Inventory it is a very important operation. To have real information about the stock it is necessary to organize an inventory from time to time. When you have few SKU in portfolio, the inventory operations it is a simple jobs, but when you have few hundreds or thousands SKU’s the inventory operations may be a really headache. If you have hundreds of SKU, depends on the way that you were organizing the stock, an inventory operation may take you few days.
Implementing a software solution (ERP, WMS, TMS etc) in a company is the best thing that you can decide at any time. This software solution can arrange, optimize your process and secure your business because it force the employee to do things in a certain way and follow a process that software solution implement it.
As I told you it is a good option to implement a software solution in your company. The wrong things which is associated with the software solution is the level of expectations, because this level of expectations is higher, in most of the case, that you can obtain in real life after you implement a software solution.
I saw in many cases, on the company lots of software solution which was implemented wrong. The software solution it is not bad or good, but the implementation can be bad or good and in case that the implementation is bad it will cost you a lot of money in the future. For example we made a consultancy project on a company who has the well known ERP solution in the world.
Before to implement the ERP solution, in the warehouse reception, when they receive a goods they made 2 operations: they made an internal paper witch prove that the insert the goods in the warehouse in proper condition and in proper quantity and after that, in the same day they complete an excel file to have a “database” and “traceability” (limited traceability that excel file permit) of the goods.
After they implement the ERP solution they made 3 operations in the reception of the warehouse when they receive the goods (it was very strange because the owner of the company think that they must make only one operation: register the goods in ERP systems). Why they doing 3 operations? Because they made the 2 operations that they made in the past and supplementary they register the goods in the ERP systems. Why is happens something like this? The reason is that the implementation of the ERP solution is not made in good way. The implementation was bad, because they follow a bad process.
When they receive the goods in the warehouse, they cannot register that goods in the ERP solution for 2 reason: 1. The software accept to insert the goods only by the invoice (in most of the case when the goods comes into the warehouse it comes with transport document and based on the transport document some time the invoice comes into the company, so in this case the reception of the goods in ERP system will be possible not on the reception on the goods and it is reception after few time when the invoice arrive); 2. The people from warehouse cannot have the permission to insert the invoice of the goods into the systems, only the accounting department has this permission which also delays the process.
In this case the people from warehouse it is forced to keep also the old registering methods of the goods because they must prove in any moment the traceability of the goods and how many products and in which quantity they have in the warehouse.
This kind of problems I found many times in the company and this kind of problems are happens because when they made the implementation of the software solution they treat this project like an IT project not like an operational project. Also they do not use a consultant which have a lot of operational experience and which know how to set-up the process and software to solve this kind of problems. Not all the time the software companies (which implement the software solution) have good business process consultants, and all the time they want to made personalization of the software solution because for all the personalization that you ask you will pay more money. On the other hand it is not recommended that you made a lot of personalization of the software solution because this will reduce the scalability of the solution and creates you problems in the future.
So, the best way is to optimize your business process (operational) and after hat to implement the software solution having all the time an operational business consultant on your side. The operational consultant will cost you money but the total cost of the implementation process it will be lower than if you do not have an operational business consultant in this process.
We can offer support in this way because our core business is to help companies to optimise their operational business process.
I do not know how many of you, when you think to achieve a software solution for your company do you think that software solution it is necessary to be user friendly and put this on the list of priorities. If you discuss with software solution provider all their solution it is user friendly. This capability from them means to be user friendly for a generic user, generic user who works in many industries. But, for me, it is important that the solution to be user friendly for my users not for a generic users. If you analyze different industries you will see that exist terminology difference and also exist difference of capability to use technology for same people who work in different industries.
Some times in the operational activities it is necessary to decide what software solution you may buy. If you have an ERP solution already implemented in the company and you want to buy a WMS solution you have 2 choice:
WMS it is an acronym which means warehouse management system and it is a software solution which permit you to manage the warehouse. Not all the warehouse needs a WMS, but for them who need it is a solution which saves them money.
Why, you, logistic manager need a WMS?
1. It helps you to solve a lot of problems. In a classical warehouse (without WMS) some things are not easy to control: working load for every people, picking mistakes, real stock etc. To control this it is necessary to made a lot of paper and to have people to collect the data and centralized it and after that analyze those data. If you have 100 people in the warehouse this is not an easy job. For WMS it is an easy job no matter how many people do you have in the warehouse.
2. It reduces your dependency on people that works in warehouse. In a classical warehouse (without WMS) people knows where the goods are in the warehouse and your activities depends on that. If one of those men leaves your organization it is very hard to train another man to replace the old one. Without WMS it is necessary to take supplementary precautions to avoid that and this action some time costs a lot. With WMS people do not know where the products are placed in the warehouse because the WMS knows that. In this case, if a key employee leave your organization can be replace with new one in less than 1 week without lose delivery.
3. It helps you to reduce the costs. A WMS can optimize your activities in the warehouse: picking optimization (you will make less distance when you made picking), arrange goods in the warehouse respect ABC method and made this in a dynamic way etc. Using a WMS you can reduce your costs up to 30%.
4. It helps you to reduce storage space. Without WMS you are forced to use a static storage space allocation. For example: if you have a products and the maximum stock level for this products is 100 pallets you must reserve 100 pallets storage space in warehouse. When you receive the goods all this space is full. After you start to sell you fulfill this space less than 100%. If you will make an average per month you will see that your space fulfills is only 60% for every product. If you have more products in the warehouse (and this is normal in the modern warehouse) you will have every time free storage space in the warehouse till 30-40% and you cannot change that. Using a WMS you will save this storage space because you will use a dynamic space allocation and the same product will be placed by the WMS in the free location in the warehouse (using different optimization algorithm).
5. You have more free time and you improve your control process. Without WMS you cannot control the process entirely and all the time and you have a lot of problem with picking, receive and delivers the goods and, also, you have problem with employee that not respect the procedures all the time. If an employee does not respect a procedure you cannot put, all the time restriction which gives you the assurance that an employee cannot have other choice than to respect the procedure. With the WMS solution an employee cannot go further on a process flow if it is not made correct and in time the current operations and also a WMS solution can help you to solve picking problems, receive and delivery problems. Also the inventory process can be made in half of the time than in the past.
6. Lots of reports, easy to obtain with only 1 click. Without WMS you can generate a limited number of reports because it is very time consuming to collect data, prepare and analyze this data. A WMS collect data automatic or semiautomatic and you can generate a report in few minutes at the time that you deserve. These reports are more accurate than the report which is prepared and generate by mans.
7. More SKU, easy to manage. For a WMS it is easy to manage 10 SKU or 50.000 SKU. It can manage 10 SKU or 50.000 SKU and you will not see difference between these 2 situations. This can give you the possibilities to expand your business anytime that you desire.
If you do not have a WMS solution we can help you to see if you need one and also how much money you can save, hat is the real ROI of implementing a WMS solution. With our help you can create a budget, chose the right software vendor and have a good implementation of the solution in your organization.