Selecting the right warehouse management system for your small business can have a tremendous positive impact on the bottom line so it’s important to have an idea of the goals you’re planning to accomplish with a WMS and the specific functionality you’ll need to achieve those goals before speaking with vendors.
What is a WMS?
A warehouse management system is a software application designed to support and optimize warehouse functionality and distribution center management.
Why do you need a WMS for Small Business?
A WMS can help a small business by lowering costs, increasing profits, increasing efficiency and improving productivity across various areas of manufacturing and warehousing. Many business owners that begin using a WMS don’t realize all the potential benefits and start with just one area of need, such as the ability to track and forecast accurate inventories for optimizing sales. The benefits, however, go far beyond inventory and forecasting.
When integrated closely with a company’s ERP software, a WMS can track sales, production and inventory accuracy, order processing, shipping, returns, service and support, product costs, employee hours, rates and performance, work-in-process, under-order and over-order levels, warehouse health, productivity, forecast accuracy, inventory turns, labor costs, and more. Warehouse management systems can also optimize and even automate the physical process of receiving, storing, and dispatching goods.
By improving efficiency, WMS for small businesses can reduce the number of employees needed. Fewer people then translates into lower staffing costs.
The answer is to use a WMS for Small Business Data.
How Does WMS for Small Business Data Work?
A WMS collects and stores warehouse data in its database. The data is available anytime, anywhere – even from outside the facility – enabling real-time insight and analysis into what’s happening on the floor, in the warehouse, and at the sales counter.
A WMS for small businesses typically consists of two major components: the warehouse management software and data connectivity.
The warehouse management software is installed on a computer or thin client within the warehouse. The software is loaded with modules and interfaces to the warehouse and/or ERP software, producing the data that WMS systems collect and store.
Data connectivity is an interface installed in the warehouse, which stores the data collected by the warehouse management software and connects directly to cloud-based applications and analytics that can analyze the data to provide insight.
The system is like a “push” data collection system. With a WMS for small businesses, data is collected and stored in real-time in one central location, then pushed-out to cloud-based applications where the user can manipulate the data for powerful analytics.
WMS For Small Business Data is used to analyze:
- Financial forecasts
- Inventory levels
- Sales and labor performance
- Purchasing and sourcing
The data collected by the WMS for small businesses generated by these applications is available and accessible anytime, anywhere – even from outside the facility – for real-time insight and analysis into what’s happening on the floor, in the warehouse, and at the sales counter.
This powerful capability is one of the primary reasons more small businesses are making the shift to WMS for their data warehouse.
WMS For Small Business Data Issues
Data accuracy. Too often, data is collected but not loaded into a warehouse management system, ERP, or written into a report or sent to an analytics application.
Paperwork. Not only is paperwork inefficient, it’s susceptible to human error. Paperwork is also subject to misplacement in a warehouse and can be lost.
No communication. Data is isolated in a warehouse management system, ERP, or an analytics application.
Distance from the sales counter. It is best to have an office close to the floor to collect and verify inputs, perform stock checks and stock transfers, purchase, receive, and dispatch materials.
Data Overload. Data collected at the warehouse flows to multiple departments that may be using different types of software. The result is that data is siloed and becomes inaccessible.
Production keeping – missing parts. Companies still rely on paper for production keeping, which increases the possibility of missing parts.
Also, the greater the number of data sources used in a warehouse management environment, the harder it is to extract the most relevant information for analysis.
Choosing the right WMS for Small Business
When preparing a small business for the purchase of a WMS, some questions to consider are:
- What type of WMS will you need? An EPOS (electronic point of sale) system for a retail business or a warehouse management system (WMS) for a warehouse business.
- What type of data will the WMS collect? What about the data collected from mobile devices?
- What WMS will provide quick access to historical sales and inventory levels?
- What is an acceptable level of performance?
It is also important to choose a WMS that will accept data from a wide variety of connections. Most WMS systems can be configured to accept data from a variety of sources, including:
- 3PL data
- ERP data
- Mobile devices
- EDI data
- HEDI data
In order to make an intelligent WMS purchase, it is advisable to contact a vendor during the planning stages to understand the following:
- How the WMS will integrate with an ERP system
- What kind of data is inputted and what kind of data is outputted
- Will the WMS be integrated with other warehouse management systems
- Will the WMS fit the management’s vision of the system
Benefits of WMS for Small Business
As the use of WMS for small businesses becomes more effective and efficient, warehouse owners are realizing that it pays to improve the efficiency of your distribution center with hardware upgrades and warehouse management system.
By doing this, productivity can be improved along with service and support.
When purchasing a warehouse management system for small business, there are some things to remember:
All applications process data differently and not all WMS systems can see or collect the data needed for all applications – therefore the ability to collect and normalize fragmented data is critical
Be sure the vendor will send WMS personnel to work with you to integrate the system into your existing environment
Take advantage of the vendor’s support services
Make sure the vendor deals with access, connectivity, and security issues
Make sure the vendor deals with security issues raised by your privacy officer
Plan on a six to 18 month period to implement the system
Be sure the vendor will train you and your staff
Make sure the vendor will give you a technical reference to work with
Understand that once the WMS is installed, it will likely need adjusting, which is why it is important to work with the vendor during the implementation process
Remember that data collected by a WMS in one location is accessible by multiple applications – but this also means that people have the capacity to view the data in real time by logging into the application.
Be aware of the vendor’s support and service
When choosing your WMS for small business, consider these five issues:
- Total Cost of Ownership (TCO) – not only up-front cost, but also maintenance and support.
- Processing Rate – how quickly data is pushed-out from the WMS to the cloud-based applications.
- Scalability – a WMS system should be scalable and both large and small businesses should have the flexibility to grow as fast or as slow as they want to.
- System Flexibility – how easily the system can be integrated with existing software and hardware.
- System Transparency – how easy it is to install, configure, and set-up.
Although a WMS is an investment, it will provide companies with the ability to drill down and extract meaningful information that can be used to increase sales and lower inventory levels, resulting in higher profits.
Software or Hardware?
So, if a WMS is so great why aren’t more small businesses investing in it?
Small businesses that do not have experience with WMS for data often question whether it’s better to invest in a software or hardware solution. Software has the advantage of being able to handle data from many different sources and solve small business problems, but a hardware WMS will function faster and provide much more flexibility than most software systems can.
In the age of big data, it is highly recommended to invest in a hardware solution.
Choose the Right WMS for Small Business – To minimize your risks
Some ideas to consider:
- Be sure to check out the sample plans supplied by the WMS vendor
- The actual data the WMS uses and the users who access the system are important
- A WMS vendor should be able to show the company where it will improve their business
- Take time to learn about the configuration and see what you can do with the solution
If the vendor is claiming it can do more than a prospective customer’s other vendors, and it is too good to be true, it likely is
It is imperative to research the vendor’s implementation process as it will affect how quickly data can be integrated with the rest of the company’s solution
When working with the vendor, look for the following: stability – Check reviews and customers who have experience with the vendor.
– Check reviews and customers who have experience with the vendor. ease of use – The design should be simple, reliable, and straightforward.
– The design should be simple, reliable, and straightforward. flexibility – It should be easily integrated with existing technology and be able to handle multiple workloads.
– It should be easily integrated with existing technology and be able to handle multiple workloads. price – It should be competitive with other similar vendors.
Remember, just because a WMS is less expensive than the competition, does not mean it’s a better solution.
Choosing a WMS For Small Business that is flexible
Choose a WMS that is scalable – Scalability is important because a small business does not know what its needs will be five years from now. It is important to be able to add functionality to the WMS and later separate one application from another as the business grows.
If you are preparing for long-term growth, consider purchasing an SAP warehouse management system as they offer specific features and functions and are highly configurable.
Choose a portable and open solution – a WMS should be open and be able to handle multiple workloads. The solution should be structured in a structure that is not dependent on the software version. This will allow you to make upgrades, add resources, change hardware and move the solution to another server.
Data Flexibility – The purpose of the WMS is to pull together data from many sources and deliver it to applications. This data must be delivered in a repeatable, consistent and predictable manner. The data must be filtered to be formatted and normalized.
Ready to embark on your journey with a wide-area WMS
If you choose a wide-area system, the vendor should offer a solution that can handle disparate data sources and provide a high degree of flexibility. The vendor should also provide training in order to ensure that the WMS will work well with the company’s existing infrastructure.
Alternatives to Warehouse Management Software Systems for Small Businesses
There are several alternatives to WMS for small business.
The alternatives include:
- Manually entering data into a spreadsheet
- Counting inventory on a regular basis and updating spreadsheets
- Issuing paper work orders to manually store inventory
- The benefits of using an ERP system to manage inventory and productivity include:
- Improved accuracy result in decreased stock-outs and missed shipments
- Increased sales through accurate ordering based on product demand
- Better service to your customers because orders are filled with the best products at a time of their choosing
- Increased productivity because employees can spend more time performing the work that contributes to business growth (e.g. loading and shipping)
- Improved accuracy eliminates the need to spend time manually entering data
- Upgraded functionality because of the ability to connect to web-based applications
- When choosing a WMS for small business, keep these things in mind.
- Inventory Control Systems Conserve Time
To improve efficiency, save time and improve performance you need a Warehouse Management System (WMS).
To prepare for the future, you need to manage inventory.
To inventory, you have to count and to count you need a warehouse management system.
To control your warehouse and stock you need a warehouse management system.
What You Need to Know for a Better Inventory System
The average person spends two to three hours a day managing inventory. This includes on-hand inventory, quantity counts, shipping and receiving of inventory, updating contact records and other activities. This translates into a significant number of hours spent on inventory tasks each week.
An on-hand inventory process is critical to helping a small business reduce costs and ensure profitability. A WMS ensures that inventory is counted on a regular basis and that necessary adjustments are made.
A WMS also helps minimize the time an employee spends on inventory by ensuring that data is accurately entered into the system.
For example, a small business signs a contract with a vendor who requires the seller to provide the supplier with an on-hand quantity of each of its products. A WMS automatically updates the inventory. All small businesses should use a system that automatically, without human intervention, updates inventory levels.
A WMS creates short-term benefits. Before the system is implemented, the small business has problems counting inventory. Then, the inventory data is manually entered into a spreadsheet, which takes time away from other parts of the business.
After implementing the system, employees are able to focus on other company tasks. The system will be maintained by the WMS vendor, which reduces the amount of time management has to spend on such tasks as stock-outs.
A minimal investment also brings long-term benefits ranging from increased warehouse efficiency to a reduction in shrinkage.
There are many benefits to using a WMS for your small business.
Reduced costs – a WMS saves time, reduces errors and lowers costs. By reducing the amount of time employees spend on inventory, WMS will increase productivity and reduce the amount of money that is spent.
– a WMS saves time, reduces errors and lowers costs. By reducing the amount of time employees spend on inventory, WMS will increase productivity and reduce the amount of money that is spent. Increased profits – a WMS reduces costs and improve inventory control. Increased inventory accuracy and control create higher profits for the business.
– a WMS reduces costs and improve inventory control. Increased inventory accuracy and control create higher profits for the business. Increased customer satisfaction – WMS helps save time and provides quick fulfillment to customers, which improves customer satisfaction.
In the age of data, there are few businesses that do not have an inventory management system.
Combining a WMS with ERP system allows a small business to streamline inventory and financial processes.
To quote one executive, “time is money and we put ourselves out there. We are willing to take the time to go through the process. It is worth it. We save time and the bottom line is we make money by being efficient.”