10 Signs Why Your SMB Needs a Warehouse Management System

| By: | Category: Distribution / Manufacturing

In today’s high tech and fast paced world, your competitors are businesses who are keeping customers happy with faster and better services for less. Due to retailers like Amazon, who are raising the bar on rapid, error‐free fulfillment at extremely low cost per unit, consumers today expect that orders will consistently ship the same day, without mistakes or any wrong items. As a result, small to medium size businesses (SMBs) should be concerned about if the performance of their business is being impacted due to lack of Warehouse Management System (WMS).

Warehouses and distribution centers are dynamic environments where many different challenges arise. The truth is, SMBs simply cannot afford to keep using a manual paper‐based approach to manage warehouse, because any business that is slow or sloppy in their warehouse and fulfillment operations, risks losing customers to those that can execute well.

If there are still questions as to whether or not your SMB needs a WMS, leading Enterprise research firm ChainLink highlight ten red flags to seriously consider:

  1. Error rates climbing or unacceptable—The more complex your warehouse and distribution center become, the more mistakes and errors will occur such as wrong items or quantity shipped, incorrectly packed or damaged goods, incorrect paperwork, and other customer claims that will result in more returns and chargebacks.
  2. Missed deadlines/high expediting costs—if suboptimal layout, picking sequences and paths, poor slotting decisions and extra time spent looking for items are leading to missed deadlines and high expediting costs, you need a WMS. A warehouse and WMS that have been configured for optimized slotting increase the pace of picking and ensure that cycle counts are done efficiently. WMS can also ensure that invoices are issued in a timely manner once items are shipped.
  3. Low fill rates/low perfect order rates— Inaccurate forecasts, late deliveries from the supplier, inaccurate inventory records, poor visibility into stock on hand, and picking issues are all indications that you could use a warehouse & distribution management software.
  4. Fulfillment costs rising or too high— As your business grows, the fulfillment cost per unit should go down, not up. However, the battle for ever‐faster fulfillment and shipping, in addition to inefficient utilization of warehouse labor and space can affect the profitability of your business. A warehouse management software for small businesses can ensure your business stays profitable.
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  6. Running out of room— what you need is a properly implemented WMS combined with optimizing your site’s layout and processes. By automating warehouse management, you generate higher throughputs from the same space, postponing the move to a bigger space even as your business grows.
  7. Chaotic environment/flying blind— if you don’t trust the information coming out of your warehouse, you have trouble meeting traceability requirements, or you struggle to generate and send timely ASNs, it’s time for a WMS. You need a WMS for SMBs that provides the disciplines and data collection necessary for visibility, traceability and automatic document generation.
  8. High turnover/uneven workloads—A chaotic environment, too much manual administrative work, and uneven workloads can lead to workers frustration, low job satisfaction, and high staff turnover. If you find you’re spending an inordinate amount of time hiring, training, and micro‐managing staff about what to do and where things are, it may be time to switch to a WMS.
  9. Jammed up receiving dock— Is your receiving area an obstacle course with incoming shipments sitting for hours before they are received into the system? Are trucks backed up in your yard waiting to unload? Are items often missing or misplaced during receiving? These are all sign that you could use a WMS. A jammed receiving dock slows overall throughput, increases lost and damaged items, and creates safety hazards for workers.
  10. Products handled too many times—Every extra touch or move adds labor, time, risk of damage, and errors. Implementing a WMS provides the opportunity to reassess all your processes and see if there are better ways to do things, including improving the layout and flow of your warehouse.
  11. Unable to keep up with growth and demand peaks—As an overarching symptom of all of the above, your distribution center may be the bottleneck constraining the growth of your company and/or your ability to reach your maximum revenue potential during peak seasons. In this case, a WMS can be an enabler for the growth and profitability of your business.

A good WMS tames the complexities of running warehouse and distribution centers by providing simple, unambiguous step‐by‐step guidance for tasks in a complex environment, while verifying correct execution at each step. There are different warehouse management software for small businesses today, including cloud based WMS tailored to meet your needs.  If you are experiencing any of the mentioned symptoms, then it is time to take a serious look at implementing a WMS. Postponing implementation of a warehouse management system may be costing your business in ways you cannot afford: higher labor costs, chargebacks, excess returns, and unhappy customers. With top retailers setting the standards with serious deductions and chargebacks for mistakes, the standards have become very high. Be the company with high customer satisfaction ratings by implementing a WMS.