You expect a warehouse management solution (WMS) to deliver process improvements to your facility. But what might be less apparent is the WMS domino effect, or the efficiencies and cost savings an organization experiences in areas other than the warehouse or distribution center. A great WMS solution can boost employee and management morale, improve overall company revenues and help create future paths for growth – and these are just a few of the benefits that are possible. Let’s take a closer look.
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A better warehouse
Warehouse or distribution center cost savings go straight to a company’s bottom line. One of the easiest ways to achieve efficiencies is through an investment in a new or better WMS. It could be by creating shorter delivery times, lowering transportation costs or by instituting new processes that increase employee productivity…or, better yet, by achieving all of these goals.
As an example, even as our industry advances with new technologies, we continue to see warehouses using old-school techniques such as whiteboards to manage inbound and outbound logistics. A good WMS with a transportation management module can immediately streamline the process by giving managers the ability to keep an eye on time, space, people and vendors more effectively. The whiteboard can be abandoned in favor of a system that actually delivers more real-time control and creates valuable metrics that can be used to plan staffing levels, hold inbound carriers more accountable, assign equipment where it’s needed and reduce errors.
At its most basic level, a WMS can also reduce paper-based processes that directly hinder company growth. Paper-based systems inherently lead to more errors and customer frustration…and every time a warehouse manager has to resolve an error, it costs the company money. Paper just can’t compete with computerized systems that can identify operational inefficiencies, not to mention the hidden money wasted on paper-based systems materials (ink, toner, paper, storage boxes, etc.). If the company is looking to compete on picking accuracy, delivery and improved customer service, it’s time to abandon paper and toss it out with the whiteboard
When asked about his implementation of a WMS, Bill Derville, president of General Tool & Supply in Portland, OR, probably summed it up best: “Our warehouse if much more efficient, accurate and productive, bringing efficiency gains to our bottom line.”
Growing your business
Eliminating paper-based systems is just one of the ways a WMS can help grow your business. How would eliminating tribal knowledge affect your ability to manage? A good WMS can help convert tribal knowledge, or knowledge that is held by a single person, into a valuable company asset that is shared by many. It helps avoid scenarios where an informal knowledge holder is suddenly unavailable, causing processes to grind to a halt. For smaller companies, tribal knowledge many not represent a major stumbling block; for companies on a growth path, however, having the warehouse or distribution center’s key processes held solely in the brain of a long-term employee just doesn’t make economic sense
There are other key management issues that a good WMS can help address. When a more automated system is in place, management stress levels go down and efficiencies go up. Built-in employee performance metrics help managers establish better accountability levels – and enable executives to rely on statistics, not subjective opinions, when evaluating employee performance.
Midwest Equipment & Supply in Evanston, IL was able to experience labor-related cost savings through the implementation of a WMS. “We are able to do more work with fewer people and fewer mistakes,” said Jim Claybourn, inventory and operations manager. “Our ability to take POs up to 4:30 pm and get them shipped that same day has given us a competitive advantage within our industry.”
Training with ease
There is no question that, in addition to reducing labor costs through increased productivity, the proper WMS will help any organization lower training costs. Warehouse turnover can negatively impact the bottom line, so minimizing the number of new employees by keeping existing ones more engaged and freeing up the time spent on new employee training can mitigate cost impacts. The goal would be for a WMS to have enough ease-of-use functionality that a warehouse employee could be productive after a single day of training.
Additionally, having the ability to easily cross-train employees on multiple job functions gives the organization the flexibility to assign additional staff to new tasks on busier days; it also helps deliver more employee engagement in overall warehouse operations and gives management the energy to focus on great customer service.
John Shruga, warehouse manager for E&R Industrial Supply in Sterling Heights, MI, chose a WMS that offered an easy training module. “The ability to train my employees in all aspects of the WMS has given me the diversity I have been looking for,” he said.
Taking advantage of the domino effect
The bottom line is, a WMS can have a positive ripple effect over an entire organization, from human resources to the C-suite. In fact, the latest annual benchmarking study produced by the Warehousing Education and Research Council points to the fact that, to be effective, today’s warehouse facility and its performance need to be in complete alignment with corporate strategy. According to the report’s research, conducted by Georgia College & State University, the key indicators of a successful operation reach from dock-to-stock and quality to financial and perfect order picking – all components that a great WMS system positively impacts.
It’s time to make the domino effect work for your organization. Take a look at your WMS and ensure it’s working hard enough to help your business reach its overall goals, and not just streamlining your warehouse operation.