For a Warehouse Management System (WMS), all gains start at Inventory Control. The premise being that the physical inventory is located where the system says it is. The company wants a system to ensure at the bin level inventory levels achieve 98.9% or greater accuracy. Therefore, the system must have the following features:
- Online/Real Time data management using radio frequency based devices and scanning in order to collect the inventory/location data when confirmed by the user
- Real Time reporting of the transactions and location inventory values
- Cycle Counting to continuously count the inventory to measure the accuracy of the location inventory and make adjustments to the inventory given errors occur.
Given the overall budget for the warehouse, bin levels that reach 99% accuracy can have up to a 3% return on investment. The main areas impacted will be picking and packing orders. If the inventory is where it should be, pickers are apt not to lose productivity hunting down inventory for the order, and packers typically and checking/packing more accurately picked orders.
Highly accurate locations typically results in the company foregoing an annual physical inventory, saving on non-productive wages and operational overhead.
Return on Investment Checkpoint: Inventory Control does not constitute a true WMS
Inventory control can be provided by automated data collect systems so beware of ADC vendors branding as WMS providers. Further, understand that these systems are often overlays of the ERP database and can only be as responsive as the ERP. Latency, or unresponsiveness HURTS any gains made in inventory accuracy. Also, ensure the solution has cycle counting capabilities. Without it, you lack real inventory control. A lack in the highest inventory control typically equates to a decrease in profitability for your company. Stay competitive and profitable by selecting a “best in breed” warehouse management system.
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