Can a Warehouse Management System Fix Your Inventory Accuracy?

A warehouse management system may seem like a panacea to a lot of problems, but they can’t fix anything. They can’t fix your inventory management issues, or solve your accuracy problems, or make shipments take less time.

Not until you have done two important steps:

1. Changed your organizational behaviors.
2. Reviewed, validated, and changed all processes related to your warehouse and production.

If you want to have a properly working warehouse management system (WMS), you first need to change the behaviors of the organization. That starts with a wall-to-wall inventory check every 30 days. It means getting an inventory accuracy —by line item, not by dollars — in excess of 95%, and maintaining that for 12 months.

That will tell you that you’ve established this practice as a positive organizational behavior. And it will prove you can handle a WMS as a company, and that you’re able to do what needs to be done to make it run properly.

A warehouse management system is only a tool, not a magic bullet. It is only as good as the people who operate it. And if the people who operate it aren’t very efficient or following their company’s best practices, the WMS won’t fix those problems, they’ll only help you make them faster.

Why Can’t a Warehouse Management System Fix Inventory Problems?

A WMS is automatic. Everything runs off bar codes or even RFID tags, which makes it possible to go paperless, but it also makes keeping track of everything so much more important. You can track products as they come into your facility and through your facility, as well as when you ship them out to help ensure consistency throughout your entire operation. If steps are missed or forgotten, the results can be expensive

For example, if you produce 100 widgets, and you don’t have timely reporting that you produced them, your finished goods inventory won’t be accurate. Not only will you have 100 items less in raw material, but you won’t show the 100 items that are finished in your finished goods, and that will mess up your entire buying cycle.

Or, if you produce the 100 widgets, but 10 of them are rejects and you didn’t report it accurately, your finished goods inventory will show 10 more units in place that should not be shipped, and you’ll either “run out” sooner, and you’ll end up sending defective items to your customers, and they won’t be happy.

Additionally, reporting needs to be done on a minute-by-minute basis, so your customer service and ordering department will know the status of your various products. If they can’t keep up with that information, they won’t have accurate information to relay to customers when they call in with questions or to place orders.

A good WMS will also speak to your ecommerce system and keep your website inventory up to date. That way, a web visitor will know you have a product available so they can order it, rather than getting the dreaded “out of inventory” email two days later after you realize your mistake. Instead, your website will not only show the out of inventory products right away, it could even recommend available alternatives, or offer a new fulfillment date.

A warehouse management system can cover thousands of transactions in a manufacturing operation or warehouse every day, which makes it an important and valuable tool in managing your resources and productivity. But just like tools don’t make the carpenter, the warehouse management system does not make a company efficient. That requires a commitment to accuracy and consistency. And if you can manage that, then your operation is ready for a warehouse management system.

I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business. If you would like more information, please visit my website and connect with me on Twitter or LinkedIn.

Photo credit: CTsabre14 (Wikimedia Commons, Creative Commons 3.0