4 Prerequisites for Ecommerce Companies to Maximize WMS Benefits

A warehouse management system (WMS) by itself doesn’t bring the high benefits of improved labor productivity and inventory tracking in the fulfillment center. Many small-to-medium ecommerce companies do not have in place four foundational prerequisites that would allow the high benefits to be achieved. Simply dropping a WMS on top of a paper-based fulfillment environment does not work and is a waste of money.

Recently we worked with a multichannel ecommerce company with sales of $46 million. The assignment was to plan out the process for WMS implementation. Like many smaller companies it had grown steadily without investing in technology, using an accounting system for fulfillment by keying in new product to track inventory. Orders and returns were processed, and inventory was released at shipping.

The fulfillment staff knew where each of the 5,000 SKUs was located, but if changes were made, chaos ruled. Inventory accuracy was 95% at best. The only use of barcodes and scanning was in outbound shipping via UPS.

Management felt sales could be doubled in three years. The four-fold objectives for the multi-year WMS project were to:

  • Accurately track all products, orders and returns
  • Reach 99%+ inventory accuracy
  • Eliminate paperwork errors
  • Tap into detailed operational data to manage the fulfillment center, especially labor

Since there was a lack of technology, there were four foundational prerequisites to making full use of WMS functionality. Vendors will have these prerequisites as part of their implementation and system offering. The emphasis here is, as you plan out your project, leverage these prerequisites to ensure a fully operational WMS that gives you the full range of benefits.

The four foundations are:

  • Aisle mapping and barcode labeling of all zones, aisles, levels and bin and slot locations.
  • Appropriate scanning technology and wireless access points (WAP) to collect data online and in real time
  • Barcoding of all products, largely through vendor source labeling and some internal labeling
  • Barcode-based process changes to dramatically increase accuracy and speed

Building the WMS foundation

Aisle Mapping and Barcodes

This is essential to many WMS functions, allowing you to implement scanning technology and move away from paper-based processes for inventory location control. It also lets you scan products for put away, replenishment, picking and returns processing.

In the client example above, the company will be able to pick by bin/slot location instead of its old paper-based system that relied on tribal knowledge. Once the WMS is operational, it will be important to optimize the pick path to gain many of productivity benefits, including revisiting product slotting. Mapping out bin/slot locations, setting aisle marking schema and physical labeling will take planning and effort.

Implement Product Labeling

Barcode labeling at the SKU level is crucial to utilizing a WMS, including the ability to identify product and scan transactions throughout the fulfillment process. It significantly reduces errors in reading units of measure for eaches, inner packs and cases and in picking or replenishing, avoiding costly mistakes.

When scanning products during cycle counts and physical inventories, barcode labeling speeds up the process and minimizes human errors. Many products are now source labeled by the manufacturer or distributor, but most companies have some SKUs that require internal labeling. Product labeling is a new discipline in fulfillment centers that have not done barcode scanning.

Automated Data Capture and Wireless Technology

Voice, pick-to-light and put-to-light systems, laser scanners, vehicle-mounted terminals, tablet and smart phone scanners and wearable computers are all automated data capture tools. This technology allows you to collect data throughout the FC and feed it into the WMS. 

Implement Barcode-Based Process Changes

The objective here is to eliminate manual data recording the WMS. Paper-based systems are error prone and have low productivity. Using barcode scanning in receiving, put away, replenishment, picking, packing, DC inventory control, shipping and returns squeezes out errors, speeds up the process and makes high inventory accuracy possible.

A WMS helps standardize processes and reduce training time. Unlike paper-based systems with manual entries and delays, details are viewable online and in real time.

One More Step: Implement ASNs

Companies can certainly get major benefits from a WMS without adopting Advanced Shipping Notices (ASNs), but they gain much more by being able to accurately receive and mark inbound products. If you get the fulfillment process started error free in receiving and labeling, you eliminate confusion and errors down the line.

Tying shipment data to the ASN purchase order data give you benefits such as eliminating unit of measure errors which are highlighted as well as better management of under/over receiving counts and partial receipts. Inbound visibility to receipts from manufacturers allows dock scheduling of trucks and labor. The timeliness and accuracy of data carries over into matching of purchase orders and invoices.

A WMS can bring big benefits to most ecommerce companies, but you must set up these foundational prerequisites to truly unlock the full value of your new system investment.

Brian Barry is President of F. Curtis Barry & Company

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