Warehouse Management Systems: Why Modern WMS Is Critical

Introduction: The Strategic Importance of WMS

The integral role of warehouse management in the overall supply chain of any organization makes optimal performance critical for companies seeking to achieve their business objectives. Warehouse Management Systems (WMS) must optimize incoming, inventory, and outgoing product movement while accounting for the physical and financial characteristics of those products. For example, a WMS used in a heavy equipment company will have an entirely different flow of logic and optimization routine than one developed for managing and optimizing the flow of electronic components. While the underlying logic processes are comparable, their interpretation and implementation are quite different.

What both of these vastly different companies share, however, is a need to be as efficient and economical as possible in managing their supply chains, with warehouse planning and optimization being critical to their ability to compete globally.

Key Drivers for State-of-the-Art WMS Adoption

What is driving the need for state-of-the-art WMS systems is the urgent need organizations share for increasing supply chain visibility and efficiency, the increased pressure to reduce supply chain and logistics costs, the need to make more profitable use of available warehouse space, and the imperative to deliver orders on time to the right customer at the right location.

Being able to respond to customers accurately and cost-effectively is being driven by the productivity gains made from the planning, installation, and use of state-of-the-art WMS platforms. The best-performing organizations use their WMS systems to create greater transaction velocity from their warehouses while simultaneously lowering logistics costs and fulfilling customer demands.

Best Practices in WMS Implementation

To accomplish this strategic objective, organizations achieving the best results from their WMS systems are completing five key tasks.

First, integrating labor management planning and reporting capabilities as part of the WMS is a critical step, as it provides insight into how improvement-driven strategies are impacting overall supply chain and distribution performance. Second, organizations that rely on slotting and warehouse layout tools to ensure the highest level of optimization possible — given operational constraints — represent an emerging best practice in WMS deployment. Third, increasing the level of material handling automation technology selectively applied to specific processes within the warehouse, and linking the warehouse to production centers, is an emerging best practice that leads to higher levels of inventory turns and transaction velocities.

Fourth, many organizations achieving best-in-class results rely on system integrators for the optimization of warehouse space and the synchronization of physical and automated warehouse systems. Fifth, the pervasive use of analytics — covering order velocity, fulfillment accuracy, cost per order fulfilled, and productivity per warehouse — is now tracked within dedicated warehouse analytics applications.

Conclusion

In summary, there are many reasons why a state-of-the-art WMS is critical in any modern warehouse. It is the balancing of customers' increasingly high expectations for responsiveness, the need to generate a higher ROI on investments in warehouse facilities, and the need to ensure the highest possible transaction levels on inventory that together drive the adoption of state-of-the-art WMS systems.

References

Aberdeen Group (2006). Best Practices in International Logistics. Aberdeen Group Research Report, January 2006. Boston, MA. Page 22.

Manufacturing Engineer (2005). The goal of synchronized demand. IEE Manufacturing Engineer Magazine. August/September 2005. Pages 32–35.