What is a WMS? Do You Need One?

What Is a WMS System?

Then consider all of the management activity that makes these tasks happen:

• Liaise with carriers regarding transportation schedules so there is enough staff on hand for processing inbound freight

• Liaise with LTL,FTL and parcel carriers to plan outbound shipments to ensure orders get to customers on time

• Compile pick lists that consider things like the day’s labor force, the number of next-day or two-day shipping orders that need to be

• bumped up higher on the list, etc.

• Optimize walking paths within the warehouse so that workers take the most efficient route during directed putaway and picking

• Create packing processes to ensure packing materials are used efficiently (e.g., small items aren’t thrown into oversized boxes)

• Monitor inventory levels within the warehouse (or multiple warehouses) and reorder at the right time

• Calculate safety stock levels to ensure there are no stock outs while also avoiding excess inventory to minimize carrying costs

Central to all of these activities is data - or information.Think about all of the information managers need access to in order to run their warehouses:

• Carrier rates and transportation schedules

• Customer orders and shipping information 

• Inventory data

• Bin/storage locations

In the early days of a business, all of this information likely exists in multiple spreadsheets. A manual workflows like spreadsheets make it difficult - if not impossible - for business leaders to make data-driven decisions in real time because it takes so long to consolidate, clean up, and analyze information.

With a WMS, all warehouse data exists in one place with a centralized record of how goods move through your warehouse. You can track a good from the moment it:

• Arrives in your warehouse

• Gets placed on a shelf

• Is flagged in the system as part of a pick order (i.e.,a job)

• Gets packed in a box

• Is marked as ready to ship

Do I Need a WMS?

With limited new space available, companies are forced to optimize their existing warehouse space, which is often easier said than done. Warehouses are complicated environments—they bring people, products and heavy-duty machinery together in a frantic attempt to get the right product to the right customer at the right time.

Simply gaining visibility over every process in a warehouse is a challenge, let alone optimizing the entire beast.

Companies are turning to warehouse management system (WMS) software as a solution for improving efficiency and accuracy in their warehouses. A good warehouse management system:

• Optimizes inbound and outbound processes
• streamlines order and inventory flow between sales channels and warehouse
• Allocates labor efficiently
• Boost employee morale
• Improves relationships with customers and suppliers
• Reduces operating costs
• Manages inventory efficiently
• Integrates with enterprise resource planning (ERP) tools
• Enhances security and safety
• Provides visibility and transparency
• Encourages continuous improvement initiatives

If you’re new to WMS systems, transitioning might sound intimidating. The good news? It doesn’t have to be!

Warehouse management systems exist in all shapes and sizes. Some WMS solutions are massive tools designed to manage an enterprise’s entire warehouse operations and seamlessly integrate into adjacent supply chain management tools.

Others are simply enhanced inventory management systems that eliminate manual entry and save time for small business owners.

Whether you’re curious about how large enterprises organize warehouse operations or you’re interested in leaping from spreadsheets to cloud-based apps, we’ll give you the ultimate primer on WMS systems.

What Are The Benefits Of a WMS System?

If you've been running your own warehouse with an outdated system or an ad hoc collection of spreadsheets, a new comprehensive WMS will be a revelation. Because a WMS is such an integral part of the operation, it's not a quick-fix solution. It will play an essential role in the operational efficiency of your company, so take some time to learn about the best WMS systems in the market.

A leading WMS system will increase inventory visibility, improve order fulfillment accuracy, support automated data collection and boost productivity across your operation. With Logiwa Warehouse Management System, your warehouse management operations will experience a number of critical benefits, including:

• Improved inventory management efficiency, including enabling continuous inventory counting vs. periodically shutting down to take inventory.

• Reduced shipping errors

• Automatic ordering and replenishment using real-time information.

• Reduced paperwork (and administrative expenses)

• Reduced product returns

• Improved customer service with better warehouse control and improved pick and dispatch accuracy.

• Improved trace-ability in both directions.

• Effective labor planning

Which WMS System Is Good For My Company?

Your system should make it easy to add new devices like scanners and printers and accommodate new technology like RFID and Bluetooth tags. Look for a system that will easily connect with emerging technology like warehouse automation and robotics.

If you already have existing warehouse equipment and third-party software solution, you will want to make sure your new WMS is compatible. Some WMS providers charge development fees to build integrations between the WMS and your current systems. Logiwa offers integrations with more than 70 of the most popular services including online marketplaces, shipping solutions, accounting and ERP and other common applications. You won't have to invest in time and resources to create integrated data sharing links.

As a tactical execution system, a WMS will generate positive ROI in a short time frame. As a strategic business investment, a robust WMS can transform your shipping and fulfillment operations. The more pallet moves and pick per day, the higher the ROI. Improved efficiency can mean lower labor and equipment costs by doing more with less. We've seen shippers boost their volumes 2.5 times with the same equipment by using Logiwa.

How Much Does a WMS Solution Cost?

Since different companies require unique solutions, most WMS vendors won’t show a price breakdown online or in marketing materials. That said, there are specific guidelines to keep in mind when determining your warehouse management system budget:

• Consider perpetual licensing vs. subscription models: Vendors typically reserve the perpetual licensing model for on-premise solutions. In this scenario, the client installs the software onto their computer. Companies use the subscription model for software-as-a-service (SaaS) solutions that use off-premise software such as the cloud.
• Seek out bids from multiple vendors: Initiate an RFP process which explains your WMS features requirements. Detail your business requirements in tender documents and distribute them to a handful of WMS providers. Keep the documents and your questions short and focused. RFP responses can cost thousands of dollars in time and resources. If a vendor can’t justify the cost, they won’t respond.
• Plan for first-year-only costs: The first year carries significant costs due to implementation and training.
• Assess the necessity of additional features: WMS solutions with advanced integration capabilities or enhanced data analytics functionality cost more, so consider the business case for these features before forking over more cash.
• Secure discounts on first-year fees: Just because the first year is more expensive, doesn’t mean you should pay full price. WMS vendors are just as eager as you are to overcome the tough onboarding stage. The sooner their software becomes a vital part of your business, the more assurance they have that you’ll continue using and renewing their service. As a result, most suppliers offer significant discounts and rebates for those pricey first-year fees. In some cases, the supplier will offer a reduced monthly subscription fee for the first year while you learn how to use the technology.

BONUS: Before you read further, download our WMS Requirements Template to help you identify which WMS provider meets your unique needs.