F. Curtis Barry & Company Blog

As you consider evaluating and deploying automation and robotics to your warehousing and distribution processes, there are five factors you must consider to be able to implement it in an efficient and cost-effective manner.  This article identifies the analyses that should be done, before making decisions on deploying automation. 

When people plan budgets for a new WMS, two main areas that get initial budget attention are user licensing counts and costs and professional service fees.  Oftentimes people underestimate the equipment requirements, server capacity, and communication bandwidth.  You may find out the equipment required is larger and more complex to gain most of the functionality from the WMS and any add-on modules that you plan to implement.  

As you compare your WMS requirements against the detailed demo and presentations of a shortlist of vendors, it rapidly becomes obvious that selecting the most effective WMS is NOT a “one size fits all warehouses or businesses”.  The core system (often referred to as the base or vanilla system) will have certain functions that will personalize the WMS to your business through site-specific configurations at implementation time and without program changes.   Add-on modules are available to extend the core system with additional functions such as Labor Management (LMS), Slotting, Transportation Management  (TMS), automation, and other systems integrations, to name a few.  Large WMS users might have custom programming accessible from the WMS’ user library to provide specific functions not available in the core WMS.

With labor expenses increasing, small parcel shipping becoming more expensive and carriers struggling to support the volumes, companies are implementing new strategies with Micro Fulfillment Centers (MFC).

According to Indeed.com, the job employment website, the average base pay for warehouse workers is $12.92 in the U.S. However, when you factor in benefits such as healthcare, training and more – the fully loaded cost balloons to $22.22 per hour. Companies typically have the following costs over and above the base pay:

• Benefits and healthcare 35% of payroll costs
• Workers comp and unemployment 8% of payroll costs
• Training 4% of payroll costs
• Recruitment, hiring and HR 25% of payroll costs

An efficient warehouse maximizes its space use, streamlines operational functions, and increases employee productivity. A Warehouse Management System (WMS) standardizes and manages the four-wall activities and inventory management. When a warehouse is efficient, customers receive their orders on time, and the company's costs are in-line with management’s financial plan.

Below are nine major ways a WMS improves operations efficiency.

To say 2020 was a curveball most businesses would be a gross understatement. While Americans suffered and many small businesses closed permanently, multichannel businesses as a whole saw significantly higher volumes, largely from direct-to-customer orders. The difficulty was in trying to keep workers safe and have enough labor to ship customer orders without falling more than a few days behind. For some clients, the goal was to merely not fall more than 10-14 days behind.

“If you cannot measure it, you cannot improve it.”

That’s an observation that famed British physicist, Lord Kelvin, made about scientific experimentation and operational improvements over 100 years ago. It’s still pertinent today as we seek to improve e-commerce operations, be competitive and look to improve our profitability and customer service.

In order to improve operations, we first need to measure key metrics, which are units of work such as the total warehouse cost per order, shipped cost per carton, the cost per line on an order and cost per unit. Once we understand what these metrics show, we can then develop options for processes that reduce steps and therefore cost; or improve service levels in the warehouse such as order turnaround time measured in hours.

Companies that utilize third party fulfillment (3PL) services sometimes reach a point where they consider transitioning from the 3PL services to internal warehousing and order fulfillment. Some of what drives these decisions is to control costs, whereas others have had a bad experience with 3PLs and now only trust themselves with their product. Using a 3PL isn’t for every company.

Reviewing contracts for third party logistic (3PL) providers can be a daunting task – especially for those not familiar with the process.  One of the most critical aspects in any 3PL contract is the language surrounding pricing and rate increases.  It is vital to ensure that the language is fair for both the customer, as well as the 3PL.