The key benefits of a warehouse management system: the receipt and put away process
Welcome to the first in a series of blog posts on the Return on Investment (ROI) which can be gained from the implementation of a Warehouse Management System (WMS).
Welcome to the first in a series of blog posts on the Return on Investment (ROI) which can be gained from the implementation of a Warehouse Management System (WMS). In this series I will be looking at each of the key warehouse processes and delving deep to show you the impressive cost savings you could gain for your company by implementing a warehouse management system.
The blog will aim to highlight the non-productive times spent capturing data manually compared to automating the data capture process. As Indigo has been around for over 30 years, we have extensive experience in demonstrating ROI and these blog posts will give you food for thought in terms of how you can save thousands for your company.
In this first post I’ll examine the put away process. Read on as there are some stunning cost savings to be made…
Typically, in a business which does not run a WMS, the receipt of stock into a warehouse is a manual process consisting of checking a purchase order, confirming the correct goods have been received and then manually inputting this receipt of goods into the system. These goods then sit in the system and as far as a sales order process is concerned the stock is readily available for allocation.
The reality in the warehouse however is very different.
This received stock needs to find a home in the warehouse. Ideally somewhere where everyone will know where it is. What we’ve found is that typically where no WMS is in place there will be warehouse operators who will ‘know’ where to find it. This is perhaps the worst scenario of all. If the warehouse operator ‘in the know’ decides to leave the company or they are simply unavailable due to holiday or sickness then chaos can ensue and on time delivery goals are thrown out of the window.
Once you have a WMS installed, the decision making process is entirely removed from the operators plus the inventory, warehousing and stock figures are updated automatically in real time. Put into practice, with a WMS the operator scans the pallet label and the RDT instructs the operator to go to the most suitable storage location. Structured cascade put away rules will ensure that stock is located in the most strategic location available. For example, when storing allergens or nut based products, it is an absolute necessity to ensure that they are not located near non-allergen based products. With a WMS, put away profiles can be pre-defined therefore this kind of cross contamination can be automatically avoided. If the stock is not put away in its pre-set location, a 2 digit reason code will be required to identify this non-conformance.
I recently uncovered a great example of cost savings which can be made in the put away process by implementing a warehouse management system.
A particular company received 750 container deliveries a year. In the absence of a WMS, each one of those containers took approximately 3 hours to manually process the put away transactions. This included recording into a spread sheet the locations where the stock was ultimately stored. A quick calculation showed that the net time taken to do this over the year was 2250 hours which would translate into a staggering cost of at least £22,500. The 750 container deliveries per year are typically average for most businesses. How much could you save?
But of course put-away is only one piece of the warehouse jigsaw and you don’t need to stretch your imagination too far to come up with a total return on investment for the whole WMS project.
Next time I’ll be looking at replenishment and how a WMS can save costs in this area.