How to Build an ROI Case for a New Warehouse Management System

Warehouses are a vital part of so many enterprises and play an important role in the economy as a whole. Equipped with the right tools and technologies, warehouse operations can be an important driver of profits and revenue over time. But, they can also sink a business with inefficient inventory control processes, poor order management procedures, and unproductive warehouse staff.

The right warehouse management system is key to ensuring technology investments deliver on the double duty of rapidly increasing efficiency while also driving sustained return on investment (ROI) over time. Advanced warehouse automation tools provide a potential pathway for this profit priority – but how does warehouse management make the case for the investment?

In this ROI guide, we’ll explore some of the top warehouse management challenges, highlight the key advantages of using a leading-edge warehouse management system, and offer actionable insight on building an ROI case for automation adoption.

Key Takeaways

• Top warehouse management challenges include visibility, accuracy, utilization, redundancy, and optimization
• Using a modern warehouse management system can provide many benefits,  such as reduced errors, better customer experience, and so much more

Top Warehouse Management Challenges

While every supply chain management enterprise faces unique market and industry challenges, there’s a common thread: Profitability.

Supply Chain Junction puts it simply: “Maximizing profits is essential for survival. It requires not only a carefully planned strategy with deliberate execution, but casting a wider net to ensure best practices are enforced to cut dead weight and streamline processes.”

In practice, this is a two-part effort: Identifying key challenges and then creating strategies to reduce their severity and remediate their impact. Some of the most common challenges include:

• Visibility

What companies can’t see can hurt their bottom line. As supply chains become more complex and enterprises react to the inventory management challenges exposed by the recent COVID-19 crisis, warehouse inventory visibility is mission-critical but often missing in legacy WMS software-driven warehouses.

• Accuracy

As noted by Industry Week, organizations that don’t have full inventory visibility with modern warehouse management software can find themselves under- or over-stocked. Both are dangerous positions to be in, as consumer demand rapidly shifts in response to external market forces. By boosting inventory management accuracy, warehouse operators are able to craft more precise order forecasts and stock the goods that are most needed.

• Utilization

As warehouses evolve to meet changing customer demand and satisfy new supply chain compliance regulations, it’s easy for physical buildings to become disorganized and difficult to manage. This is especially problematic as increasing challenges in finding skilled warehouse staff put more pressure on smaller teams to navigate complex warehouse environments.

• Redundancy

Doing the same task twice costs companies time and money. If pallets are scanned and their data recorded by multiple staff members, the net result is lost time. What’s even more worrisome: If the numbers don’t match – determining which data set is correct requires costly double-checking to ensure warehouse accuracy.

• Optimization

With many warehouses still relying on manual picking processes, it’s easy to end up with routes that are both redundant and inefficient, in turn increasing the amount of time it takes for staff to find specific items or verify key data.

The Advantages of Using a Warehouse Management System

Warehouse management software offers a way to address these challenges without the need to implement complex, resource-heavy processes that take time away from essential employee tasks. Instead, end-to-end warehouse management systems (also referred to as WMS software, WMS system, WMS solution, or warehouse management solution) leverage advanced application frameworks to deliver complete visibility and control over operations. Equipped with key data about current processes and potential pitfalls, the right WMS vendor lets managers fine tune automation on a task-by-task basis, in turn saving staff both time and effort.

Warehouse automation offers six key advantages:

• Optimized effort

From robotic picking processes to adaptive warehouse layout mapping tools and automatic pallet scanning, warehouse process automation solutions can optimize staff effort by reducing manual labor in favor of more efficient digital frameworks.

• Improved efficiency

Reduced time from product arrival to order shipping means more revenue for warehouse enterprises. Automated WMS software helps streamline data collection to ensure staff always have the information they need to get products properly stored and quickly shipped out.

• Enhanced inventory accuracy

The ideal amount of inventory is a moving target. Too much, and product can go to waste sitting unused on shelves. Too little and companies can’t fulfill orders, in turn limiting customer loyalty. Gone are the days where spreadsheets were sufficient in managing inventory. Multiple warehouses, increasing complexity in order fulfillment procedures, and growing demand for inventory tracking all compound the need for greater automation and digitization. A built-in inventory management system in your warehouse management software is the key to help businesses strike a balance.

• Reduced order errors

Manual errors cost companies money; even small mistakes in weights, measures, or quantities can have knock-on effects across the warehouse environment. Automated inventory control and order management tools reduce this error risk with advanced data capture and self-checking solutions.

• Increased customer satisfaction

If customers are satisfied, they’ll come back. But in a consumer market now driven by digital choice, warehouse firms need to stand out from the crowd with accuracy, speed, and product visibility – automation makes it easier to achieve all three.

• Expanded visibility

Automated logistics solutions can deliver real-time monitoring of stock levels, incoming shipments and potential delays. This functionality is critically important to provide complete visibility and empower on-demand decision making.

Case in Point

While cloud-based WMS tools can streamline processes and increase operational speed, enterprise decision-makers often have a different priority than staff on the warehouse floor: ROI.

For any warehouse automation adoption effort to succeed, it is therefore crucial for teams to build an ROI-driven case for warehouse management system deployment. Here, three considerations are critical:

• Cost control

Money lost to warehouse inventory management errors, redundant tasks, or regulatory non-compliance reduces total revenues. Eliminating these sources of unintentional spend improves cost control and boosts ROI.

• Seconds saved

In the supply chain business, time is money. The more time warehouse staff spend searching for specific items or correcting order issues, the more it costs companies to keep warehouses running. The right WMS system will naturally drive improved ROI by reducing wasted time.

• Expectations exceeded

Stand-out customer service means return business and increased conversion. Leveraging the end-to-end visibility offered by warehouse automation tools helps companies exceed expectations and ramp-up ROI.

Inefficient logistics warehouse operations cost companies time and money – and can frustrate efforts to gain a competitive market edge. Robust and reliable warehouse automation delivered under the auspices of full-featured WMS solutions can help companies reduce overall costs, save precious seconds, and exceed customer expectations to drive significant and sustainable ROI.

How Magaya Can Help

More than just your average warehouse management system, Magaya Supply Chain is an end-to-end logistics software solution with built-in functionality for accounting, compliance, customer service, and so much more. All that, plus advanced WMS features that enable you to optimize warehouse operations, increase productivity, improve inventory accuracy, and so much more!

From warehouse receipts, space planning, and pick-pack-ship operations to sales orders and automated replenishment, Magaya Supply Chain has all the warehouse management features you need to grow your business and boost profits. Plus, the new Flow WMS is a handheld mobile warehouse management system that gives you WMS functionality on-the-go for the ultimate in efficient warehouse operations.