give us a call at +1 281 218-4892

Blog

Blog

Collect tips and tricks to scale your business from SmartTurn’s experts

Why Is Warehouse Management System Important For A Business

Posted: August 09, 2019 by Ly Phan

Why Is Warehouse Management System Important For A Business

Pressured by customer demand for faster delivery, businesses are implementing new technologies and strategies to optimize their operations, with a common emphasis on enhancing the inventory management process. As inventory is one of the most important assets of a business, if managed correctly, it can drive significant savings and speed up the fulfillment process. While there are many tips and resources surrounding the best ways to improve inventory management processes, virtually all suggest warehouse management system (WMS) for its positive impact on both the internal and external efficiency of an organization. Here we’ll outline common warehouse inventory problems and how WMS software can help you overcome them.    

 

What Is Inventory Management?

In its most basic form, inventory management is all about maintaining balanced stock levels, and ensuring that inventory is in the right place, at the right time, and at the right cost.  It also involves other key factors such as pick, putaway, kitting, pack, bundling and more. Managing inventory effectively is crucial to avoid stock-outs, as such problems can permanently damage business growth and drive away customers.

 

How Companies Manage Inventory

Before implementation, it's crucial to have a clear understanding of the importance of warehouse management systems.  In the past, most companies relied on manually-based systems to record and manage inventory flow. This was an incredibly labor-intensive process that required continuous manual monitoring, placing a heavy burden on staff and financial capital. But this was not the only limit of manually managed inventory. Common pitfalls encountered included: 

Inaccurate Data 

One of the biggest disadvantages of manual inventory management is that it's extremely time-consuming and error-prone. Humans are generally more likely to make mistakes when handling and entering order data and information, causing businesses to incorrectly determine stock levels and predict customer demand, often causing inventory shortages or overstock. According to Nowsourcing, these problems account for 30% of total inventory management costs.

Lack of Real-Time Updates

In a decentralized setting, a manual inventory system often excludes many aspects of warehouse operations. It also can not update inventory data and information in a real-time manner. Therefore, businesses are more vulnerable to unexpected changes or missed updates. 

Failure to Modernize

The manual inventory system has limited growth opportunities, as it is difficult to incorporate any updates or processes. Moreover, it relies heavily on the traditional paper system, increasing the complexity of managing and updating new technology. 

Driven by the need to automate the warehouse processes and cut down costs, many companies have implemented a warehouse management system to streamline operations. The software helps enhance inventory management, improves order fulfillment times and has a positive impact on the business overall.

 

Top 3 Benefits To Adopt A Warehouse Management System

Maximize your warehouse operation with WMS software

1. Cut Down Operating Expenses

Since labor costs account for more than 60% of the total business costs, it is important for companies to find creative ways to save money. By automating the warehouse processes, a WMS helps eliminate manual data entry and administration costs while cutting down labor-intensive procedures such as physical inventory counts, picking, and packing processes. The software enables labor forecasting to determine which processes will require a higher or lower number of employees, tracking employee performance and exploring other areas for further improvements. Businesses are better able to optimize the level of labor and space needed to complete various tasks and reduce waste. 

In addition, the WMS software determines the optimal inventory flow to enable users to efficiently place pallets, shelves, and inventory in the right areas for easier access. This helps to increase the effectiveness of FIFO, the First-in First-out strategy that ensures the oldest stocks always get picked first, and other inventory strategies that focus on warehouse space optimization. Hence, businesses can maintain streamlined inventory and warehouse operations while saving money and time by encouraging efficient product flow.   

 

2. Real-time Inventory Visibility

For a business operation to be truly effective, there must be a clear picture of real-time inventory levels at every step of the process. This is one of the key features of the warehouse management system that provides current data on inventory by supporting tracking technologies such as barcoding and RFID. These practices enable an accurate record system that follows every movement during warehouse operations and shipping processes. 

easily track inventory in real-time with mobile handheld technologies such as barcoding or RFID

With an automated system, the usage of paper also greatly decreased. The software enables businesses to easily maintain and update inventory information through digital data; helping to improve the speed of processing shipments and transactions. As a result, companies can analyze customer demand and anticipate product surge during specific timelines or season. This forecast allows organizations to balance inventory levels in advance and avoid common warehouse issues such as stock-outs or overstock.  It also ensures the traceability for recall products, as well as allowing for the transparency to identify and avoid any potential mistakes. 

 

3. No upgrades required

As businesses expand and scale, the warehousing system also increases in complexity. Thus, it is critical to upgrade the system to keep up with the pace. While manual warehouse management systems have limited growth potential,  WMS software provides consistent improvements through updates and new features that can be added to the system automatically, reducing the need for in-house IT staff. 

Moreover, a WMS cloud-based solution does not require upfront investments in hardware and software, and offers 24/7support services from a team of specialists, allowing organizations to focus solely on growth.

 

Conclusion

The market is dynamic and ever-evolving, and companies should strive for agility in order to remain competitive. Driven by increasing customer demands, it is critical for organizations to adopt a suitable warehouse management system to seamlessly support growth, no matter the changing business landscape. 

Want to learn more? Stay tuned and follow the SmartTurn blog to keep up with the latest warehouse trends, news, and information.

Most Popular Blog

Most Popular Blog

Posted: August 15, 2019 by Ly Phan

Outstanding Features of SmartTurn’s Smart Inventory Management System

Outstanding Features of SmartTurn’s Smart Inventory Management System

Posted: August 09, 2019 by Ly Phan

Why Is Warehouse Management System Important For A Business

Why Is Warehouse Management System Important For A Business

Posted: August 08, 2019 by Ly Phan

How to Manage Inventory Effectively With 5 Steps Warehouses Should Follow

How to Manage Inventory Effectively With 5 Steps Warehouses Should Follow

Posted: August 01, 2019 by Ly Phan

5 Advanced Inventory Solutions To Reduce Waste And Enhance Quality

5 Advanced Inventory Solutions To Reduce Waste And Enhance Quality

Start increasing your warehouse efficiency with SmartTurn

try it free

No credit card required