As businesses grow and expand, the challenge of managing stock grows and expands also. We look at the key differences between a typical inventory control system vs a warehouse management system (WMS) to help identify which might be best suited to your business.
What is a warehouse management system (WMS)?
A warehouse management system (WMS) controls stock and processes around a warehouse with the goal of optimising the availability of space and operational throughput within the warehouse.
A warehouse management system (WMS) controls stock and processes
Legacy warehouse management system projects can take months or even years to implement. Smaller businesses may assume that their requirements are too basic to warrant investing in a large, bulky system to manage their stock. This used to be true but that old way of thinking is changing quickly with the introduction of low cost, easy to use cloud based warehouse management systems, even start-ups should review a WMS! Read here for more info if you are a startup on whether you should be implementing a warehouse system.
5 reasons to opt for a warehouse management system (WMS)
- Less manual labour
Warehouse systems will optimise your warehouse staff making them as efficient as possible. If you only have 1-2 people in the warehouse to begin with, this saving may be hard to see so this applies to larger teams where an e.g. 30% efficiency gain could mean losing 3 people from a 10 person shift which provides huge savings to a business.
- Fewer picking errors
Warehouse management systems tend to validate data more productively. If you are struggling with getting the right stock to the right customers, it will be worth exploring a WMS. A WMS will validate attributes such as sell by date, batch and serial numbers as well as product codes (SKU) and quantities.
- Pallets, cases and items!
Are you handling pallets, cases and items? This is where things start to get tough for most inventory control systems. A warehouse management system should clearly differentiate between these varying pack sizes and drive different behaviour towards them. i.e. you don’t want someone accidentally picking 100 cases rather than 100 items!
- Lots of orders and unique products
Do you stock a vast range of products? Do you despatch lots of orders each day? In recent years, even very small turnover business need to process 100’s or 1000’s of orders per day. Online shopping has completely changed the way warehouses operate and therefore even a small warehouse or stockroom can really benefit from a warehouse system to improve the flow of goods and data.
- 3PL warehousing
If you provide 3PL warehousing services, you need a 3PL warehouse management system. Most small businesses focus their efforts on buying and selling products so purchase orders and sales orders get priority over best practice warehousing but when warehousing is your business, you need to get it right. Customers expect online visibility of their stock and accurate invoices while 3PL margins are forever squeezed, a 3PL without a great warehouse system will soon lose clients to a warehouse with a great system!
What is a inventory management system (IMS)?
Inventory management offers the same basic ‘how many have we got’ feature as a WMS however, it doesn’t really help you do your job and run your business more efficiently. It realises heavily on manual user input and doesn’t drive best practice. An IMS system will allow you to increase the levels of stock for a product and reduce it again once it is sold. Inventory management, because it is very basic, tends to be a feature which is inbuilt the majority of accounting systems and ERP’s such as Xero, Sage and Quickbooks.
5 reasons to opt for an inventory management system (IMS)
- Very low cost
Basic inventory management systems cost very little and the function is part of many accounting software packages as standard such as Xero, Sage, Netsuite and SAP. If you are yet to invest in an accounting system/ ERP but plan to, this is a good place to start looking for basic inventory control.
- Very low order volumes
If your order volumes are low, an inventory management system plus manual controls and processes outside of the system can be a reasonable place to start. As orders increase, you’ll need to review again to keep providing quality customer service to clients.
- Small product range
If you stock a very small range of products, again, even if you process orders in large volumes, it may be a valid option to opt for IMS rather than WMS. With a small product range, the complexity just is not there and the return you’ll see will be diminished. More products, more problems!
- Much better than Excel
Until you implement either a WMS and a IMS, you are probably controlling stock on an Excel spreadsheet. This is a recipe for disaster as a business expands due to data integrity issues and lack of controls around users access to very important information e.g. anyone could accidentally delete £1,000’s of stock!
- Small warehouse team
The smaller the warehouse team, the harder it is to make savings in labour. Labour savings are a big driver of implementing warehouse management so having a very small warehouse team is a good reason to look for a cheaper option until you start throwing people at problems.
Traditional WMS implementations take a long time, are expensive, risky and don’t scale affordably if you need to start small. If you are a small or medium business, only look for a free trial with a cloud warehouse management system provider. This is a great way of seeing whether the system can really deliver what the marketing claims it can and whether it is worth the extra investment! If you’re asked to part with £1000’s before you use the system, opt for a basic IMS system to see how that benefits you short term while you keep reviewing the market for a long term partner.
Speak to one of our team to understand how ClarusWMS’ simple cloud subscription platform can support excellence by promoting better customer service, better results and faster growth.
Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.
ClarusWMS is a UK based supplier of cloud warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution and manufacturing.