You’d probably agree that moving to a new warehouse is a stressful endeavor. So it may sound outrageous to hear that it’s also the perfect time to switch to a new warehouse management system (WMS).
Of course, you already understand the benefits of a WMS. A WMS keeps professional warehouses flowing smoothly and is an integral part of any warehouse operation.
One major challenge when implementing a WMS is the time and resources required to teach your entire team how to use it. It eats into business-as-usual activities and adds another project management plan to monitor.
Our opinion? If you’re planning to move soon, that’s an ideal time to implement a new WMS. While that may sound like a ludicrous proposition - you have enough on your plate with a big move, after all - we’d encourage you to view it as an opportunity. You’ll have the freedom to:
- Assess the needs of your growing business
- Use your clean slate to take a closer look at the evolving WMS market
- Consider new automated technology and find a WMS that integrates properly
BONUS: Before you read further, download our Warehouse Management Software Whitepaper to see how Logiwa uses real-time data to help you get up to 100% inventory accuracy and execute advanced fulfillment strategies like wave planning.
What Kind of Warehouse Management System Do I Need?
Let’s assume that your current WMS is the most basic iteration on the market. When you purchased it, your biggest concern was quickly locating items in your warehouse, so you implemented a WMS that supported that function.
Now, business is booming and you can barely keep up with demand. You have a larger labor force to manage, so things like pick pack optimization are important to you. Perhaps the increase in business is the reason you’re moving to a new warehouse in the first place.
So, if the reason for your move is to keep up with business growth, why not look for a technology solution that can also keep up?
Even so, the prospect of choosing a new WMS is still overwhelming. Where does one start? How do you ensure you get what you need without blowing the budget on bells and whistles?
Well, it’s time to do a little procurement planning.
Procurement Planning for a Warehouse Management System?
Procurement planning ensures that what you buy actually does what you want it to do. Have you ever gone to the grocery store planning to buy milk only to leave with $100 worth of groceries...and no milk? It’s a frustrating waste of time and money.
Imagine doing that when shopping for your WMS, but instead of $100 worth of groceries, you’re looking at thousands of dollars (maybe hundreds of thousands of dollars) of equipment.
It may sound like a silly example, but it’s not. It happens when warehouse managers forget to clearly identify what they’re trying to accomplish with a new purchase.
If you’re not part of a large company with a procurement department, it’s easy to simply buy from the sales rep you have a good relationship with or purchase the shiniest equipment on the market.
But, you don’t want to do that. Instead, ask yourself:
What business objective will this piece of equipment support?
A warehouse can have any number of business objectives. The trick is to focus on the most important ones so you can maximize your limited resources.
Your warehouse’s business objectives may be to:
- Increase the volume of putaway or picked goods by 25% per employee
- Lower the cost per item by 15%
- Achieve an order accuracy rate of 98%
- Lower inventory carrying costs by 20%
- Achieve an inventory accurate rate of 99%
In a perfect world, you’d be able to focus on every single objective and simultaneously improve the volume of work while keeping costs low. But, in our imperfect world time and resources are scarce, so it’s important to focus on the few key objectives that are the most impactful to your business.
Does that mean you should completely ignore every other area of your business? Absolutely not. You should continue to carefully analyze your opportunities, so that you know when it’s time to move onto another strategic business goal and so that you have the data to determine your highest priorities.
If you’re really concerned about missing the big picture, here’s a compromise. Consider choosing a business goal for each category of warehouse key performance indicators (KPIs):
- Internal KPIs: This includes KPIs like your order fill rate, delivery timeliness, inventory carrying cost, and labor costs.
- Supplier KPIs: This includes KPIs like lead times, fill rate, compliance, and customer service.
- Customer KPIs: This includes KPIs like timely payment, cost to serve, return rate, and sales volume.
When choosing a warehouse management system, you’ll focus mostly on internal KPIs. These will inform your “need-to-have” features. That said, understanding the big picture will help you have an informed conversation about your “nice-to-have” features.
For instance, let’s say you’re stuck between two vendors. During your research, you may find that Vendor A has better reviews in terms of upgrading and integrating into an ERP system, which you know may be needed down the road.
While such integration capabilities may not be necessary at this point, the fact that Vendor A’s solution can easily integrate into other systems that help with your supplier KPIs or customer KPIs will help you make an informed decision based on your overall business goals.
Once you understand your objectives and your must-haves, you can start to assess how sophisticated your new system needs to be.
Three Levels of Warehouse Management System Software
A simple approach to finding the right WMS software is to consider the level of complexity required by your warehouse activities and objectives. In other words, your requirements will determine whether you need a basic or robust WMS. At a high level, your warehouse needs will fall into one of these three categories of complexity:
Level 1 - Basic
This is probably the category you’re in right now, but it’s worth reviewing. If you have a level one warehouse system in terms of complexity, your WMS provides a basic assortment of tools to assist you with automation.
However, it doesn’t actually automate your warehouse. Your WMS receives input on SKU locations and gives them back to you when needed. Employees don’t have to look through a spreadsheet or a physical piece of paper.
Level 2 - Intermediate
An intermediate system offers warehouse management logic. It assesses where your goods are within the warehouse and determines the best path to take to pick or put away items. When you’re moving into a larger space, this capability is especially useful. The faster your workers can pick items, the more orders you can ship out to customers. Using the WMS’s logic, workers only take the necessary amount of steps.
Level 3 - Advanced
This system offers WMS logic while also being able to integrate with automated technology. For instance, if you plan on installing a conveyor belt system or using robots to bring shelves to pickers, you’ll need a WMS to orchestrate all of these moving parts.
Better Warehouse Performance = Higher Profit Margins: Logiwa syncs accurate data across your entire interface so the inventory numbers you see on your dashboard are what your employees see on their devices. Learn how Logiwa uses real-time data to help you get up to 100% inventory accuracy and 2.5x shipments.
Warehouse Management Systems with Automation Capabilities
Suppose you’re interested in bringing some automation into your new warehouse space. What are your options, and how do you navigate the landscape? If you’re used to running a warehouse using people and elbow grease, the world of warehouse automation can seem a bit intimidating, thanks to all the wild acronyms flying around.
Something to keep in mind: The world of warehouse automation and optimization is in a state of flux. Warehouse technology manufacturers are scrambling to create solutions that can operate in an e-commerce environment (individual orders versus traditional bulk orders) and to build robots that have the dexterity of humans.
So, if it sounds like everyone’s using a new acronym or buzzword every day, it’s probably because they are. Don’t let it stress you out, but do stay in the know as technology solutions continue to evolve.
In the meantime, here are a few acronyms to understand and to help you keep a pulse on the industry:
- WMS: You already know this means “warehouse management system,” but it’s helpful to understand it in the context of warehouse technology. Simply put, a warehouse management system helps business owners keep track of space. This is different from an inventory management system (often believed to be the same as a WMS). An inventory management system keeps track of items.
- WCS: This refers to “warehouse control system,” which works in tandem with a WMS. When companies have automated technology like a conveyor system or automated storage and retrieval systems (AS/RS), they need a warehouse control system to manage it. One Forbes contributor breaks it down like this: the WMS contains the order fulfillment logic while the WCS contains the MOVE logic.
- WES: WES is a new term on the block. It stands for “warehouse execution system.” It’s arrived in response to the unique requirements of e-commerce warehousing. While a WMS and WCS typically organize picks in waves to optimize labor usage, it makes more sense for individual e-commerce orders to drop picks directly on the floor rather than waiting to batch them all together. Integrating this into overall warehouse systems requires “order streaming,” a capability that wasn’t really necessary for WCS suppliers to provide. A warehouse execution system uses advanced logic to manage the different types of warehouse needs. You may also hear people refer to this joining of systems as a “warehouse automation system” or WAS.
Understanding this terminology saves you the back-and-forth of wondering which category a technology solution falls under. In a nutshell, you need something to organize your warehouse space (a WMS) and something to manage the machinery running around (a WCS or WES).
This is another reason why a warehouse move is a good time to implement a new WMS. Since the jump between categories can be quite extreme, it’ll be easier to justify the expense if you can calculate how it will help you use your new space more effectively (and how it will offset the higher rent through reduced operational costs over a certain period of time).
Different Types of Warehouse Automation
There’s an exciting variety of automation tools that warehouse owners can leverage. This is yet another reason why implementing a new WMS during a move is a good idea.
Automated technology must be properly integrated into your other warehouse systems and some work better together than others. If you purchase new equipment once you move, but don’t take a look at your existing WMS, you’re missing a great opportunity for alignment and synergy.
Consider the following popular types of automation. If something aligns with your business objectives, ask the WMS/WCS/WES vendors on your list how they will help you integrate all this technology.
A conveyor is usually the first type of automation that warehouses employ. With a conveyor system, a warehouse reduces labor costs (and injuries) by more easily moving large goods throughout the warehouse. A conveyor system also allows you to optimize the space in your warehouse since you no longer have to make room for forklifts. You can manage a higher number of orders in a day and reduce errors through this type of automation.
Sortation Conveyor / Sortation Systems
A sortation system is a type of conveyor system that routes packages to their appropriate destination in the warehouse. There are many types of sortation systems and they vary in terms of cost and complexity. Warehouses can choose between a high-speed pusher, which diverts items at a 90 degree angle using pusher arms andpop-up wheel sorters, which use wheels to divert goods at a smaller angle. Other options include cross belt sorters, tilt tray sorters, and sliding shoe sorters.
Automated Storage & Retrieval Systems (AS/RS)
An automated storage & retrieval system, or AS/RS, automates the putaway and picking processes. While AS/RS solutions sound promising, they are best suited for warehouses with specific conditions. Warehouses that would benefit from an AS/RS solution should have:
- A high volume of goods being moved in and out of storage (to justify the cost)
- Regular and predictable operations with very little variability and nuance
An AS/RS system is meant to manage a high volume of movement with low variability since the machinery does not have the dexterity to conduct value-add activities. Moreover, an AS/RS has a high initial investment cost, so the volume of movement must justify the expense.
Finally, an AS/RS is a complex beast, so warehouse managers considering such technology should also consider the overall training and retraining costs associated with it, as well as how it will be integrated into your AS/RS system.
Packaging is another process that takes up a significant amount of time. If your packing process is the weakest link in your warehouse operations, consider using a packaging automation system. This system can assist with carton identification and automated product placement.
Implementing a WMS When Moving Warehouses Encourages Alignment Between Your Technology
We get it. Moving to a new warehouse is a painful project all on its own. So, it’s only natural to avoid adding another project on top of that. However, implementing a new WMS while moving is an opportunity--it’s a chance to wipe the slate clean and assess new technology that can help your business continue to grow. After all, if you’re switching locations, it’s likely because you need more space.
In addition, thinking about new WMS, WCS, and WES solutions is a great way to find out about what kinds of automated technology you can add to your warehouse and how all of your tech can work together effectively.
Want a WMS that supports you at every level of your business’ growth? Schedule your Logiwa demo today.
Written by Ruthie Bowles
Ruthie is a content marketing consultant for Logiwa. Her specialties include small business development and inventory management.