Saving space in your warehouse becomes increasingly important as your business grows and inventory becomes more unmanageable. Warehouse Management Systems (WMS) are designed with to improve your inventory management with a system that will cut costs and help your warehouse run more efficiently. Cost saving associated with reduced labor and administrative costs are an additional benefit with a WMS implementation. Additionally, you will experience an increase in customer service levels. Increasing efficiency and reducing cost is achieved with better space management for your warehouse.
3 Strategies to Manage Space with Warehouse Management Systems (WMS)
1. Minimize Storage Space: Do you currently have the ability to eliminate or minimize the need for outside storage? If so, you have the direct savings of reducing lease cost (normally on a $ per sq.ft. basis), insurance, and possibly transportation costs. Depending on the size, complexity and activity of the off-site storage, you may even be able to save labor costs associated with managing and transporting the inventory back and forth. Improvements in space utilization generally range from 5-15%.
2. Track Every Location: A Warehouse Management System (WMS) tracks every location and knows where each product and quantity received should be stored. Put-away can be directed to maximize space utilization, minimize put-away travel, minimize pick travel, or some combination. The WMS knows the size and weight of each item, case and pallet, and the physical constraints of each location.
3. Improve Pick Locations: Material is placed in an appropriate location based on these criteria and other pre-configured put-a-way rules pertaining to forward pick location replenishment, product velocity, storage requirements, etc. Space utilization improvements are generally step functions. In a typical situation where the distribution infrastructure is owned, the creation of empty space in the warehouse produces no real benefit. The amount of space made available must be enough to provide for other activities.
For instance, if 500 sq.ft. are freed up, this will provide very little benefit. If, however, 5,000 sq.ft. becomes available, several alternatives can be presented for the new space. For internal space savings, if enough space is made available to avoid new construction expansion or a green field site, this can be directly qualified as a cost avoidance.
For example, if enough new space is available to be used for light manufacturing, value added services, offices, etc., this can be classified as a savings. If the new space can be subleased, this can also be classified as an incremental cash inflow. However, you must also consider the potential cost of refurbishing the facility as required by the potential tenant. Additionally, location utilization is improved by using a WMS. A non-automated operation is generally considered at capacity when 80% of the locations are being used at any given time.
With a WMS, operating capacity can be increased to 95+%. This improvement is due primarily to the WMS’s ability to continually manage inventory consolidations, re-warehousing activities, and mixed item locations.
Learn more about the
Benefits of Warehouse Management System (WMS)
Posted by iCepts Technology Group, Inc. An Accelos and Microsoft Dynamics NAV Partner in Pennsylvania
iCepts Technology Group, Inc. Middletown, PA
We are a Microsoft Dynamics NAV Partner offering implementation, service, and support for Microsoft Dynamics NAV in: PA, DC, DE, MD, NC, NJ, NY, OH, VA, WV, and the entire Mid-Atlantic Region. We also offer implementation, service, and support for HighJump’s Warehouse Edge (formerly Accellos One) Warehouse Management Systems in: PA, DC, DE, MD, NC, NJ, NY, OH, VA, WV, and the entire Mid-Atlantic Region.
As experienced SCM, WMS and ERP consultants and value added resellers (VARs), we provide start to finish services for the solutions we represent Microsoft Dynamics NAV for Distribution and Manufacturing, Accellos Warehouse Management System (WMS), Server virtualization, open source VOIP phone systems and infrastructure and security. We provide services that cover process analysis, implementation, training, security and networking. Naturally, we also provide full ongoing support for years after implementation to help our clients succeed. We are your one stop shop for your business technology needs.
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Another version of this blog was posted on iCepts blog posted by Greg Miles on June 13, 2017 - Managing Warehouse Space Better with WMS
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