Putting Off Your WMS Could Have Significant Financial Consequences

A WMS project shouldn’t be put to the back of the queue

Initial thoughts on the implementation of new WMS project can be negative – it costs money, takes time, resources and the concept of change can be off-putting. However, the positives almost always outweigh the negatives, with businesses moving to the cloud in favour of a scalable, accessible and collaborative platform.

Often, the longer the delay, the longer it takes to replace inefficient business processes with more efficient ones – or resolve them altogether. A WMS implementation or upgrade can fall behind as a priority in busy businesses, however operations only become more complex with growth.

This can lead to all kinds of inefficiencies within a business; duplicated data entry, delays, inaccurate data and more. With the competitive nature within the industry, you can’t afford to risk making these avoidable mistakes or compromise customer satisfaction when an affordable WMS software solution is within closer reach than you may think.

Look beyond those initial doubts and upfront costs to get to the heart of the matter.

It’s critical to account for the revenue your business never sees or gives away because it doesn’t have the right WMS. Warehousing software that is functionally rich and also supports your organisation’s continuous innovation and improvement is critical to the company’s overarching success. It’s also possible that maintaining your existing solution is more expensive over the long-term than a new system would be.

Still having doubts? Take a look of some key examples of the problems you might incur if you delay your WMS project.

Not meeting customer expectations:-

Consumers today have almost limitless options. That’s great for the end user but creates numerous new hurdles for retailers, wholesalers and manufacturers. Shipping windows are tighter than ever before because customers want their products as quickly as possible. Prices must be extremely competitive or the shopper/vendor will simply find another place to spend their money. They also expect free, painless returns and some prefer to pick up orders at retail stores.

Your WMS must facilitate the processes that make it possible to meet those standards. For example, dynamic waves or waveless processing has become popular because it constantly pushes orders to the floor instead of grouping them into pre-planned waves. More advanced systems will continuously reprioritise orders based on cut-off times, inventory levels, carrier availability and other factors. Not only does this help ensure a positive customer experience, but it also improves labour efficiency because there is a steady flow of work.

Lost sales opportunities:-

A well-known big box retailer approaches your company because it wants to carry your product on its website. But there’s one condition: you must fulfil and ship the order while following their unique requirements. It’s an intriguing opportunity, with real money on the line, but do you have the solutions necessary to take on this commitment?

Can your WMS adapt your business processes to meet the needs of your new customer? Every day that you can’t ship on behalf of a customer, you’re losing potential sales – that’s your cost of opportunity. That one contract with a big box retailer, especially if it grows into a more lucrative relationship over time, could make up for the cost of a new WMS project all by itself.

Similarly, if your systems cannot handle both pallet-based store replenishment shipments and e-Commerce orders through your own website, it hurts the bottom line.

It’s so critical to calculate ROI when figuring out if it’s time to invest in a new WMS.

Not upgrades can be expensive in the long term:-

An aging or shoddily developed WMS can become increasingly fragile over time. With many solutions, modifications are completed via custom source code that can make it unstable. Upgrades can become risky – or in some cases, not possible – because all of that custom code must be re-implemented. And if you decide to move forward with an upgrade, you know it will come with a hefty price tag.

So, you’re left trying to succeed in a highly competitive environment with an inferior WMS that was never intended to manage the complexity of modern supply chains. Once again, this will directly impact your revenue. You miss out on the enhancements that come with major upgrades and do not achieve the corresponding efficiencies. When there is an issue, support may not be able to help because the software has reached the “end of life” stage.

A modern WMS system will come with the features you need to optimise your operations, meet the challenges of the day and stay ahead of competitors. And with certain warehouse management systems, all configurations roll forward with upgrades. Suddenly, you’re not avoiding an upgrade but eagerly awaiting the vendor’s next big release.

Additional charge backs:-

As customer requirements have increased and more sales channels emerge, there are far more retail compliance standards than ever before. Those standards may be as simple as sending acknowledgement of an EDI purchase order. It could be more sophisticated, like specific advance ship notice (ASN) labels or packaging and packing slips that make an order look like it came from a retailer when a wholesaler or manufacturer actually drop shipped it. Retailers must implement these standards to streamline their supply chains, so they can meet tight delivery windows and maintain shrinking profit margins.

Failure to satisfy these compliance standards leads to charge backs that pull money directly out of your pocket.

This could add up to tens of thousands of dollars every year – and it’s avoidable. The WMS can also provide specific instruction during the receiving process for orders that come from certain retailers to speed up fulfilment and confirm all requirements are met. A best-of-breed WMS can also create an internal scorecard that tracks compliance performance. If that scorecard shows a clear source of issues, an adaptable WMS will allow you to alter workflows to correct the problem.

And remember that the cost of compliance issues does not end with those charge backs. Amazon and other massive retailers have plenty of options when looking for suppliers, and they will take their business elsewhere if they have a bad experience with a certain vendor. So, you’re missing out on future earnings, as well.

Just one of the issues listed above could justify the price of a new WMS, and it’s possible more than one of them rings true for your business. Supply chain execution technology is a significant investment, but it is one that drives big returns. Don’t wait until your business profits are dipping before you start to look for a WMS project– act now.

About us:

Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.

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 warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.

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