How To Implement A Warehouse Management System?

How To Implement A Warehouse Management System

Ninaad Acharya

Co-founder and CEO

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Implementing a new system and getting the entire organization adapt to it is an extremely challenging and time-consuming process. The challenges are multiplied when you’re trying to implement a new warehouse management system (WMS). There are endless possibilities of things that can go wrong – from inventory going missing to orders not being fulfilled. And as a result you might face one of the biggest problems any brand or 3PL ever faces – bad customer experience.

If you are the Chief, VP or Director of Fulfillment and Technology at a 3PL, you would have a number of responsibilities on your shoulder. The primary responsibility would be to oversee the company’s logistics operations and technology systems. This would involve:  

  • ensuring that orders are fulfilled accurately and on time  
  • implementing and maintaining the technology systems that support these operations, such as warehouse management systems, transportation management systems, and automated systems for tracking and reporting.  
  • ensuring that the company’s technology systems are aligned with the company’s overall business strategy and objectives,  
  • staying up to date on industry trends and best practices in logistics and technology 
  • managing the day-to-day operations of the warehouse and distribution centers 

One of the most important responsibilities would be implementing a new WMS to support the scaling and growth of the 3PL. However, implementing a WMS, like implementing any tech, comes with its own set of challenges.  

Challenges of implementing a new WMS

Some of the major challenges you may face include:

Lack of buy-in from stakeholders

Getting all stakeholders, including employees, management, and customers, to agree on the need for a new system and to support its implementation can be challenging. 

Integration with existing systems

Integrating the new WMS with existing systems, such as ERP, TMS, and other warehouse equipment, can be time-consuming and complex. 

Data migration and accuracy

Migrating data from existing systems to the new WMS can be a difficult task, and ensuring data accuracy during the migration process is crucial. 

Training and adoption

Providing adequate training to employees on how to use the new system and getting them to adopt it can be a big challenge, especially if the employees are resistant to change. 

Cost and budgeting

Implementing new technology systems can be expensive, and budgeting for the costs, as well as ensuring the system will provide a return on investment can be a challenge. 

Timeframe and deadlines

Meeting tight project deadlines and ensuring the system is implemented on time while meeting the requirement can be difficult. 

Technical issues 

Technical issues such as bugs, compatibility problems, and system downtime can cause delays and frustration during the implementation process. 

Unexpected challenges  

There may be unforeseen challenges that arise during the implementation process that were not anticipated during the planning stages. 

Although implementing a new technology system like WMS can be a complex and challenging process, with proper planning, resources and support, you can successfully implement a WMS. Moreover, it will lead to improved efficiency, accuracy, and visibility in warehouse operations. 

What are the selection criteria for WMS software?

When selecting a new warehouse management system (WMS), there are several selection criteria that should be considered, including: 

Functionality  

The WMS should have the necessary functionality to support the company’s warehouse operations and meet their specific requirements, such as inventory management, order fulfillment, and transportation management. 

Scalability

The WMS should be able to scale to meet the company’s future growth and changing business needs. 

Integration

The WMS should be able to integrate with existing systems, such as ERP, TMS, and other warehouse equipment, to ensure smooth data flow and process automation. 

User-friendliness

The WMS should be easy to use, understand and navigate for employees, reducing the need for extensive training. 

Reporting and analytics

The WMS should provide robust reporting and analytics capabilities, allowing the company to track key performance indicators and make data-driven decisions. 

Cost 

The WMS should be cost-effective and provide a good return on investment. 

Flexibility 

The WMS should be flexible and able to be customized to meet the company’s unique needs. 

Vendor reputation and support 

The vendor should have a good reputation in the industry and provide ongoing support, maintenance and upgrades. 

Security

The WMS should provide robust security features to protect sensitive data and comply with industry regulations. 

Cloud-based or On-premise

The company should decide if they want a cloud-based system that can be accessed from anywhere or an on-premise system that is installed on the company’s own servers. Both options have their own pros and cons, and the company should decide which option fits their needs and requirements. 

Thorough evaluation of WMS capabilities and features

This includes reviewing the system’s functionality, scalability, integration, user-friendliness, reporting, and analytics capabilities. 

Thorough evaluation of vendor’s implementation, support, and maintenance services

 This includes reviewing the vendor’s reputation, responsiveness, support team, maintenance and upgrade plans, and compliance with industry regulations. 

Demos and testing

It’s important to see the WMS in action and test it to ensure it meets the company’s specific needs and requirements. This can be done through vendor-led demos or through a proof of concept. 

Involvement of employees

Employees who will be using the system should be involved in the selection process to ensure the WMS will meet their needs and requirements. This includes getting their feedback on the system’s functionality, ease of use, and training needs. 

Proof of Concept  

This is a trial run of the WMS in a simulated environment that closely mimics the actual production environment. It allows the company to validate the system’s capabilities, test the integration with other systems, and ensure that the system meets the company’s requirements. 

Cost-benefit analysis

A cost-benefit analysis should be done to evaluate the benefits of the WMS versus the costs. This includes evaluating the costs of the system, the vendor’s services, and the costs associated with implementation, training and maintenance. 

Evaluation of the vendor’s references

It’s important to check the vendor’s references and speak to other companies that have used the WMS to get an idea of their experience and the vendor’s support and services. 

Reviewing the vendor’s contract and service level agreements

It’s important to review the vendor’s contract and service level agreements to ensure they meet the company’s needs and that the vendor will provide the necessary support and maintenance. 

Overall, the selection process should be thorough and should involve evaluating the WMS’s capabilities and features, as well as the vendor’s implementation, support, and maintenance services. Involving employees in the process, testing the system, and reviewing the vendor’s references and agreements are also important steps to ensure that the WMS will meet the company’s needs and provide a good return on investment. 

Different ways of how to implement a Warehouse Management System

There are several different ways of implementing a warehouse management system (WMS), including: 

On-premise deployment

This is the traditional method of implementing a WMS, where the system is installed on the company’s own servers. This option provides more control over the system and data, but it also requires more resources for maintenance and upgrades. 

Cloud-based deployment 

This method of implementing a WMS involves using a cloud-based system that is accessed over the internet. This option reduces the need for on-premise hardware and resources and allows for more flexibility in terms of access and scalability. 

Hybrid deployment  

This method of implementing a WMS involves a combination of on-premise and cloud-based deployment. This option provides the benefits of both on-premise and cloud-based deployment and allows the company to choose the option that best suits their specific needs. 

Phased implementation

This method of implementing a WMS involves rolling out the system in stages, starting with a small pilot group or a specific area of the warehouse. This allows the company to test the system and make adjustments before rolling it out to the entire warehouse. 

Big-Bang implementation

This method of implementing a WMS involves rolling out the system to the entire warehouse all at once. This option can be more efficient and cost-effective, but it also requires more resources and planning. 

Each method of implementation has its own set of pros and cons, and the best option will depend on the company’s specific needs, resources, and goals. It’s important to evaluate the different options and choose the one that best fits the company’s requirements and budget. 

KPIs to track when implementing a new WMS

When implementing a new warehouse management system (WMS), it’s important to track key performance indicators (KPIs) to ensure that the system is meeting the company’s objectives and providing a good return on investment. Some KPIs that should be tracked when implementing a new WMS include: 

Inventory accuracy

This KPI measures the accuracy of the inventory levels in the WMS compared to the actual inventory levels. A high inventory accuracy rate indicates that the WMS is accurately tracking and managing inventory. 

Order fulfillment rate 

This KPI measures the percentage of orders that are fulfilled on time and accurately. A high order fulfillment rate indicates that the WMS is effectively managing and tracking orders. 

Stockout rate

This KPI measures the percentage of stockouts, or instances where a product is out of stock. A low stockout rate indicates that the WMS is effectively managing inventory levels to ensure that products are available when needed. 

Picking efficiency

This KPI measures the time it takes to pick and fulfill an order. A high picking efficiency rate indicates that the WMS is effectively managing and optimizing the picking process. 

Receiving efficiency

This KPI measures the time it takes to receive, put away and process incoming products. A high receiving efficiency rate indicates that the WMS is effectively managing and optimizing the receiving process. 

Labor productivity  

This KPI measures the productivity of warehouse employees in relation to the WMS. It can be measured by comparing the number of orders fulfilled before and after the implementation of the WMS. 

Return on Investment (ROI)

This KPI measures the financial return on the investment made in the WMS. It can be calculated by comparing the costs of the WMS with the benefits it provides in terms of cost savings, increased productivity, and improved efficiency. 

Error rate

This KPI measures the number of errors that occur in the warehouse operations, such as shipping the wrong item to a customer or picking the wrong item from the warehouse. A low error rate indicates that the WMS is effectively managing and tracking warehouse operations to reduce errors. 

On-time delivery rate

This KPI measures the percentage of orders that are delivered on time to the customer. A high on-time delivery rate indicates that the WMS is effectively managing and tracking orders to ensure timely delivery. 

Stock turnover rate

This KPI measures how quickly the inventory is sold and replaced. A high stock turnover rate indicates that the WMS is effectively managing and optimizing inventory levels to ensure that products are sold quickly. 

Tracking these KPIs will provide insight into the system’s performance and can help identify areas that need improvement, so that the WMS can be optimized to meet the company’s objectives. It’s important to have a clear understanding of the objectives and goals the company wants to achieve with the WMS and measure the progress towards those objectives. 

The Best Way to Implement a WMS – In-house Vs. Outsourcing

The decision of whether to implement a warehouse management system (WMS) in-house or to outsource it through a consultant depends on a variety of factors, including the company’s specific needs, resources, and goals. 

In-house WMS implementation

Pros

  • Provides more control over the system and data. 
  • Allows the company to tailor the system to their specific needs. 
  • Allows the company to manage its warehouse operations directly. 

Cons

  • Can be more costly as it requires purchasing and maintaining the necessary hardware and software. 
  • Requires hiring and training employees to operate and maintain the system. 

Outsourcing to a consultant

Pros

  • Provides access to specialized expertise and resources. 
  • Can be more cost-effective for companies that don’t have the resources or expertise to implement a WMS in-house. 
  • Can offer additional services such as transportation, packaging, and other logistics services. 

Cons

  • Less control over the system and data. 
  • May not be able to tailor the system to the company’s specific needs as much as an in-house implementation. 
  • Dependent on the 3PL provider’s expertise and resources. 

It’s important to weigh the pros and cons of both options and choose the one that best fits the company’s specific needs, resources, and goals. This should be done by conducting a thorough analysis of the company’s needs, the costs, and benefits of both options, and the potential return on investment. Additionally, involving key stakeholders such as warehouse managers, IT staff, and other relevant departments in the decision-making process to ensure that the chosen option aligns with the company’s overall goals. 

If you are planning on implementing a new WMS to support the growth of your 3PL, contact us for help. Our team of engineers, business analysts, project managers, QA testers, and technicians have successfully implemented more than 500+ supply chain systems.

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Ninaad Acharya

Co-founder and CEO

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