Warehousing Warehouse Management Systems Warehouse

Warehousing

Warehouse Management Systems

Warehouse management system (WMS) is an important part of a company's supply chain and it controls the storage, shipping and related processes of a warehouse. The WMS provides the basis for all warehouse transactions, so a state-of-the-art WMS is critical to the proper functioning of warehouses.

Warehouses hold inventories and the logistics team controls what products should be shipped out of the warehouses and when. This is an important function of WMS because products should be readily available to customers when they need it and at the same time, the stores should not be overstocked. Besides this aspect, there are other functions of WMS and they are explained below.

Managing inventory levels

One of the primary aspects of WMS is to manage the inventory levels in such a way that customers get the products in a timely manner and there is no overstocking of any particular product. Many departments in a company as well as many companies rely on WMS to protect inventories from damage and to ship out the products as and when needed. If the products are not shipped in time, it affects the customers and other companies that are lower down in the supply chain, and so WMS is crucial for this activity. The WMS is also responsible for creating and updating inventory levels in the company's information management system so that other departments can use this information for improving their efficiency (Van Den Berg, 2007).

Handling incidents

Another important function of WMS is to handle incidents and discrepancies. The information entered in the company's management system should match the actual inventory levels on hand. If there are any discrepancies, then it is the responsibility of the WMS team to handle them. Also, the right products should be shipped to the right locations and this makes WMS labor-intensive and complex. However, a well established WMS is essential to reduce incidents and loss.

Customer Service

An effective WMS is essential to ensure a high quality customer service. Errors in deliveries can lead to empty shelves and in turn, this will result in a financial loss for the company because the product was not available for sale. Also, customers will be unhappy if they see empty shelves all the time. They will also be dissatisfied if products are not delivered within the stipulated time. To prevent these problems, a state-of-the-art WMS is necessary.

Logistics Cost

Logistical costs account for roughly 9% of a company's total sales price (Van Den Berg, 2007). Though it depends on the industry to a large extent, the costs are nevertheless significant. These costs are likely to increase with a poor WMS and this is why a top-quality WMS should be in place for every company.