In order to efficiently scale and manage an ever-growing number of clients, retailers have to invest in warehousing.
During the last four years, there has been a boom in warehouse investment – British companies alone have spent over 3.7 billion in warehouse rent and management. All developed economies share similar tendencies.
The amount of attention warehouse management gets is staggering yet understandable.
By handling inventory poorly, you risk overstocking, an inability to forecast commercial trends, challenges during taxation, and, most importantly – workplace injuries.
To prevent these risks, companies in the commerce industry use warehouse management software. In this post, we’ll describe the pros and cons of implementing CRMs into your own workflow, lay out their architecture, and discuss the differences between an inventory and warehouse management application.
Table of Contents:
- Benefits of Using a CRM Warehouse Management System
- Types of Warehouse Management Systems
- What Do You Need to Know About Inventory Management Systems?
- To Find or Develop Warehouse Management Systems For Your Business?
Benefits of Using a CRM Warehouse Management System
Using CRM software for warehouse management allows business managers to create a transparent system for stocking, accounting, and so on. The collaboration across the entire team will improve both the quality of services and the company’s profit.
Here are the benefits of using a warehouse management CMS.
1. Reduce warehouse costs
There are several ways to optimize warehouse management and reduce the cost of maintenance. Using all the available space without waste, distributing the workforce between high- and low-priority tasks, and detecting expired items all leads to an enhanced, more flexible inventory flow.
There are even systems equipped with floor simulators that allow business managers to lay out the way the furniture will be placed at the warehouse.
2. Improve customer service
Using warehouse management CRMs offers a clear set of benefits for suppliers and customers alike. For one, you will be able to reduce the waiting time on bays and docks – this will speed up the supply chain.
On the customer’s end, you will be able to conduct fast product delivery or send real-time updates about the availability of any given product.
Companies that develop an inventory management software for warehouse inventory have a higher awareness of the state of merchandise and are able to give to-the-point, substantial answers.
3. Increase accuracy and productivity
With the help of CRM software, you will be able to get in-depth data on the state of the stock and inventory. Having real-time updates about each individual product or warehouse as a whole will help you accomplish the following:
- Cut error-induced operating costs
- Plan restocking in a timely way
- Get insights on possible risks (shipment delays, for instance)
- Forecast a future warehouse capacity
Using CRMs will heavily contribute to the increase in the efficiency of the warehouse.
Business managers will be able to take a proactive approach to problem-solving instead of facing management issues in real time, under higher pressure.
4. Enhanced flexibility and scalability
Managing a warehouse manually is challenging enough, and even more so if there are several locations to account for. To that end, CRM is extremely helpful. A business manager will be able to create a consolidated data system that stores information from all shops and warehouses.
Cloud warehouse management software will improve the quality of employee allocation between various sites, help ensure that all warehouses work to their peak efficiency, and analyze and compare the workflows on each site.
As the number of stores and warehouses increases, so does the amount of paperwork. Most CRMs offer customized documentation templates to speed up reporting, billing, and taxing.
This way, a business manager will be able to create a unified multi-client standard valid across all available locations.
5. Boost transparency
Using a CMS will improve inventory tracking and warehouse visibility. This includes creating transparency regarding the state of stocks and warehouse capacity as well as getting a deeper insight into the team’s capability.
Warehouse management software will improve the transparency of processes within the company. A business manager can use CRMs to track employee work habits and spot malpractices as soon as possible.
6. Ensure compliance
Warehouse management CRM will help businesses comply with governmental policies. Such a system will allow inventory managers to check if all goods have the paperwork confirming their provenance and delivery, if everything stored in the warehouse has appropriate packaging, and so on.
A CRM is essential for efficient quality control as it will track the state of shipping, packaging, layout efficiency, and correspondence of paperwork to the real life state of the inventory.
A manager will be automatically alerted in case any issues have been detected, as will their staff.
Types of Warehouse Management Systems
While all warehouse management systems (WMS) target the same objectives and have similar benefits, there are different types of warehouse management systems based on its operating mode, development cost, and scale of usage.
There are three common types of WMS software. Let’s review each of them.
1. Standalone WMS
Such software is focused on managing the internal processes in the warehouse. While it’ll help deal with stock updates, budget calculation, and employee allocation, there will be no features for handling the supply chain and transportation.
The feature list of a standalone WMS includes:
- Barcode scanning
- Product expiration date tracking
- Cycle counting
- Packing control
- Employee performance monitoring
A standalone WMS is the most basic type of warehouse management software. It’s worth consideration for companies that want to have the first shot of automation or have to deal with a tight budget. For large-scale businesses, a standalone WMS will not be the most suitable solution due to its functional constraints.
2. Supply chain modules
This software has a broader range of features than a standalone WMS as it’ designed to specialize in monitoring the entire supply chain. Apart from inventory management automation, a supply chain module tracks product cycling and material sourcing.
A supply chain module can function as a standalone solution for logistic tracking or be coupled with a fleet tracker and united into a single SCM system.
Some specific features of a supply chain module include:
- Logistics and shipping status updates
- Order management
- Demand forecasting
- Inventory management
- Return management
These are the basic supply module features. Custom tools may have a broader functionality depending on the needs and objectives of a client.
3. Integrated with ERP
Out of all the solutions described above, an ERP (enterprise resource planning) integrated system is the most powerful one. It combines the functions of many dedicated tools handing inventory management, documentation, accounting, supply chain management and tracking, human resources and customer relations, etc.
An ERP solution includes:
- A single database for all departments with shared access
- Automation for all mundane tasks – taking orders, billing, reporting, invoicing, etc
- Data analysis and forecasting
- Rich reporting with graphs and charts
- A set of accounting tools
- Customer relationship management tools
- Tracking solutions
If you integrate a WMS with ERP, it’ll allow business managers to make data-driven decisions, automate day-to-day processes, store all the documentation, and handle accounting and human resources.
What do You Need to Know About Inventory Management Systems?
While the terms ‘inventory management’ and ‘warehouse management’ are often interchangeable as they both handle stocks, supply chain, and product cycles, there’s a difference between the two.
Needless to say, when choosing a management software, be sure to know the distinction between a WMS and an inventory management system. Let’s dig deeper into their differences.
What is Warehouse Management?
Warehouse management has a broad definition as it tracks every step of the product cycle. Starting from freight management and tracking to logistics and product distribution, a warehouse manager has to supervise all movements of goods.
There are six main pillars of warehouse management:
- Item inbound processes – all goods are logged and checked after being received by a company.
- Warehouse layout planning and management – a manager has to supervise the placement of items (the fast-moving ones should be easier to reach, the complementary goods are usually stored nearby, and so on). This stage is crucial for avoiding errors like product misplacement.
- Picking – locating products in a way, appealing to a shopper.
- Packing – an order is packed in a damage-resistant way to withstand the challenges of shipping.
- Shipping – tracking the status of product delivery to the end client as well as the compliance of the shipping conditions with norms and regulations.
- Handling returns – checking return items to ensure the size of the returned order corresponds to that of the original one and logging the return data into a customer database.
What is inventory management?
Inventory management is a narrow term compared to warehouse management as it deals with supervising stocks and monitoring the number of products that are distributed for sale.
The responsibilities of an inventory manager include:
- Ensuring that delivery is done on time
- Dividing items into groups of high, moderate, and low value
- Managing drop shipping and cross-docking
- Writing sales reports
The difference between a WMS and an inventory management system lies in complexity. It’s common for vendors to make a warehouse inventory management software more robust in terms of features and available tools.
In other words, while an inventory management system can handle inventory, a tool for inventory management will not be able to cover all the aspects of warehouse optimization.
While going with a basic inventory management system (IMS) is a good option for small businesses, as your company scales, it’s better to shift for a WMS due to its high-level performance and a broad range of available tools.
To Find or Develop Warehouse Management Systems For Your Business?
If a warehouse management system development is your choice, there are two ways to go about getting one. To start with, you can choose a vendor that’ll provide you with an off-the-shelf solution. The payment for such software is usually subscription-based.
On the other hand, a business manager can go with custom software development. To make this happen, you will need to hire a dedicated team that’ll develop a warehouse management software tool from scratch based on your business’ requirements and needs.
Which one is better for you? Let’s analyze the pros as well as the cons of both to have a clear idea.
Pros & Cons of an Off-The-Shelf WMS
Off-the-shelf products are often used by businesses who are new to automation and are not ready to invest in custom products. At first glance, an off-the-shelf management system might not seem advantageous. Having said that, it comes with its own pros.
- Quick to deploy. It takes 10-15 minutes to register an account and set up a subscription for an off-the-shelf tool. In the span of several days, the entire team can learn how to use the tool. As a result, the return on investment comes quicker compared to custom products.
- Large user community. Widespread off-the-shelf management systems have a large user base, that’ll share tips, maintenance hacks, and so on. This way, you will always find someone willing to answer a tool-related question.
- Lower initial cost. In case you want to test if the idea of a WMS implementation is viable, subscribing to a basic off-the-shelf tool is the safest choice.
Despite its low cost and other benefits, an off-the-shelf warehouse management system doesn’t lack drawbacks. Let’s examine the most common ones:
- Such systems often require additional components. It is likely that an off-the-shelf warehouse management system will lack a few features needed to manage your business efficiently. In this case, you’ll still have to hire a developer to upgrade the tool, increasing its overall cost.
- Subscription costs add up over time. In case you want to create and use a warehouse management system for years, the initial low cost of an off-the-shelf solution will nullify itself. Over time, the business manager will spend more paying for subscriptions as opposed to developing a custom tool.
Pros & Cons of a Custom WMS
An off-the-shelf product can create functional constraints that will halt your company’s development. This is not the case for companies who make a warehouse stock management software from scratch that provides warehouse managers with the tools, flexibility, and freedom they need.
The advantages of a custom WMS include:
- A business owner can ask for integration with all the tools needed for peak efficiency
- A warehouse manager will only have the features they need for handling mundane activities instead of having to deal with an interface cluttered by seldom used tools
- Constant support on a developer’s end
- Personalized security measures as opposed to generic ones used by off-the-shelf products
Evidently, there are certain challenges when it comes to custom software. The main disadvantages that restrain warehouse managers from using tools built by dedicated teams include:
- A huge reliance on the team’s skill
- Inability to read user reviews about the exact WMS a business manager wants to develop
- It will take more time to build a WMS software than to deploy an existing tool
- Higher initial development cost means a custom WMS only pays of as a long-term investment, not a quick fix
In short, an off-the-shelf solution is a better fit for a business if it:
- Doesn’t run multi-layered, advanced operations
- Is new to automation and a manager wants to start warehouse management solutions usage
- Needs a quick fix
- Operates on a limited budget
In other cases, a custom WMS appears to be more attractive due to more flexibility and scalability opportunities as well as its lower cost in the long run.
To make a warehouse logistics software is essential for businesses with ambitions to scale and expand their product range.
It provides company owners with insights on space and workforce allocation, monitors the inventory and the supply chain, and allows them to create a fully automated management framework.
To build a warehouse system software, business managers can consider reaching out to a vendor for an off-the-shelf solution. In case you want to have a long-lasting, large-scale product, developing a custom solution is a reasonable choice.
Newizze is a team of skilled software developers that’ll help you build a warehouse management system software, with all the tools needed to improve the company’s efficiency and generate revenue. We have developed dozens of basic tools for startups and SMEs as well as large-scale systems for corporations.
Take a look at our portfolio to see what the team is capable of. To tell us more about your vision for a WMS for your organization, contact our managers. We’ll analyze the project and find the most efficient solution for your business needs!