-have for efficient warehouse management.
Labour management
Warehouses employ big teams, which is why one of the system's responsibilities must be team management. This includes hours tracking, defining timestamps, forecasting workflows, and managing KPIs.
Obviously, a warehouse system can have a lot more functionality - these are just the essentials. However, this list already gives you the idea of how many things a WMS should be responsible for.
Integration functionality
All best warehouse systems don’t include all available features in the core functionality. That would result in the overloaded interface, redundant operations, and unnecessary complexity. Instead, they prefer packing some features as integrations - and it’s up to teams to choose whether to adopt those.
What do warehouse system integrations normally include? Let’s take a look.
Integrations with CRM and ERPs
A warehouse management system doesn’t work merely on its own. It should support real-time incoming data from customer relationship software and enterprise resource planning systems. This way, the team will be always aware of bottlenecks and should be able to reduce them right away.
Accounting software support
A lot of warehouse management systems are compatible with financial management tools, like QuickBooks and others. The team is able to track the financial flows and predict risks.
Cloud support
Many warehouse systems have integration for Cloud support: the team can backup all the most important data of the decentralised service - in case something happens to local hardware.
WMS integrations assure software’s high operational capacities and compatibility. Most importantly, you don’t end up paying for unnecessary features - you invest only in functionality that you plan to implement.
Ease of use
As you already understood, warehouse systems tend to be complicated. Even the simplest platforms have a long learning curve. Often, it’s a huge obstacle to automation and timely adoption of the system.
This is why ease of use should be a major factor for companies that consider a warehouse management system. There are several features that help teams get used to the software and explore its full potential.
Visual dashboards
A warehouse software should provide an intuitive way of generating, sharing, and editing visual reports on warehousing activity.
AI usage
When software offers a lot of automation options, you only need to set up the process once - and the tool will repeat the operation without the team's involvement.
Clear help centre
A warehouse software should have an explanation and guidance embedded in its functionality - so you don’t have to contact support every time.
It’s important that your warehouse system provider doesn’t create a vendor lock-in for you. This is why sometimes it’s better to consider developing a custom warehouse management system - you will be able to make changes independently and have your WMS grow together with you.
Important warehouse metrics and KPIs
A warehouse management system should provide your team with information on your performance, efficiency, and customer satisfaction. There are dozens of warehousing metrics, and all of them are important for certain aspects, but we collected the essential ones below.
1. Inventory turnover
The turnover rate shows the frequency of stock replenishment. The higher the frequency, the better your warehouse works. A system should measure the turnover and help you achieve higher turnover.
2. Inventory accuracy
This metric shows if you fill and execute your orders properly. You can know how many mistakes the team made in a day, week, or month. It’s also, arguably, the most important metric for manufacturing operations.
3. Backorder rates
If a warehouse team is overwhelmed with the number of orders, the system will execute the backorders to deal with the overload.The higher the rate of backorders, the more your inventory needs optimization. Detecting high backorder rates early on helps you avoid serious underperforming.
4. Time at the dock per truck
If your trucks spend too much time at the dock, it’s likely that your team works too slowly on preparing vehicles for shipping. It’s also possible that you are not getting enough orders, in which case you can’t maximise the capacity of your warehouse.
5. Cost per item shipped
By calculating the operation costs of your inventory, you can make changes to your pricing, optimize the process, and reduce investments to unprofitable areas. If the cost per shipment is too high, it’s likely you need to undergo an organizational transformation.
Warehouse management systems should provide insights on these and many other KPIs. This way, a team knows exactly the quality of their performance and can continuously optimize it.
Improved customer service
The adoption of a warehouse management system has direct consequences for the quality of customer service. End-clients are well aware of their order shipment progress, receive timely support, and get faster order fulfillment. When internal processes work like a clock, the satisfaction naturally grows.
The warehouse system can contribute to improving customer service by offering the following functionality:
Сommunication system
A WMS connects employees to management, making sure they transparently cooperate and understand their end goals.
Integration with wearable devices
Team members can wear GPS devices on their wrists to track shipment location and request prompt help, if necessary. As a result, orders are executed faster and better.
Protocol surveillance
A WMS system can immediately detect violation of the protocol, therefore, protecting customer rights and assuring the best service.
A warehouse system is a link between all employees in the warehouse. It supplies everybody with necessary information anytime. This way, team members can focus on providing the best service rather than spending time on micromanagement.
Conclusion
Business owners should choose a warehouse management system in regard to their specific management needs and customer interests. Often, the best choice is to develop a custom system rather than to adopt a ready-made one - this is also a scenario that the team should be ready to consider.
If you understand the specifics of your organisation's processes before committing to a solution, you’ll be able to make the right choice.
