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Comparing cost and value: Is your WMS helping or hurting?

22 October 2018 / by Kirk Anderson, Executive VP for Snapfulfil North America

We’re in an era of unprecedented data accessibility. The warehouse knows more about its customers, their buying habits and critical tasks than ever before, enabling more precise operations. And as e-commerce continues to grow, deeper process visibility is more important than ever before. 

But greater data accessibility also means we’re expected to deliver measurable results – to justify every penny we spend on people and processes. Adopting a best-of-breed warehouse management system (WMS) can help you achieve greater efficiency, but you’ll need executive buy in before you can invest. 

If you’re ready to make the case for a new – or improved – WMS, but need the proof points to gain approval, it’s important to show how a greater upfront investment pays dividends in the future: 

Streamlined processes

As e-commerce giants such as Amazon raise the bar with free two-day shipping, the fulfillment game grows in difficulty. Better processes are table stakes for competing in a digital world; according to a recent Peerless Research Group survey, 70 percent of warehouses begin with processes when looking to reduce cost. However, the same survey found that of those warehouses using a WMS, only 13 percent used a best-of-breed solution, while 42 percent used a legacy WMS. 

Paper-based and legacy warehouse management systems will help you track inventory location, but in today’s fast-paced warehouse environment, that’s no longer good enough. You need technology that actively measures picking and packing tasks, delivering the process and sales data you need to determine where operations are lagging. 

By cutting down on wasteful operations and reorganizing your warehouse into optimal picking paths, you’ll save money daily – even hourly – and have the efficiency necessary to achieve greater profitability.

Deeper demand planning

Warehouses are used to the traditional peak season, ramping up in early November and moving full speed until the days before Christmas. But as events such as Amazon Prime Day in July demonstrate, demand spikes aren’t limited to the holidays anymore. You may not be able to predict every overnight craze, but you can be better prepared to meet demand – the key is understanding trends over time. 

Older warehouse management systems often exist in fulfillment center vacuums – they’ll track your team’s data, but they don’t integrate with your business’ other systems to paint a broader picture of your operations. An advanced WMS is designed to pull in information business-wide, including sales data. An investment in WMS is an investment in visibility, delivering insights into sales over the last weeks, months and even years. 

With a best-of-breed WMS, you’ll be ready to order more of the inventory you need, avoiding a sellout and enabling higher sales, and less of the inventory you don’t, saving space. You’ll also be able to schedule employees more efficiently, and determine which in-demand products you should move closer to packing stations.

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Better customer experiences

Retailers understand that packages don’t just magically show up on customers’ front porches, but customer expectations for quick, accurate delivery are sky high – and as more fulfillment centers adopt direct-to-consumer shipping models, warehouses are directly responsible for keeping the customer happy. And lest we forget the importance of reputation, a recent National Retail Federation survey found that 79 percent of shoppers view retailer or brand experience as important in determining both A) where they shop and B) how often they shop there. 

Because a legacy WMS won’t support process improvement, there’s a ceiling to the level of customer service you can deliver – and as competition grows, you’ll be left behind while others are innovating. With a best-of-breed WMS, you’ll have the data you need to build a stronger brand reputation. In addition to moving products through the warehouse quicker, a WMS functions as a second pair of eyes during the packing process, maintaining sales data to help you confirm order accuracy. Your warehouse may not manage last mile delivery, but it plays a key role in supporting it. 

Gather the data – and make the case

For warehouses maintaining the status quo, the shift to a best-of-breed WMS – especially the time and monetary investments required upfront – can be daunting. But if you’re looking to compete in an e-commerce-driven economy using a paper-based or legacy WMS, chances are your solution is hurting more than it’s helping. The efficiency delivered by an advanced WMS can outweigh the initial investment. 

If your executives need a push to adopt a new WMS, start by spending time on the fulfillment floor. Observe pick, pack and ship processes, and determine, at a high level, where employees are experiencing pain points. Then, bring your findings to a WMS vendor. You’ll be able to create a cost comparison that truly demonstrates an advanced solution’s value. 

Don’t settle for “business as usual” – with an advanced WMS, you can deliver a better customer experience for less.

 

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