In just a few months, on 1 April 2024, the UK government will introduce the largest ever increase to the minimum wage in cash terms. It will have significant implications for logistics operations, at a time when inflation continues to increase the overall cost of doing business. Our advice to warehouse managers is to act quickly and explore how adding a Warehouse Management System (WMS) solution to your logistics operations can help to reduce the negative impact this rise will have on business profitability.
We all agree that no one should be forced to live in poverty and that employers should be paying a fair wage that allows all people to live a decent life. The government has recognised this and legislated that the National Living Wage should be increased and that the rises should apply to all workers aged 21 and over. The annual increases to the minimum wage and national living wage with effect from 1 April 2024 are as follows:
- 21 and over – £11.44 (increase of £1.02)
- 18-20 – £8.60 (increase of £1.11)
- 16-17 and apprentices – £6.40 (increase of £1.12)
These wage rises are very positive for millions of workers across the UK who have been struggling with the cost of living crisis. At the same time, many businesses are struggling for cash and finding it increasingly difficult to hire and retain good workers – especially in a fast moving environment like the warehouse. But what if you didn’t need so many people to run an efficient warehouse operation, because it was being supported by technology? Here are some of the ways a WMS will help you to rein in the rising costs of employing warehouse operatives.
Improved inventory visibility and accuracy
Real-time inventory tracking helps prevent problems associated with having too much or too little stock. By overseeing the inventory management function, a WMS will reduce the need for manual intervention and any reworking of tasks. Overall, by operating with improved accuracy levels as standard, your warehouse will be reporting fewer errors in order picking, packing, and shipping. This further improves efficiency by reducing the need to manually correct mistakes. Implementing automated cycle counting processes using a WMS reduces the need for extensive physical inventories, saving time and labour expenditure, while maintaining ultra accurate inventory levels.
Automates workflows to limit manual intervention
The need for manual intervention is minimised when using a WMS, because the software automates all routine tasks – everything from order processing and picking to packing and shipping orders. The WMS guides workers through every stage in a process and is set to automatically verify that each element was properly completed in a sequence. Over time you will notice you can run to maximum efficiency without needing to increase your head count, even during peak periods.
Optimised workforce management
If you are heading for a busy time, a WMS will ensure you don’t over staff the warehouse unnecessarily. It will optimise recruitment and workforce management by identifying priorities and workforce requirements in advance, with the required skill sets. This means warehouse managers can allocate human resources more effectively, avoiding overloading specific areas or unnecessarily hiring in expensive contract workers.
Streamlined order fulfilment
Picking and packing orders – especially for e-commerce sales – is time consuming and accounts for a large proportion of workforce costs in a warehouse. Using a WMS streamlines the entire order fulfilment process, reducing the time and labour required to pick and pack orders accurately. More advanced features like support for wave picking of multiple orders and pick route optimisation further enhance warehouse performance, ensuring efficiency levels are always maximised.
A warehouse that is run with paper requires a high level of manual data inputting and administration – which is costly and time consuming. Added to this, the data being manually input is almost always out of date by the time it hits the back office database. By automating documentation and record-keeping with data captured at source and in real-time, a WMS saves on resource time and cuts the risk of errors.
Many companies that have introduced a WMS into their warehouse operations report significantly reduced labour costs as a result. Automating manual processes, optimising workflows, and achieving all round improvements to productivity and workforce efficiency can lead to significant cost savings in terms of reduced manual labour requirements and all the associated expenses of employing warehouse operatives. Even in a short to medium term timeframe, users will see a rapid payback on their investments.
To discuss how a WMS can help your company to mitigate the costs of increased wages contact Indigo Software.
Around three quarters of business executives admitted that they do not have a high-level of trust in their data, according to a study compiled by HFS Research. 89% of the same survey respondents also admitted that having a high level of data quality was absolutely critical for successful decision making.
Quality is multi dimensional and includes many variables. Data needs to be accurate. It needs to be up to date and timely. It needs to be easily accessible and shareable. A best of breed Warehouse Management System (WMS) improves all these factors, ensuring that the data you need to rely on is dependable, always available and of the highest possible quality.
Over time, when data is consistently poor quality, it leads to poor data trust, which can become a very significant problem inside organisations. It undermines confidence that individuals within an organisation have in their abilities to do a good job and over time, it erodes confidence in the organisation as a whole.
Take accuracy as a starter. Accurate data is one of the critical success factors in any warehouse, because incorrect information really does cost money in the most basic sense. For instance, if stock availability data is wrong and the items showing as available have actually already been sold, how can orders be dispatched to a customer on time? The same applies for manufacturers needing to pick for a production line. And there are plenty more instances where inaccurate warehouse data creates problems.
During our project work with warehouse managers, we encounter frequent problems with data trust. It typically occurs inside warehouses that are managed without a dedicated WMS solution. The company concerned might be using spreadsheets, or a legacy ERP system that relies on batch updates. In most cases, the data is being entered manually, which results in human error and delays in updating the back office systems. It means the information that sales operations and warehouse managers are using for their decision making and resource allocation isn’t up to date. If employees cannot rely on the accuracy of their data, it can lead to them by-passing business systems and creating their own alternative reporting or management systems. We see these problems all the time before companies start to use their WMS system.
Another issue contributing to poor data trust is the existence of data silos. These arise when business systems are not properly integrated and different departments or teams maintain separate databases. Introducing a WMS helps to break down data silos, because up to the second information, captured at source, can be shared across several business functions.
Here are six more ways a WMS helps to build data trust and why it is so important in a warehouse:
Inventory management – Data trust is essential for maintaining accurate inventory records. Inaccurate data can lead to discrepancies between the WMS records and the actual physical inventory in the warehouse. This can result in issues such as stockouts, overstock situations, and fulfilment errors, or delays to production for manufacturing companies.
Shipping orders on time and in full (OTIF) – Reliable data is critical in the order fulfilment process. Ensuring that the WMS has accurate information about product availability, location, and quantity helps prevent errors in picking and packing, reducing the likelihood of shipping late, or sending incorrect items to customers.
Labour and resource management – A WMS relies on data to optimise the allocation of resources, such as manpower, equipment, and storage space. Trustworthy data ensures that these resources are utilised efficiently, leading to cost savings and improved warehouse productivity.
Full visibility in real-time – Managers and staff need accurate information to monitor the status of orders, track inventory movements, and identify any potential issues in the supply chain. Reliable, trustworthy data ensures that stakeholders have confidence in the information presented by the WMS.
Customer excellence – Inaccurate data can lead to fulfilment errors and delayed shipments, negatively impacting customer satisfaction. By maintaining data trust in the WMS, businesses can enhance their ability to meet customer expectations and provide a seamless order fulfilment experience.
Auditing, compliance and reporting – Many industries including those that are highly regulated like food manufacturing and pharmaceuticals have compliance requirements related to inventory tracking and reporting. A WMS makes it straightforward to meet these compliance standards and facilitate accurate reporting for audits or other regulatory purposes.
When your warehouse data can be trusted, you have a solid foundation for continuous improvement initiatives. Using a WMS with real-time integration across the business, warehouse managers can analyse performance metrics, identify areas for improvement, and implement changes to enhance overall efficiency.
To learn how you can introduce the highest levels of data trust in your warehouse contact Indigo Software
Research released by the business advisory firm BDO highlights just how attitudes towards minimising waste have changed. Up to £1.3 billion was deployed into circular economy investments in the UK in the 12 months between spring 2022 and 2023, with the industrial and manufacturing sectors being the most prominent. These two sectors accounted for 36% of deal volumes in 2022, topping the circular economy investment league for the second year in a row.
What this data highlights, is how a 21st Century more sustainable ‘make do and mend’ mindset is rapidly taking over British industry. It means that many manufacturers are having to adapt their warehousing operations to cope with increasing requirements to store more spare parts for repairs. This certainly increases the complexity of warehousing operations and creates a very strong business case for investing in a Warehouse Management System (WMS) solution.
Gone are the days when people would accept throwing away equipment rather than trying to repair it. Now fixing is being legislated. The ‘Right to Repair’ movement has already seen legislation passed in a number of US states requiring manufacturers to offer spares. The UK has introduced similar measures and now requires manufacturers of consumer durables like washing machines, fridges and televisions, to supply consumers with spare parts for ‘simple and safe’ repairs. Other parts for more complex repairs must also be freely available to professional repairers, with this level of expanded support required for up to ten years after the original sale date. Very soon the rules will be expanded to include smartphones and a much wider band of consumer electronics that would otherwise end up as waste electrical and electronic equipment (WEEE).
For manufacturers and also service agents, the legal requirement to offer repair services means a sudden need to establish a comprehensive spare parts operation. This will likely involve storing and shipping a huge number of individual SKUs, for current and legacy product lines. It may be the first time some manufacturers will have been required to provide spares and could mean a total overhaul of their warehouse operation. Here’s how a WMS solution can help ease the transition to a new way of working.
Space utilisation and location management – Storing and shipping spare parts will require the introduction of many new warehouse locations, at a time when extra space may be at a premium. Having to re-configure a warehouse to store hundreds of small items could be a logistical nightmare, but it becomes very simple when a WMS takes control. The WMS software will identify the best places to put every item based on how often they are needed to achieve the fastest routes around the warehouse. Available space will be flagged for use and up to 30% more items can be stored in a given area, because the system will guide operatives to find the parts they need. A WMS also allows for the creation of dedicated storage locations for spare parts based on their characteristics, such as size, fragility, or storage requirements. This ensures that spare parts are always stored in optimal conditions and are easily accessible when needed.
Integration with automated racking and shelving – Creating a spare parts warehouse could mean having to go higher, with taller aisles and racking. Many manufacturing companies have already introduced automated shelving or carousels to bring the items to pickers in the warehouse. These can be integrated with a WMS to make the whole picking operation completely seamless and as fast as possible. Rather than having to go to the stock locations, items are delivered to pickers on a packing desk for maximum speed.
Pick multiple orders simultaneously – A spare parts operation will require many small shipments to be created and trying to pick each order individually will be time consuming and inefficient. A WMS allows multiple orders to be handled concurrently. Known as wave picking, this method asks pickers to select the right quantities of the same item needed for different customer orders when they reach a certain location. The part-picked orders are tracked by the WMS and then, once completed, groups of orders can be approved and sent off to shipping.
Avoid spiralling labour costs – Picking costs typically represent the bulk of labour overheads in a warehouse and this could significantly increase in a busy spare parts operation. Using a WMS, manufacturers can achieve many efficiency gains and keep a tight control on labour costs. For instance, when migrating from paper to a WMS, most companies see a 30% improvement to warehouse efficiency and productivity. This will be important because spare part services are not necessarily going to be a big profit making activity, just something manufacturers are legally bound to offer to reduce environmental waste.
Automate inventory management – Stock counts and replenishment management is another aspect of warehouse management to get right for manufacturers introducing a spare parts operation. Without the right technology in place, it wouldn’t take long for out of stocks to be creating supply problems and damaging customer relationships. When a WMS is controlling key warehouse processes, stock management can be automated, with ongoing replenishment requests triggered as soon as stock levels at a particular location hit a minimum level. Perpetual inventory checks also become part of the day to day routine, meaning the warehouse never needs to close for a stock check. For spare parts with specific batch or lot numbers, a WMS can track the movement and usage of each batch. This capability is essential for industries with strict quality control requirements.
Over the coming years we can expect governments to be adding more and more items to the list of consumer products expected to be repairable. Why not take a proactive step towards becoming a more sustainable and environmentally responsible brand before this happens? By adding a WMS to your warehouse, you could be launching your spare parts division in weeks and maybe even create a very important competitive differentiator.
We hear regularly about Industry 4.0, Digital Transformation 2.0 and how organisations are adopting AI to help run their businesses more efficiently. These changes are happening at lightning speed and yet the reality in many warehouses across the UK is very different. These are warehouses managed with paper processes, where operatives input the day’s transactions manually using spreadsheets. Warehouses where knowledge is power and information is always slightly out of date. Places where if an operative leaves the business, they take all their knowledge of processes, stock locations and customer special requirements with them, leaving an efficiency gap to fill.
Our message to warehouse managers across the country is simple. If you haven’t transitioned already, make 2024 the year you implement Warehouse Management System (WMS) technology. And when you do, here’s how you can expect to benefit:
Better accuracy and fewer errors
Relying on operatives to manually input the day’s transactions comes with a high risk of human error, it’s a boring task and very easy to make mistakes. By automating key processes like inventory management and order fulfilment, the likelihood of stock being misplaced drops dramatically, further improving overall accuracy levels.
Up to the minute visibility and real time tracking
Alongside the inevitable mistakes made when data entry is manual, there are delays which, when running a busy sales operation, are unacceptable. Switching to paperless systems means management have a real-time view of what inventory levels are. They can see the status of the day’s order pool and know exactly where shipments are in the dispatch dock. Having this level of information available translates into better, faster decision making and improved all round business agility.
Rein in and reduce operating costs
Eliminating warehouse paper processes allows employees to work much more efficiently and follow highly optimised workflows delivering significant business cost savings.
Cut your warehouse carbon footprint
Businesses are setting net zero targets and going paperless will reduce your warehouse’s consumption of paper and help cut waste. For example using technology in a fresh produce environment means stock can be rotated more efficiently and shipped more quickly. The result is faster, fresher deliveries to consumers and less stock being wasted because of sell by date issues.
Poised for business growth
Paper based processes are viable up to a point but once a warehouse reaches a certain throughput, they become unsustainable. In contrast, a paperless warehouse driven by software can scale easily as the business grows. If more operatives are needed for a busy period, there’s no real learning curve to climb before they become fully efficient.
Better place to work
Almost without exception, when a warehouse switches to paperless working, even the most sceptical operatives admit they wouldn’t want to return to the old way of doing things. Technology creates a much more ergonomic and pleasant working environment. Workers can reach their targets more easily, which means higher pay and enhanced efficiency.
Implement ongoing warehouse improvements
Efficiency and accuracy aside, one of the most powerful benefits of going paperless comes from the business insights that are captured automatically whenever a transaction is completed. Over time, this data can be analysed to further optimise warehouse processes, resource utilisation and to enhance warehouse layout.
What are you waiting for?
At a time when many businesses are continually seeking ways to enhance operational efficiency, be more innovative and reduce their environmental impact, it is surprising that many warehouses still haven’t switched to paperless working. Don’t be one of them.
Why not make 2024 the year your warehouse finally ditches paper and spreadsheets? Indigo Software offers a unique rapid results WMS, Indigo QuickStart to help ease the transition for even the most paper driven warehouse.
Food raw material and ingredient costs have risen sharply over the past 18 months and food manufacturers have been forced to respond with consumer price increases in many instances. Today’s food shop costs around 12% more than it did a year ago according to September 2023 figures from the CPIH, caused as much by global events as post pandemic shortages. Some price rises were inevitable, but long term, there is a limit to how much these increased costs can be passed directly onto the consumer.
It is important that food manufacturers can identify as many ways as possible to maintain their profit margins, by implementing improvements to operational and process efficiencies.
One major cost centre for every food manufacturer is the warehouse, because it holds such a large volume of inventory – raw ingredients, packaging materials and finished goods. Being able to carefully control operations and processes within the warehouse can deliver big savings for food manufacturing businesses, which is why investing in a Warehouse Management System (WMS) software solution is a key business decision.
Some of the key advantages of introducing a WMS include the following:
- real-time visibility of inventory levels,
- ability to automate routine warehouse tasks,
- ability to optimise workflows including inventory management,
- tightly control stock rotation, order fulfilment and dispatch process,
- automate goods receiving and stock putaway,
- optimise stock picking for production and finished goods shipments.
This blog goes into these process improvements in detail, with an overview of the primary process improvements that food manufacturers can expect when they implement a WMS solution.
Key processes improved when food manufacturers implement a WMS
Manufacturers have a lot of capital tied up in inventory and effective management is critical to maximising profits. WMS software automates inventory management leaving nothing to chance. The software allows businesses to track, monitor, and control their inventory levels in real-time. As many food manufacturers will be part of the BRC accreditation scheme the tracking of stock movements digitally removes a huge amount of paperwork from the process and allows real-time audit trail investigation when required. Operators can find the stock items they need quickly for production requests and customer orders. Sell by and use by dates are automatically managed and stock items rotated according to FIFO (first in first out) principles. This means any wastage resulting from products not being used before their end dates can be completely avoided. Shrinkage is cut through accurate, ongoing stock counting and inventory reconciliation. Stock replenishment is efficient because the WMS alerts operatives when inventory at a certain location falls below set limits, which minimises out of stock situations and avoids production delays.
Goods Receiving and Putaway
WMS software makes the goods receiving and putaway process very efficient because it avoids any need for paper in the warehouse. Data pertaining to deliveries and putaway rules is captured automatically and can be turned into management reports instantly. The software prompts operatives to find available locations, allowing up to 30% more stock to be stored in a warehouse through improved space utilisation. WMS systems also support real-time goods receiving processes that minimise handling efforts, including cross-docking.
Getting the right products out to the right customers at the right time, for the right price remains the de facto target for every warehouse. Getting order fulfilment operations tightly optimised is critical and one of the biggest benefits of WMS software. Order processing and fulfilment is automatically optimised by having a wide range of picking and order allocation strategies to choose from. WMS software supports zone picking, batch picking, and wave picking, to suit many different order profiles. It also enables efficient order consolidation and packing options, with the ability to integrate automated labelling equipment, further streamlining the shipping process. This is a vital capability for food manufacturers, especially when handling foods with a limited shelf life.
Warehouse Design Optimisation
The way a warehouse is laid out has a huge impact on running costs and efficiency. WMS software supports optimising warehouse layout, by recommending the best locations for different inventory categories. As a result of gathering data on the fastest moving lines, inventory packaging dimensions, selection rates for different production runs and walk sequences, a WMS will recommend the best storage zones, bin configurations, and racking systems. Optimising warehouse layout will significantly reduce travel time and increases operational efficiency, having a direct impact on cost management.
Labour Cost and Performance Management
Labour costs are always one of the biggest overheads in a warehouse and using a WMS helps food manufacturers to effectively plan for upcoming resource requirements, schedule shift allocations and monitor productivity levels. Management can identify when a team member would benefit from additional training, or where additional labour resources are needed to shift a backlog. A WMS makes it possible to introduce productivity leaderboards and track operator performance in a light-hearted way, linking throughput rates to remuneration levels and running competitions.
Partial Automation and IoT Integration
A warehouse controlled with WMS software is one stage in an integrated supply chain that provides end to end visibility of operations. Best of breed software features an open API and can integrate seamlessly with automation systems including carousels and conveyors, storage and retrieval systems, automated packing arms, driverless totes and trolleys and weighing devices. Data can be captured on the spot to provide real time management information with tight control and full visibility, giving food manufacturers a full audit trail and product traceability.
Food manufacturers have one of the most compelling business cases for investing in a WMS. Unlike some warehouses dealing only with finished goods, manufacturers have to manage raw material inventory and their end products. It requires a finely tuned operation and at a time when costs must be very carefully minimised, it is an essential raw ingredient. Rather than battling with paper processes in your food warehouse, isn’t it time you switched to a WMS?
There is an old saying that applies equally wherever in the world you are running a business. The customer is basically always right. Americans say the ‘Customer is King’ and in the UK, being slightly more reserved, we talk about being ‘Customer Driven’. Germany has a more direct translation, der Kunde ist König and in France, le client n’a jamais tort or ‘the customer is never wrong’ is the general maxim. Japan takes customer appreciation a step further with the motto okyakusama wa kamisama desu, which means ‘the customer is a god’.
Customers and their requirements need to be front and centre in the thoughts of every business decision, what happens in the warehouse is no exception. Customer centricity is so important that it is driving the priority metrics being used to measure warehouse performance. Recent research published in the Warehousing Education and Research Council (WERC) DC Measures Report 2023 highlighted that the top 4 metrics were directly related to customer satisfaction. It’s not surprising given how much more demanding customers have become as a result of e-commerce. Competing brands are only a click away, timeliness and convenience is everything.
What are the top DC metrics?
Putting customers first
Right at the top are metrics that directly relate to ensuring customer satisfaction. According to the report’s authors, these measures indicate a noticeable shift at the top of 2023’s rankings, demonstrating an increased laser focus on customers. The new top four are all customer-facing measures and represent the different dimensions of another well-known metric, the perfect order index. This is a score that many warehouses benchmark their performance against and it measures the four major components of a perfect order: delivering orders on-time, shipping them damage-free, complete and with correct documentation.
Typically companies with higher perfect order rates carry less inventory, experience shorter cash-to-cash cycle times, and have far fewer stockouts. Conversely imperfect orders lead to increased shipping labour costs, the need to provide replacement products, and lower revenue due to lost sales and customers.
Interestingly, being able to attain the perfect order index measure is only possible if the warehouse has full visibility of available stock and operational performance in real-time. This requires a level of automation that can be attained by implementing a warehouse management system (WMS) software solution. Using a WMS provides an instant overview of when orders were shipped against delivery targets and the immediate stock availability tracking functionality ensures that orders are either shipped complete, or customers are at least notified of any expected delays from the outset.
In a highly competitive e-commerce environment, where margins are ultra-thin and customers are swayed easily and free to shop around for alternatives, service is absolutely everything. The customer is always the king or König and any systems that can enable them to feel that way routinely when they buy from your company will help ensure your brand keeps its share of wallet and stays front of mind.
For more information about using a WMS to track key metrics in your warehouse, contact Indigo Software.
A few years ago, we wrote about the lack of women in supply chain and logistics roles. We are happy to report that this is changing rapidly. Recent research released by Gartner Inc. highlights how gender diversity in the supply chain has levelled and continues to do so, particularly in senior management. For instance, Gartner’s 2023 study found that 26% of supply chain C-suite roles are now held by women, up from 19% a year ago.
Across the entire supply chain workforce, women were found to make up 41% of individuals in employed positions, although the Gartner study also found that frontline roles still have some way to go. Only 31% of women are filling these roles, possibly because some environments, for instance warehouses, are seen as physically demanding and stereotypically male dominated.
Interestingly, the study also found that when an organisation had female representation at the senior executive level, this had a positive correlation with the number of female held roles throughout the rest of the organisation. Having female leadership can help create a culture that appeals to women and the organisation can then further benefit from the advantages that this diversity brings.
Gartner’s study found that workplace flexibility was the most effective way to attract and retain women to frontline roles. Another factor is inevitably the increased level of automation in warehouses today. Automation – with the use of conveyor systems, packing arms, voice assisted picking and mobile devices – has made working in such a physically demanding environment as an operative more feasible for a larger proportion of women and created new roles. Warehouse work used to involve a lot of heavy manual labour and could be quite a dangerous environment, but increased emphasis on health and safety plus the use of robotics and automation with software like a warehouse management system (WMS), has made it more appealing.
Warehouse software adoption has also opened up new career opportunities, for instance, in business intelligence and supply chain analytics. There is a mine of data being captured all the time in a warehouse and analytical tools are essential to transform this data into meaningful information. The supply chain analytics market is set to grow rapidly as a result of integrating multiple devices, through IoT, smart warehousing and AI tools, as well as emerging fields, such as 3D printing.
Now that more women are actively choosing to develop careers in the warehousing and supply chain industries, it’s worth reviewing how their specific skillsets are benefiting employers. Women often have many soft skills that make them ideally suited to working in warehouse management – a profession that requires high attention to detail and excellent communicators. They are often good at multi-tasking, innovative and creative, natural organisers and they tend to be very pragmatic about problem solving – all essential skills.
Overall, we are delighted to see women thriving in supply chain careers, the pattern very much reflects Indigo Software’s own gender diversity and we look forward to continuing this upwards trend.
A Warehouse Management System (WMS) is one of the most important investments your business can make. It helps to eliminate paper processes and will enhance efficiency and accuracy across the whole warehouse. Every process – from booking in stock and raw materials to moving it around the warehouse, picking items for production or for customer orders and management tasks like stock counting – can all be managed using a WMS. It will ensure that you are making the best use of your available warehouse space, that your warehousing operatives are working efficiently, and it provides real time information to management about how well the logistics operation is performing.
Selecting a WMS is an important decision, an automated WMS is a relatively costly investment, and your business will be relying on the software solution for many years. It is important to identify the best WMS fit for your business needs.
Do you need manual or automated systems for your warehouse?
Manual systems are very basic record keeping systems, for instance a spreadsheet could be defined as a manual and very rudimentary warehouse system, although it isn’t officially a ‘WMS’. Manual systems are suitable for businesses with very basic requirements that are willing to perform ongoing data entry manually and have limited reporting requirements. The information in a manual system will almost always be out of date, because of the time required to update transactions on an ongoing basis. 80% stock accuracy is the very best you can hope for with a manual system as any updates will need to be “keyed” and updated in the back office.
Automated systems can capture information at source using scanners and automatically update stock levels. Updates to an enterprise resource planning (ERP) system can either run as a batch process or, as is more common today, in real-time, as soon as a transaction is processed. Automated WMS systems can also direct a workflow for operatives using a labour or resource management module, include built in safety checks to minimise errors and can help to minimise costs by improving space utilisation. They can also be integrated with automated handling equipment, like conveyors and storage and retrieval systems.
How to evaluate a WMS vendor?
The first step in selecting a WMS is to understand your long-term warehouse management requirements and business goals. Then, create a shortlist of suitable vendors by requesting recommendations from other users. Research their product capabilities, service levels, specific in depth industry experience and reference sites. Ask the vendor to connect you with their existing customers and if possible, ask for a site visit.
How to evaluate a WMS
One of the most important attributes of a WMS is longevity. It needs to serve your needs for a long time and the potential for scaling the system as your business grows, and adding new features and capabilities to suit an evolving operation is essential. You may want to introduce some additional automation and have the WMS communicate in real-time with robotic arms for example, or an AGV (automated guided vehicle).
Identify whether the WMS you are considering offers the following characteristics:
- Scalable architecture that can accommodate additional server capacity and feature requirements;
- Extensible architecture that can accommodate custom development to suit specific process requirements and third party integrations;
- Industry specific compatibility is important for certain industry sectors, food manufacturing is a good example. Does the system support ASN (advance shipping notifications), lot and batch traceability and stock rotation;
- Integration capabilities are essential to enable your WMS to seamlessly exchange data with third party systems and visual reporting tools.
Above all, make sure you speak to existing users, visit their warehouse facilities and get an understanding of the way the vendor supports them. If they have been using the WMS for some time and maintain a good working relationship with the software vendor, you know they will be a long term technology partner and asset to your business.
When the topic of warehouse metrics comes up in discussions with customers, the one that is most frequently quoted as being the de facto performance yardstick is OTIF, ‘on time in full’. Our experience has shown that although OTIF is a useful measure, there are others that are equally, if not more important. This is because OTIF is an umbrella metric and underneath it lay many other sub-activities that will impact whether or not an acceptable rate can be achieved in your warehouse, as this article highlights.
Using a Warehouse Management System (WMS) software solution makes it easy to capture all the rich data that is constantly being generated in the warehouse and transform it into commercial information. Perhaps more importantly, information that can be used strategically to help improve business performance and profit margins. Over time, by measuring the right metrics, your business will also offer a better, faster service to customers and develop the reputation you have always wanted to achieve. Here are some of the most valuable metrics you can get from your WMS.
1. Average Dock to Stock time
Average Dock to Stock (ADS) is a very useful measurement that indicates how well stock is moving through the warehouse. It records how long it takes for stock items to arrive in the warehouse and then either be picked for an order, or moved about during cross docking process. ADS tells management when the items arrived on the loading bay and the point in time when the stock was available to the system (booked in) to be picked for an order or for cross docking. ADS is really important because there is no point having a system that allows stock to arrive in the warehouse only to experience a delay before it is available for sales orders. This is especially important for e-commerce businesses – the faster the booking in time the better and this is a metric that conveys that rate to warehouse managers.
2. Average Order to Dispatch Process time
Average Order to Dispatch Process (AODP) indicates the length of time that elapses between when an order is placed to the item(s) actually leaving the warehouse for the customer. Apart from improving efficiency levels and keeping customers happy, this metric is extremely important for warehouses with perishable items and it needs to be as low (in time) as possible.
3. Audit to Dispatch Process
Linked to Average Order to Dispatch measures is the Audit to Dispatch Process metric. This is relevant for warehouses employing stock rotation, date control and batch number monitoring. For instance, what process is followed when items first arrive into the warehouse if goods with a shorter expiry date are already available for shipping. Ideally you will be retaining the newer consignment and shipping out the older stocks if you are rotating stock levels properly.
The Audit to Dispatch Process also monitors when an order was placed plus when and where the items were released. For instance, was the stock released as part of a positive QA process? When was the stock made available and ultimately allocated to the orders? When was it released into the warehouse picking pool? When did people start picking it? And when did they finish picking it? When was it dispatched? When was it labelled for courier collection?
These time sensitive metrics are very significant for improving efficiency levels.
One reason why insights like these are so important is because they provide an understanding of how well operatives are prioritising workloads. Many warehouses that I have visited have operatives busy picking orders that because of a packing bench back-log will not be dispatched to customers on the same day. By examining the data you would be able to see that pickers should be deployed to the pack area for two hours to ensure that anything picked that day will be packed.
Overall Audit to Dispatch time also indicates how many open orders there are at any one time, how many orders or tasks are outstanding for the day and very importantly, whether there are orders overdue. By referring to the average pick time metric, it is possible to precisely calculate how long it would take to clear the audit pool and whether more resource is needed. It is a really key metric.
4. Warehouse occupancy levels
Another important metric given both the cost of warehousing space today and the intermittent supply disruption many businesses are facing is warehouse occupancy. This is an important metric because it highlights how much storage space is available and whether it would be possible to store excess inventory if needed. For instance, there may be 10,000 available locations in the warehouse and only 83% of them are fully utilised.
5. Perpetual inventory / inventory accuracy reporting
Inventory accuracy is a huge topic and worthy of a blog in its own right but we will touch on it here. Shrinkage is an ongoing problem in many warehouses and how closely the actual inventory numbers tally with what the business thinks it has in stock at any time is a very critical metric. Having an accurate inventory management process will avoid a lot of time spent on distressed counting and it eliminates the need for four walls counts. Implementing perpetual inventory management is one of the best ways to achieve this and in addition to minimising shrinkage, it also means replenishment processes can be synchronised with the picking cycle. There is no point having 50 pickers working on orders if every time they go to a location they have to stop and wait for the stock to be replenished for their order pick. It is a very common issue in warehouses and can account for a lot of time wasted by operatives.
By highlighting these different metrics, it becomes clear why OTIF cannot be the only measure to use when looking at the performance of a warehouse operation. It is basically an umbrella term and it is impossible to achieve a good OTIF rate if the underlying processes are not as efficient as they could be. Using a best of breed WMS, it becomes easy to drill down and separate the raw data from real information that can influence business performance.
SME manufacturing, logistics and retail businesses are the backbone of the UK’s economy and in the current challenging economic climate, finding ways to reap the benefits of warehouse automation in a cost-efficient way is an imperative.
That is why Indigo Software is dedicated to helping the country’s SMEs understand how to ease the challenges resulting from higher inflation, disrupted raw material availability, labour shortages and higher energy prices. Add into the mix increased demand for warehouse space and higher salary expectations for operatives and it is a perfect storm for warehouse managers to overcome. A WMS could provide many of the answers to common problems for companies for whom full automation with robotics is out of reach financially.
Indigo’s supply chain consultants can highlight the easiest and most cost effective ways of introducing automation into your warehouse, using either our flagship Indigo WMS or a new, rapid ROI solution, Indigo QuickStart.
4 benefits of using a WMS
Here are 4 areas where the benefits of using Indigo’s WMS solutions really shine:
1. Automated stock management
Rising prices and property shortages mean warehouse space has become more expensive. As a best of breed solution, Indigo WMS can help you make more efficient use of your warehousing, with 20-30% savings possible. For example, Indigo WMS automates put-away to maximise space utilisation, identifying the best places to store items based on available spaces, monitoring how frequently items will be picked and where they should be placed in the warehouse, and whether items need special storage considerations.
2. Automate stock counting
Shrinkage can be a real problem in warehouses but completing a regular stock count is effectively dead time that could be better spent elsewhere. Counting as you go, known as perpetual inventory management, ensures that any stock discrepancies are found far quicker than would be the case in a four walls count. The WMS takes care of everything, by tracking likely stock requirements based on historical ordering patterns and automating the replenishment reminders.
3. Automate routine and repetitive tasks
Automating routine and repetitive processes in the warehouse helps to minimise the impact of labour shortages and higher wage costs. Employees can frequently represent up to 50% of warehousing costs and using a WMS from Indigo will mitigate the impact of human errors, plus optimise resource utilisation. The potential savings can be very significant.
4. Integrating Processes
A lack of integration between technology employed and processes creates hidden costs which become magnified when inflation is increasing. It can also compromise the quality of data, which in turn negatively impacts sales order entry, planning, production, and customer satisfaction.
“Ultimately, a WMS cannot completely shield your business from a difficult economic environment, but it can most definitely provide a high level of insulation. Indigo WMS can help you become super canny about minimising costs, so that your resources can stretch further and profits are less impacted,” says Eric Carter, Solutions Architect at Indigo Software.