Warehouse Management Systems are becoming popular as supply chain logistics become ever more complicated along with increasing customer demands. With an escalating volume of inventory movement, many organizations are turning to technology to streamline operations and meet these challenges.
Advanced technology through Warehouse Management Systems (WMS) allow companies to respond to evolving market pressures and deliver on ever-shrinking time to delivery windows. These systems efficiently capture every scan, every movement of inventory and are designed to make both accuracy along with cost reduction a top priority. The following article can give you some insight into methods, obtained through warehouse technology, for achieving better warehouse management that are key to modern business supply chain logistics in addition to reaching your organization’s goals.
Warehouse Management Systems are designed with savings in mind to manage your inventory in the most efficient manner possible. However, additional benefits can be recognized in other areas, such as cost saving associated with reduced labor and administrative costs, plus also an increase in customer service levels. Another area as well includes both efficiency gains and reduced cost is in the area of better space management for your warehouse.
Consider the following. Can you eliminate or minimize the need for outside storage? If so, you have the direct savings of reducing lease cost (normally on a $ per sq. ft basis), insurance, and possibly transportation costs. Depending on the size, complexity and activity of the off-site storage, you may even be able to save labor costs associated with managing and transporting the inventory back and forth. Improvements in space utilization generally range from 5-15%.
A Warehouse Management System (WMS) tracks every location and knows where each product and quantity received should be stored. Put-away can be directed to maximize space utilization, minimize put-away travel, minimize pick travel, or some combination. The WMS knows the size and weight of each item, case and pallet, and the physical constraints of each location.
Material is placed in an appropriate location based on these criteria and other pre-configured put-a-way rules pertaining to forward pick location replenishment, product velocity, storage requirements, etc. Space utilization improvements are generally step functions. In a typical situation where the distribution infrastructure is owned, the creation of empty space in the warehouse produces no real benefit. The amount of space made available must be enough to provide for other activities.
For instance, if 500 ft2 are freed up, this will provide very little benefit. If, however, 5,000 ft2 becomes available, several alternatives can be presented for the new space. For internal space savings, if enough space is made available to avoid new construction expansion or a green field site, this can be directly qualified as a cost avoidance.
Another example to consider is, if enough new space is now available to be used for light manufacturing, value added services, offices, etc.; this can be classified as a savings. If the new space can be subleased, this can also be classified as an incremental cash inflow. However, you must also consider the potential cost of refurbishing the facility as required by the potential tenant. Additionally, location utilization is improved by using a WMS. A non-automated operation is generally considered at capacity when 80% of the locations are being used at any given time.
A new result is through WMS technology, operating capacity can be dramatically increased. This improvement is due primarily to the WMS’s ability to continually manage inventory consolidations, re-warehousing activities, and mixed item locations.
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Posted by iCepts Technology Group, Inc a HighJump WMS Partner in Pennsylvania
