How to Choose a Warehouse Management System
A warehouse management software is vital to the successful management of the warehouse. Research shows that it can improve warehouse efficiency by 27% by facilitating timely order fulfillment, packing, and picking. Owing to that it is essential to know how to choose a warehouse management system from the different types of WMS available.
When used correctly, WMS can propel your warehouse to unprecedented levels of success. Some benefits of using a WMS system include:
- Efficient labor management
- Accurate inventory and management
- Reduced paperwork
So, what factors must you consider when choosing a warehouse management system? Here is your complete guide on how to choose a warehouse management system.
Analyze Your Need for a WMS
One cannot emphasize just how big a commitment getting a WMS is. Not only do you have to spend money on the technology, but you also need to train your employees to use it and acquire the hardware and infrastructure you need to make it functional.
Therefore, it is critical that you thoroughly analyze your need for the system. Otherwise, a lot of time, effort, and resources will go down the drain unnecessarily.
Size is one of the biggest influencers in installing a WMS. If you have a big warehouse with multiple floors and endless storage units, it goes without saying that managing it can be quite a challenge. In such a scenario, a WMS will prove invaluable. But this is not to say that smaller warehouses cannot benefit from WMS. If your warehouse’s storage and removal processes are complex, you also stand to gain a lot from WMS.
For instance, if you store products for an e-commerce store, you may find that packaging requires more attention to detail. This is because you have to pack each customer’s order individually, ensuring that you do not mix up their purchases.
By contrast, if you deal with a business that generally requires items in bulk, packaging and shipping are relatively straightforward. Therefore, with the e-commerce store, investing in a WMS makes good economic sense.
Additionally, if products require specific conditions for shipping, this can add a layer of complexity to the packing process. For instance, if some goods require refrigeration during shipping, while others need to be frozen, you need to take extra care to ensure that they reach the destination in good condition. For this, a WMS can come in real handy.
Budget For Warehouse Management System
Another critical consideration when choosing a WMS is your budget. You don’t want to invest in an expensive system only for you to discover one year later that it does little to boost your business efficiency.
Warehouse management systems typically come in three tiers. The cheapest tier, usually known as a Tier 3 WMS, performs the most basic warehouse management functions. These include confirming and tracking inventory and stock.
A Tier 2 WMS performs more complex functions, including:
- Managing customer portals
- Providing restocking, receiving, and storage guidelines
The most expensive systems (Tier 1 WMS) can perform more complicated tasks like assigning work to employees, guiding them to the correct location of the goods they want, forecasting, and improving response times.
Another way to gauge the cost of a WMS is by listing down the price of each item. For instance, you need to consider the licensing, training, development and upgrading, and support costs. For this, you should have a candid conversation with your provider to get an accurate figure on the cost of the system.
While discussing the costs with your provider, beware of hidden charges. These may include seemingly small expenses like travel costs that accumulate to outrageous sums over time. Additionally, comparing WMS costs can help you negotiate the pricing better.
When creating a budget for your WMS, the final tip is to consider the 5-year cost of using the system, inclusive of the hardware and infrastructure costs. If the figure makes business sense and you will get worthwhile returns, acquire the system by all means.
Ensure Seamless Integration with Existing Systems
Supply chains stretch beyond the confines of a business and encompass 3rd party services. While an ERP might be able to unify the internal business, the logistics aspects of a business need to be handled efficiently with a specialized WMS. The relationship that your business has with your ERP vendor will impact the success of a WMS. You need to communicate and have a good working relationship from the start. The integration needs to allow for seamless data communication between both systems.
This is critical when the information is used for internal work and communicated with internal or external partners. Both systems can speak the same language, so new data does not have to be re-entered daily. This causes errors and isn’t good for business.
Request for Information on How to Choose a Warehouse Management System
You have already settled on whether you need a WMS system and how much you can spend on it by this point in your decision-making journey. Now it is time to contact vendors for offers.
The best way to do this is to create a Request for Information or RFI form. This form is a questionnaire to help you obtain the requisite information.
Start by describing your business, what it does, your vision for it, and how the WMS fits into your business. You should also discuss your warehouse at length, providing pertinent details such as:
- The number of loading bays
- Picking and packing locations
- The average number of transactions in a day
- The primary users of the system, like pickers, packers, forklift users, or management
Then, create a list of questions you wish your provider to answer. For instance, you may request information about:
- Their area of specialization and expertise
- Owner of the system’s source code
- WMS features
- Average size of their clients
- Number of clients and sites using their product
- Ease with which you can connect multiple warehouses
- Ease of integrating the WMS to your ERP,
- Availability of pre-built marketplace integrations
- Level of support you can expect from them
- Estimated cost of using their product
When creating your RFI, it is best to refrain from describing how you intend the product to work. This is because you may cloud the ingenuity of your provider, thus blocking out more efficient and possibly cheaper options that would be the best fit for your business.
The Provider’s Commitment
The final consideration for choosing a WMS is the provider’s commitment to your company. The relationship you develop with your provider can be critical to the success or failure of your business.
You can gauge a provider’s commitment to your business on their enthusiasm and response to your concerns regarding the systems. A committed warehouse management system provider will always look for the most efficient solution to your issues and point out a cause of action that best serves your needs.
The Final Word on How to Choose a Warehouse Management System
No doubt choosing the perfect warehouse management system from the different types of WMS available can be complicated. However, there are numerous factors to consider settling for a well-serving warehouse management system as mentioned above.
If you are looking for a reliable WMS provider, look no further from our company. We will guide you extensively on how to choose a warehouse management system that best fits your needs. So, contact us today to start the conversation on the best options of WMS for your business.