Issue Date: 10 April 2019
Ref: PSK19/03
Stock Distress Signals - 23 Pointers That Tell You Why You Need A WMS
By Alex Mills, Sales and Marketing Director at ProSKU
Warehouse management systems (WMS) are used widely in larger organisations where stock and order volumes demand high levels of control. Smaller companies, although they hold less stock and handle fewer orders, mostly experience the same problems when handling physical stock. But smaller companies tend, initially at least, to use products designed for stock control or inventory management. These are often modules provided as part of accounts or order processing systems.
These solutions can be OK for businesses with smaller stock quantities and order volumes where physical stock is easy to manage. However, as the business expands it becomes riskier to rely on this type of system. If a business needs absolute stock accuracy it is going to need a system that controls stock in the ‘physical’ sense, or at least to be integrated with one that does. In addition to knowing how much stock the business has this can also mean, for example, where it is located, whether it is accessible, how old it is, its weight and size, and so on. This is one reason why larger companies almost always consider a WMS to be essential.
There are common misconceptions about what a WMS does. Some smaller companies believe their inventory management systems do the same thing. In reality these applications usually fall far short of full WMS functionality. Surprisingly, some people are still unaware that there is software designed to deal specifically with the problems of physical storage. As a result, many companies just continue to expand their business while enduring problems that the right systems could easily rectify. This causes reduced efficiency, repeated errors and inaccurate stock information which can affect quality of service, customer retention and overall profitability. Perhaps the least acceptable situation is the practice of ‘throwing in bodies’. In some operations have seen, rather than address the root problems of an error-prone, inefficient and overstretched operation the response is to simply add more labour and increase business costs!
Now that cloud-hosted, subscription-based systems like ProSKU are available there are few reasons not to use an intelligent solution to tackle these problems. The monthly cost is likely to be minimal compared with total labour and operating expenses, and will pay for itself rapidly in all but the smallest operations. And with the benefit of open APIs, integration with existing solutions to capture orders and provide accurate real time stock data is quick and easy to put in place.
The following list contains some common problem scenarios that should tell – if a business has not already done so – that it is time to look at a WMS!
Problems at Goods Intake
1 Time taken to process a goods receipt: is this a time consuming process which could be more streamlined and efficient?
2 Errors in receipt data capture leading to problems: are your data capture methods letting you down and causing knock-on issues?
3 Too many manual systems or software applications to update: are you too reliant on written records or updating multiple systems by double-keying?
4 Receipt operations too labour/process intensive: does this involve more people and processes than necessary, leading to wasted time?
5 Time wasted looking for space for goods at receipt: do your receivers waste time trying to find suitable space to place incoming goods?
6 Incorrectly located goods at putaway: is stock being incorrectly allocated at putaway causing later problems?
Stock Management Problems
7 Problems with space optimisation: is it difficult to optimise available space because of poor location management?
8 Cannot adjust stock at location level – only numeric totals: is it difficult to adjust stock correctly, causing inaccurate figures?
9 Poor traceability of adjusted stock: is it difficult to maintain records of adjusted stock, causing unexplained stock write-offs?
10 Poor traceability of transferred stock: can you transfer stock easily and maintain full traceability?
Picking and Despatch Problems
11 Stock not in correct location for picking: do your pickers waste time looking for items to pick?
12 Lost and insufficient stock: are you failing to fulfil orders because you cannot find stock?
13 Relying on specific staff knowledge: do you depend on key staff do know where your stock is?
14 No automated rotation control: do you pick short-dated or out-of-sequence stock?
15 Batch and serial number tracking: can you record batch and serial numbered stock?
16 Incorrect stock being picked – poor verification process: are you failing to catch pick errors at the right time?
17 Errors in despatch – inadequate checking process: are you failing to stop incorrect orders being despatched?
18 Incorrect/insufficient picking options for your business: does your present system provide ways to pick stock for maximum efficiency?
20 Too much reliance on paper documentation: do you still use paper lists to manage picking?
21 Management and supervisory time spent on error resolution: are senior personnel spending costly time sorting out errors and issues?
22 Real time information shared with sales systems not accurate: is the stock information you share with other systems always accurate?
23 Poor stock movement traceability: do you have accurate historical records of all stock movements?