There are many reasons – trigger points – influencing why and when a company would want to implement a Warehouse Management System WMS. It is a big decision and it often occurs at a critical phase in the business’s lifecycle.
In some organisations, the trigger may be driven by the arrival of a new customer. It may be driven by the desire for real-time information, or simply because the company cannot cope with order fulfilment demand. This article explores the primary scenarios that typically trigger WMS investment, to help warehouse managers recognise when it’s the right time to make this technological leap.
Trigger 1 – New warehouse operation
One of the most straightforward triggers for a new WMS implementation occurs when the business opens a brand-new warehouse or logistics operation. In these instances, the warehouse management recognise the clear value of embedding automation technology from day one. This decision will be made on the understanding that modern warehouses require sophisticated technology systems to operate competitively and efficiently. In an already established business, a new site creates the perfect opportunity to retrain existing warehouse employees on a new system and optimise processes from the outset. Detailed operational efficiency and accuracy metrics can be established and monitored from day one, further enhancing management information. And future scalability is built into the warehouse, with robust systems in place that can be expanded as the business grows.
Trigger 2 – Outgrowing manual systems
There is only so far you can take a business whose warehouse is run on paper and spreadsheets. Many warehouses reach a tipping point where these manual systems become unsustainable if the business is to keep its customers happy. This critical stage in development typically manifests through the following issues:
- Increasing error rates in order fulfilment – wrong items and quantities being picked resulting in greater numbers of returns;
- Growing delays in order processing – booking new inventory in and moving sales orders through the warehouse causing bottlenecks;
- Difficulty maintaining accurate inventory counts – information lags on the system mean there is never a true record of actual stock availability;
- Rising labour costs due to inefficient processes – having to recruit temps to cope with busy periods or clear backlogs and a general inability to scale operations effectively;
- Limited visibility across operations – an over reliance on Excel spreadsheets or other islands of data.
When these signs emerge, they clearly indicate that the operation has outgrown its manual systems and needs to evolve technologically to remain competitive.
Trigger 3 – Organisational restructuring
Corporate changes within a business will often influence the adoption of a WMS solution as a company finds it needs to standardise operations across multiple sites and bring each division into line. Common triggers in this scenario are company mergers or acquisitions and business restructuring. This process can involve integrating multiple warehouses, with each site adopting new, standardised processes, unified reporting systems and consistent performance metrics. A WMS will facilitate each operation having a unified mode of operating and provide many other benefits in addition. This will make it easier for the business to continue scaling into the future following more acquisitions and new sites being launched.
Trigger 4 – Customer-driven requirements
New business opportunities increasingly come with specific technological requirements, especially if the customer is operating in a highly regulated industry. This was the investment scenario at VH Logistics, the new 3PL arm of hamper specialist, Virginia Haywood. In order to compete effectively with other 3PL providers and attract big brand customers, VH Logistics needed to invest in its warehouse technology infrastructure. This would provide customers with real-time data visibility and remove any inefficiencies across warehouse operations created by a reliance on paper-based and manual systems. In addition, to secure a new contract with one of the country’s leading dairy producers, it required very accurate lot traceability, stock rotation and allergen management in a highly controlled warehouse environment. This could only be offered through a WMS.
Trigger 5 – Current system limitations
Many organisations find themselves constrained by restrictions present in their existing systems, especially when legacy systems lack modern warehouse management functionality. In some cases, the incumbent solution can’t cope with growing sales operation volumes, or system performance speeds are dropping due to increasing order loads. These limitations can often become apparent when customer satisfaction levels are impacted, orders cannot be processed on time and reporting capabilities are not detailed enough.
Trigger 6 – Integration and real-time updates
The most common trigger for implementing a WMS system is when the business recognises a need for a unified, real-time view of warehouse operations. In this scenario, the business will often be struggling to navigate multiple disconnected systems, inconsistent information across platforms and time consuming, manual data entry. A best of breed WMS addresses these challenges by providing a single source of up to the second data through automated data capture, integrated reporting and seamless system communications.
Conclusion
The decision to invest in a WMS represents a significant step forward in any warehouse operation’s evolution. Whilst the exact triggers may vary, the end goal remains consistent. A WMS will bring improved operational efficiency, accuracy, and customer satisfaction plus it will prepare the business for sustainable long-term growth.
By recognising these different trigger points early, organisations can plan their WMS implementations strategically rather than reactively, ensuring better financial outcomes and a rapid return on investment, all these things will help drive positive business outcomes.
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