A warehouse can be expensive to run. In fact, unless your business model relies on storing and dispatching orders to third party customers, you’re probably used to treating your warehouse as a business expense, as opposed to a profit-generator.

Quite right too, as many companies now outsource production capability offshore, so the purchase order to receipt process can in many cases be measured in months rather than weeks. This has the obvious knock on affect that more stock is held in the warehouse to account for poor forecasting or unusual order patterns.

Here are some of the tell-tale signs that your warehouse is costing you more money than it should. Any one of these signs will indicate that your business is ready for the many benefits that a good WMS can bring.

Or if you already have a WMS, these signs might indicate that you are ready for a change.

Your deliveries are consistently late and your customers are complaining

Fast and efficient delivery is no longer a USP. Thanks to eBay and Amazon, it’s now standard business practice. Customers in all industries take it for granted that they’ll receive their orders in no time at all. Any business that fails to meet these expectations is going to struggle to compete.

Not all late deliveries can be attributed to bad traffic. Sometimes the blame lies in your order processing systems. So if you’re missing your On Time in Full (OTIF) targets, it’s probably time for a change.

You have ever increasing customer claims

A single error can cost you dearly. For example, PODs are increasingly coming back as inaccurate when the order is received. It creates piles of paperwork and headaches for everyone. But worst of all, it creates the wrong type of experience for the customer.

Far too many of these issues can be attributed to simple human error. Yet with a good WMS, this margin of error can be almost entirely eliminated, thanks to simple RF scanners. The result is more accurate stock records, and more importantly, more satisfied customers.

You have no idea what’s going on with your inventory

Are your purchasing and planning staff happy with the state of the inventory figures? Are they making considerations for inaccurate stock balances?

Are you more than 90% certain of your location accuracy? What’s inbound? What’s outbound? What’s in dire need of replenishing?

A good WMS will allow you to step away from costly and time consuming four wall counts. Most companies strive to have cyclical or perpetual inventory counting systems, but for most, the reality on the ground is a completely different story.

The nature of ERP based systems mean that all movements within the count area must cease whilst the count is in progress. No one has the time for that these days.

But you’d be amazed at the number of simple problems a WMS can eliminate overnight.

There’ll be less shrinkage from the mishandling of stock. Your audit trail will be reduced to a more manageable level. All of your stock could be put away in the correct location, and you’ll be able to continue working even while stock counts take place.

So if your inventory is currently a closed-book, a WMS will shed some light on everything.

Your warehouse is a cluttered maze where nothing makes sense

This is perhaps the most obvious one. If your warehouse is a disorganised mess, then you need a WMS.

Do you frequently run out of places to store your stock? If so, your first instinct might be to simply invest in more space. However, a much more cost-effective move would be to invest in a system that will enable you to make better use of your existing space.

Does your team struggle to effectively manage tasks, to the extent that you often feel like you’re paying too much and getting very little in return? Your first instinct might be to downsize your staff. But that’s not going to solve your problem. After all, if your existing team is currently overwhelmed, how could a smaller team possibly cope?

Again, a much more cost-effective move would be to invest in a system that enables your existing team to better manage their workload.

In fact, it is fair to say that almost any problem encountered in a warehouse environment can be solved by a good warehouse management system.