In recent years, the rise in use of warehouse management systems across the manufacturing industry has been significant, but there are still a number of companies that haven’t made that switch. And while there may be perfectly good reasons for that lack of change, experts still say the decision is likely to be a costly one until a switch is made. As such, it’s important for entrepreneurs or managers whose companies haven’t adopted WMS to review the reasons why these systems are such a good idea for their businesses.
Operating a warehouse in the first place isn’t exactly a low-cost proposition for manufacturers, according to a report from Innovation Enterprise. Consequently, any efforts made to more efficiently manage how those warehouses operate is inherently going to reduce overhead costs for a manufacturer, potentially by a significant amount. But when making the decision to upgrade how these facilities are run with WMS, there are still some things to consider.
Where does WMS help?
The areas in which use of a warehouse management system are good for manufacturers relate to equipment and workers, the report said. This can help determine where costs are perhaps greater than they need to be, and therefore where efforts to streamline the process can be crucial. For instance, companies spending more on shipping costs than the approximate industry standard of 60 percent of logistical expenses may find reason to figure out why that’s happening, and work to fix the problem.
Use of a warehouse management system can also help to curtail labor costs that exceed expectations, reduce late deliveries, spot accounting errors, and, perhaps most important, give companies a better handle on their inventory, the report said. All of this can be a boon to a manufacturer’s bottom line if implemented correctly.
Even beyond that, WMS can also be helpful when it comes to other aspects of a company, according to Jobs and Hire. In some cases, it can be a way to measure employee efficiency and identify potential weak spots in the process of getting the job done right. Along similar lines, it may be able to spot times during which theft or loss is more likely to occur, so employees can be more vigilant about why that might be happening.
In addition, though, because so many other companies in the manufacturing industry now use WMS, to some extent adoption at this stage is simply keeping up with the Jonses, the report said. By making this investment as soon as possible, companies will be able to position themselves well for the future.
Indeed, manufacturers that have yet to make the switch may be worried about the cost, but this is really the kind of investment that pays for itself over time. WMS can end up being a significant money-saver simply by making a company run more efficiently than it could with manual tracking of operations
For more information on warehouse management systems, please take the time to read our white paper on the subject, “Warehouse Management for Microsoft Dynamics NAV.”