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As the end of the business or calendar year approaches, the annual inventory project begins to be mentioned. Given the legal obligation, the inventory must be done at least once a year, and it is known that warehouse workers and the management often do not do this project with pleasure.

However, inventory does not have to be chaotic and stressful for workers and the company at all. It is in fact a reflection of the year-round management of the warehouse, goods, inventory, and other assets belonging to the final report, and as such has many benefits to the successful running of the company. To facilitate the process itself, there are specialized software products for process management and automation in the warehouse, but before we touch on all the benefits of such software, we need to define in more detail what exactly is inventory and why it is carried out.

What is inventory?

An inventory is a legally defined process that includes an annual inventory of assets, liabilities, and capital and is conducted to reconcile the book balance with the actual balance of all the company’s assets and liabilities.

The inventory process itself in terms of warehousing operations refers to counting the quantities of stock in the warehouse and checking their condition.

Namely, the purpose of the inventory is to count each item in the warehouse in order to determine the shortage or surplus of stock in relation to the bookkeeping figures, and ultimately to determine the inventory surpluses or shortages.

Time of conduct and types of inventory

Although the law does not clearly define the exact date of the inventory, companies are required to carry out this process no later than the end of the business day when it is necessary to list the assets and reconcile this list with the book balance. In our experience, the annual inventory is in most cases done at the end of the year, before 31st of December of the current year, and before the opening of the new business year, in order to start the new year with a “clean” slate. Inventory is also an obligation when changing the status of a company such as liquidations and bankruptcies, but we will focus here on inventory in regular warehousing and business operations.

When we talk about the types of inventory, most often the already mentioned regular inventory is carried out – at the end of the business year where the subject of the inventory is the entire assets and liabilities of the company. Extraordinary inventory is carried out in case of extraordinary changes, such as sale, bankruptcy, or liquidation of the company, or in case of special requests for the extraordinary inventory of assets within the company. The third type of inventory is kept in companies that have warehouses with turnover and large quantities of goods, and for the purpose of continuous implementation, it was given such a name – continuous inventory or Cycle count.

Challenges of inventory

What is considered a precisely managed warehouse? The goal of any arranged warehouse is to have over 97% accuracy of the goods in stock. In the vast majority of cases, the situation is not like that, and the inventory shows a surplus or deficit of the actual state of the stock. Surpluses or shortages occur mainly due to human error in the warehouse, untimely registration of goods, but also due to the expiration date, accidental destruction of goods, and similar reasons.

If the inventory is carried out manually, with printed inventory lists, it can be a lengthy process that is extremely prone to errors due to the human factor. Companies that rely on employees’ excel spreadsheets, and access inventory without a system must count entire product ranges, with each individual product located on individual transport units. This unnecessarily prolongs the recording process and increases the possibility of error. Also, in such a situation, it is necessary to increase the workforce through additional temporary employment of new employees, which can significantly affect costs. Additionally, without a software system, warehouses do not have strictly defined locations of goods and the search itself is extended.

How to reduce inventory errors using WMS?

There are various tips on how to conduct an inventory in principle and reduce the number of errors and make the whole process easier for all participants. If you’ve already done some annual inventory, you’re probably already familiar with some of them. We will focus here on the benefits you can get using the Warehouse Management System software solution which, due to its automation of warehouse processes, greatly simplifies the process.

If you are wondering how to get started with an inventory and what are the tips for its successful implementation, experts agree that good and quality preparation is crucial to facilitate the process, and it can be done with quality labeling, clear instructions, and inventory lists, all options WMS automatically offers.

The Warehouse Management System and its extended arm in the form of a barcode terminal bring several benefits that will improve warehouse management accuracy and facilitate inventory.

The process of tracking an item begins when it enters the warehouse, during which the employee reads the product with a scanner. This reading is then continuing with any change in the condition such as movement, commissioning, packaging, and all other changes in the status of the goods. These statuses and records of each step of the item in the warehouse are recorded directly in the WMS, so all WMS users in the warehouse know the exact location and condition of the goods at all times. This creates a quality preparation and foundation for the inventory count itself.

Not only is it possible to get an extremely accurate view of inventory through WMS’s way of tracking, but the Warehouse Management System easily integrates with the company’s existing ERP system, so the warehouse status can be seen at all levels of the company.

Faster and more accurate inventory

WMS allows inventory reports to be generated automatically, so it is theoretically possible to have quick inventories on a weekly or even daily basis. When it comes to a comprehensive annual inventory, an advanced warehouse process management software system makes it easier to count items. Employees have precise insight into the condition and location of goods in the warehouse, so the inventory process is accelerated, and re-scanning facilitates and reduces the potential for errors. A

lso, when checking items, employees are guided by manual terminals, according to the logical sequence of locations in the warehouse, and thus errors are minimized. If you have unopened pallets and packaged products, a simple barcode scan can “count” a large number of products extremely quickly.

Continuous automated warehouse management is an excellent basis and preparation for inventory. It is known at which location the goods are located within the warehouse, as well as the other status of the item itself. The WMS system can prepare extremely accurate inventory lists, and due to the nature of continuous monitoring, the inventory process itself will be faster and more accurate.

As a consequence of using WMS, inventory surplus and the deficit will be reduced. They are still possible because people still play a significant role within the company, and mistakes happen. However, with WMS they are minimized. Just as the Warehouse Management System brings greater efficiency and savings in day-to-day operations, it also speeds up the inventory process, which is much more precise.

In case you’d like to find out more, contact us and we’ll provide you with our consultancy.

The enormous growth of e-commerce, faster supply chains, and digital transformation put massive pressure on companies to modernize and improve their logistic processes and warehouses.

One of the critical upgrades for any modern warehouse is a specialized software solution like Warehouse Management System.

If your company relies on excel spreadsheets (or even worse on paper) and expects to be competitive, you may be in trouble. A quick and efficient warehouse is now possible only with the help of a quality WMS solution. With WMS, you are getting automation of all warehouse processes, and accurate flow of goods through the warehouse and detailed and transparent insight into your inventory.

For all SMB companies and enterprises with second thoughts about implementing WMS, we made a list of key benefits such a solution can offer for your warehouse and business overall.

1.   Optimizing floor space

One of the essential features of the WMS solution is the optimization of warehouse space. The software has the ability to analyze workers’, machines’, and goods’ movement on the warehouse floor. Once you implement WMS, you can make an ideal scheme in The Warehouse designer for optimal usage of floor space to the exact parameters of your warehouse needs.

That way, you can automatically define receiving and put-away processes of the goods in your warehouse and optimize labor productivity rates by ensuring your staff is working the smartest possible way. 

By doing that, you will reduce unused warehouse space and automatically increase available floor space. Cutting down the needed time for your staff to find a specific item is a bonus that leads to lower operational costs. Broad compatibility is another advantage of the professional software solution.

Modern WMS is compatible with all the usual protocols used in the warehouse, depending on the type of goods and warehouse. It also takes into account the specific needs of your warehouse and the type of goods you are storing. WMS automates and accelerates processes no matter if you use First-in-first-out (FIFO), Last-in-first-out (LIFO), or First-expires-first-out (FEFO) protocols.

LIFO, for instance, is commonly used for higher rotation of goods, and it enables fast-moving of goods in the warehouse which is a cost-effective use of space. On the other hand, FEFO is an efficient protocol being used for goods that have short expiration dates or are easily perishable. Also, it is excellent for traceability. These are some glaring examples, and in reality, storage policies are defined in every warehouse depending on your special requests and procedures, with the same common goal – to optimize floor space.

In that regard, WMS is a flexible system that simultaneously enables storage of the exact goods in the best warehouse location and for staff to pick the exact items that should be picked.

2.   Inventory management and tracking

After you implement WMS, you’ll gain a solution that supports maximum inventory accuracy and visibility across the warehouse, in real-time. WMS has automated procedures, and the automation is supported with hardware devices like RFID or barcode scanners. Their use on every step in the warehouse enables detailed tracking of all goods. It also reduces lost, forgotten, or misplaced items in the warehouse.

The tracking process begins with the initial item scan when receiving the goods. You’ll get confirmation about the exact items that arrived at the warehouse. After the initial scan upon arrival, all future actions with the items are followed by a barcode scan on the current item location. That includes scanning while placing the item on the transport unit, moving the item in the warehouse, and shipping.

The scanning procedure helps WMS know the exact location of every item in the warehouse. You will know in which warehouse (if there are more than one) the item is located, which line on the warehouse floor, which transport unit, and on which exact location the item is placed.

The time your staff spends on product search is minimized and at the same time, the errors will drop and productivity rise.

WMS doesn’t have to be warehouse-bound. You can integrate WMS with the existing ERP solution. The whole company can then have insight into exact inventory status in real-time. An accurate inventory list leads to better planning and more in-tuned flow from manufacturer to user or client. You can anticipate supply and avoid back-orders with this information, resulting in more satisfied users.

3.   Better staff efficiency

Staff labor and costs associated with that are among the highest expenditures in a modern warehouse, and utilization of their work is among the essential features of WMS. There is more than one-way WMS can help with increased employee productivity. Automation and working with barcode terminals eliminates all of the paperwork leaving more time for the core tasks of your staff.

Advanced WMS features will make the connection between incoming tasks and employee skills and availability. Such interconnectivity allows the right person to get timely tasks, optimize travel times through the warehouse, and ultimately increase productivity.

The system can automatically assign employees for specific tasks, but the warehouse manager can also manually address the worker’s ticket for incoming orders.

Another way WMS will help with more efficient labor includes the barcode scanning mentioned above. It eliminates the need for double-checking, increases the accuracy of the processes in the warehouse, and automates data input. These things lead to increased productivity and reduced time needed for double-checking, which is still common in the paper-managed warehouse. 

You’ll also get detailed analytics about your staff performance. By using various reports you know how many items they picked during the defined time period or how many orders were finished on the exact date.

WMS hugely increases staff productivity, leading to direct savings to your business.

4.   Automatic inventory and invoice tracking

WMS could be integrated with other business software solutions like ERP software, which means all documents are automatically transferred between these two software business solutions. That means all the “paperwork” and document creation is automated, and these two systems are working together flawlessly. 

To give you an example, let us look at incoming orders from the buyer. The order arrives in the ERP solution, and it is automatically being transferred to WMS. Based on the outgoing order, the ticket is assigned to one of your staff workers, and he/she starts with picking. After the order is finished and packed, the process ends with the automatic creation of delivery notes and sends all data into TMS (Transport Management System) that tracks deliveries to the customer. 

With such automated processes, you can handle paperwork like orders and invoices much faster. More seamless and accurate service means fewer user complaints, which is crucial for customer retention.

5.   Lower operating costs

For most companies, the main driving force behind WMS implementation is increasing warehouse efficiency and cost reduction. You can save money or cut costs with WMS in many ways. Overall cost reduction is manifested cumulatively through multiple features and benefits of this advanced software solution.

Productivity increase is among the most glaring benefits. When you implement a quality-designed WMS, there is more than one way to reduce costs in the warehouse. The advanced managing system in WMS increases the flow of goods, utilizes staff and machines workday, resulting in better productivity and more savings.

The aspect of movement optimization means less money is spent on the amortization of warehouse machinery and tools, fewer papers, and other consumables. All necessary data is noted automatically into the system, and there is no more extensive paperwork.

Thanks to barcode tagging of goods, with highly accurate inventory lists, perishable goods are picked on FEFO (First-expires-first-out) principle by leaving the goods with the longest expiration date in the warehouse and eliminating ones that are going to expire soon. You will reduce waste and eliminate unnecessary costs.

Another way WMS optimizes the utilization of warehouse space is by storing pallets and goods optimally on the warehouse floor. You use more space and increase productivity with a similar amount of effort.

With the better flow of goods through the warehouse, the company will have more deliveries with fewer employees. It will positively affect the whole business. Already mentioned WMS – ERP integration raises the efficiency of the entire organization due to timely information distribution.

There are a couple of other ways WMS can reduce costs:

– There are no more miscalculated amounts of goods in the warehouse. WMS is superior in Inventory tracking, and you can have significant savings with fewer lost items in inventory.

– Item availability – WMS will warn you if you have little or no goods in the warehouse to place a timely order to eliminate out-of-stock situations. In the end, your buyers don’t need to look elsewhere because you will always have items for sale, which improves inventory availability.

– WMS can help when you’re dealing with many suppliers, enabling more diverse offers for the users. You can manage clients with a few clicks in the system.

– You can also integrate carriers in the system, to track the goods once they leave the warehouse until the arrival to the final recipient.

Savings as a keyword

Some of the essential WMS benefits include warehouse processes optimization, better workflow, and moving goods through the warehouse, directly influencing productivity and lowering costs. WMS also eliminates huge paperwork chunks, automates several accompanied processes, makes worker and machines movement optimization. The same goes for storing goods in the warehouse.

A more accurately run warehouse leads to more precise inventory insight, faster delivery, and an improved supply chain. You will save money with higher utilization of working hours, less paperwork, and optimization of warehouse storage space. You can also enhance your revenue through faster and more efficient deliveries, reducing customer complaints, and moving goods with the same resources.

In case you’d like to find out more, contact us and we’ll provide you with our consultancy.

If you’re managing your warehouse using Excel spreadsheets, or even worse, with pen and paper, and you’re constantly dealing with inventory nightmares or missing items, it’s time to explore WMS solutions.

A Warehouse Management System (WMS) is a software tool designed to automate and track all warehouse processes. With a goal of achieving 97% inventory accuracy, a robust WMS manages everything from receiving goods, put-away, picking, packing, and shipping. By implementing a software solution that monitors, automates, and optimizes all warehouse processes, you can enjoy numerous benefits, some of which we’ll discuss below.

What are the essential features of WMS?

Picture a well-organized warehouse with no paperwork, where items are neatly sorted and stored. Everything is automatically placed on shelves in the right order and tracked using barcode scanners. Say goodbye to lost items and confusion, as the entire company can now access real-time inventory information.

A Warehouse Management System (WMS) monitors the flow of items within the warehouse. While it shares some features with ERP software, WMS typically integrates with external ERP solutions. As a result, departments like sales, marketing, procurement, and others can access real-time inventory information, streamlining their tasks and enabling more precise planning.

Main features of quality WMS:

– Streamlining all warehouse operations, including receiving, put-away, picking, packing, shipping, inventory checks, and more.

– Seamless documentation workflow, with automated integration into the organization’s business software (ERP).

– Enhanced workforce management through workflow optimization, improved goods flow, and error reduction.

– Utilizing barcode terminals for receiving, tagging, and picking items, while storing real-time information in a centralized database.

Types of WMS solutions

WMS is typically an independent software solution that can be connected to other business intelligence systems, such as ERP systems. For instance, if you use SAP ERP, it can be integrated with your chosen WMS system to facilitate seamless data exchange.

Another type of WMS is a module within an existing ERP system. The main drawback of such an add-on is that it lacks the advanced features and customization options available in standalone Warehouse Management Systems, potentially limiting its ability to meet all your operational requirements.

Although some smaller organizations still rely on spreadsheets, WMS has become an essential component of modern warehouses for SMBs and corporations alike. WMS solutions are scalable and modular, designed to be customized for each company’s needs, making standalone WMS software the preferred choice for many businesses.

Standalone WMS can adapt to the company size, warehouse complexity and specific warehouse processes, which can help you grow your business and scale more easily.

Main benefits of WMS

Warehouse workflow and process automatization bring numerous benefits you might miss at first sight. To give you a better overview of how WMS can help your company, we made a list of such solutions’ top advantages.

a) Reducing costs and optimizing space

WMS is a smart system that monitors all warehouse processes and offers the best solution for maximizing storage space efficiency. By analyzing item movements and storage locations, you can make informed decisions on the optimal placement of goods for efficient movement. This saves valuable storage space and minimizes the time spent on warehouses tasks.

Other areas of optimization

– Improved warehouse space utilization,

– Timely and accurate item delivery, resulting in fewer shortages or excesses of goods,

– Reduced time spent on employee training and onboarding,

– Quicker picking and packing, and no more searching for misplaced items.

These improvements lead to decreased operating costs and a smoother flow of goods through the warehouse.

WMS can also enhance item movement by implementing standard protocols such as first-in-first-out (FIFO), last-in-first-out (LIFO), and first expires-first-out (FEFO).

No matter how complicated your processes are, WMS will help you with automation and therefore reduce your costs in the long run.

b) Real-time inventory visibility

WMS enhances the accuracy and visibility of your inventory, all in real-time. By generating various reports, you can know the exact quantity of each item in your warehouse. This level of precision and transparency is achieved through barcode scanning of every item and location within the warehouse. This reduces the number of lost items and improves inventory accuracy. Integrating these accurate metrics with your ERP boosts efficiency and decision-making across the entire company, not just within your department.

c) Labor efficiency

WMS automates task assignments to the appropriate warehouse workers. In addition, optimizing travel time within the warehouse is one of the most significant benefits WMS offers to improve labor utilization. By determining the best picking method, you shorten the path between points A and B, increasing your staff’s efficiency. You can even analyze your goods and rearrange your warehouse layout so that high-demand items are closer and quicker to pick and pack.

Elimination of paperwork and introduction of barcode terminals enables employees to work efficiently and to focus only on their core tasks, and at the same time decreasing errors in picking and packing.

d) Serialization and item tracking

Items in the warehouse can be easily tracked using their serial number and their batch, for example, their LOT number. In this way, if you manufacture from raw materials, you can track the entire process, from raw materials to the finished product, and the serial or LOT number will indicate which items the finished product is made of.

WMS can assist with tracking and connecting items to incoming orders, providing you with a better overview of the flow. It also contributes to planning and resource allocation. You can reduce costs with real-time, detailed inventory insights, avoiding unnecessary orders or lost items.

e) Enhancing the supply chain

The Warehouse Management System impacts the entire supply chain through its automation capabilities. Processes in the warehouse, from incoming goods and paperwork to delivery, are streamlined and automated. Precise and speedy shipping, combined with the elimination of unnecessary steps, boosts efficiency and reduces costs. Implementing WMS can also strengthen partner relationships by enhancing supply chain performance and providing better service to your clients.

f) Reducing operational costs for warehouse equipment

A warehouse utilizing WMS experiences significant automation, which lowers the burden on both the workforce and equipment. This leads to cost savings on equipment depreciation, reduced electricity and gas bills, and a decrease in the use of materials like paper.

Additional benefits of WMS include an improved user experience through accelerated workflows from order placement to delivery, as well as ongoing optimization of warehouse processes based on insights gathered from reports.

Who is using WMS?

If you’re curious about which industries utilize WMS, the answer isn’t tied to a specific industry but rather the size and complexity of the warehouse.

Distribution companies, 3PLs, retailers, manufacturers, and other trading businesses employ WMS. Warehouse Management Systems are highly beneficial in industries such as food, electronics, textiles, tobacco, and any other sector that manages large inventories.

The need for a WMS arises when you struggle with managing your inventory effectively and have outgrown the use of paper or Excel spreadsheets.

WMS scalability enables even smaller businesses to adopt high-quality solutions and streamline their operations, preparing them in advance for business growth and enhancing their ability to scale.

Conclusion

The Warehouse Management System offers a multitude of advantages. A top-notch solution assists in automating standard processes within the warehouse, providing real-time insights into workflows and inventory management.

Improved equipment and workforce utilization, as well as enhanced space management, are among the key benefits.

WMS is a versatile business software that delivers comprehensive statistics and automates data exports for all departments, such as accounting and sales.

If you’re interested in learning more, please get in touch with us, and we’ll gladly provide our expert consultation.

What is a modern Warehouse Management System? If we consider the warehouse as the essential part of company logistics, WMS is its software necessity.

Historically, warehouses were managed via pen and paper. After that, the first computer upgrade included Excel spreadsheets, and digital transformation brought software solutions that manage processes and workflows in the warehouse, such as picking, order fulfillment, and delivery.

Increasing efficiency and cost-effectiveness are the main ideas behind Warehouse Management Systems. WMS has in-depth data analysis, reporting, voice control systems, connecting with other business intelligence systems, and some additional hardware components like RFID or barcode readers to achieve these improvements.

There are numerous benefits of the WMS solution, and we have five crucial reasons you should invest in a Warehouse Management System.

1. Real-time inventory control and management

If you need to check the inventory status manually when someone asks about it, maybe it is time to invest in a WMS.
Professional modern WMS improves inventory control – you will have less stock, improved order fulfillment, and reduced order cycle time.

You can achieve these benefits by tracking every unit in the warehouse to the tiniest details. Tracking inventory with barcode scanners, you will know the type, series, and correct item name for every item in your stock. All information is uploaded in real-time into the system, leading to much faster and more efficient inventory management. At every moment you are able to check which items are low in stock, and which ones are overstocked, so you can make better business decisions.

The entire company has an overview of the current warehouse stock inventory because WMS is connected with other business intelligence software like ERP.

2. Better employee efficiency

Staff salary is among the most significant costs in the warehouse. With all automation, your employees are still a crucial piece of warehouse operations, and with WMS, you can optimize and utilize their efforts.

WMS will enable better efficiency, quality control system and speed up the product warehouse lifecycle. The first step in increased efficiency is the reduction of paperwork and manual lists. For even the smallest warehouses, relying on pen and paper processes can slow down the picking process. When you put away inventory without a verification scan, you’re more likely to make an error in data recording – which then must be corrected during the picking process. As said before, automation will eventually lead to fewer human-made errors. Also, you must ensure your staff is working in the smartest possible way to fulfill every order.

Movement and individual employee’ efficiency analysis leads to better movement patterns. WMS will enable upfront ideal picking routes through the warehouse so each staff member can cover more ground more effectively. Also, after doing a proper analysis of the movement of your goods, you will be able to better set up your warehouse layout, meaning all goods that are spending a minimal amount of time in the warehouse, i.e. are fast-moving, should be stored closer to the exit zone. That way, your staff will spend less time walking and have more time to focus on their crucial tasks.

3. Better user experience for your clients

Too many complaints to the customer service can damage your or your clients’ company reputation. Even worse, it can cut your or their revenue. When sales don’t have accurate info about inventory, the company can experience a delivery backlog, or even worse, you can run out of stock. If you have a faulty system for order fulfillment, you can send items to the wrong address or send the incorrect quantities.

Quality Warehouse Management System will alleviate most human errors and enable inventory control best practices. Software solutions using scanners will lead to detailed real-time data and improvements in warehouse accuracy almost up to 100%. Every person in your company will be able to know the exact amount of inventory, which helps you with your orders.

Reliable inventory management will result in a better user experience, fewer customer service complaints about late, inaccurate, or missing deliveries. That way, your relationship with your customers or clients will be on a higher level.

4. Warehouse space optimization

WMS tracks item flow in the warehouse. You know the exact position of every item on the shelf, in which row they are, and in what part of the warehouse, all of that in real-time. All changes, including picking, transferring, or counting, are noted in WMS. Tracking improves picking and inventory accuracy and reduces possibilities for errors.

WMS has many unique features like intelligent picking, rotation of goods, commissioning, and automatic consolidation to maximize storage space. The most important of these is directed put-away. Whenever you are receiving some goods, WMS can tell how and where to put away every exact item. There are many different rules for put-away. For example, you can use fixed or dynamic locations. Fixed locations are used for a specific type of item, which benefits in better organization of your warehouse layout and speeds up the putaway process since staff knows in advance where those items should be placed.

Dynamic locations, on the other hand, involve storing items in the first available, temporary location that a warehouse can find. It’s quick and versatile and has to have a real-time WMS implemented. Real-time information and advanced software-managed methodologies for moving goods through the warehouse can utilize expensive storage space with more efficiency.

Simultaneously, management and other company departments will all have needed information about warehouse utilization as the changes happen.

5. ERP integration and ROI

Quality Warehouse Management System can easily connect and integrate with your Enterprise Resource Planning (ERP) solution or other business intelligence software your company uses. There is no need for extra steps for integrating data from WMS to other company systems outside of the warehouse. Once integrated, data flow is automated and documents are exchanged in real-time.

By investing in WMS, you will for sure witness a positive return on investment. WMS influences sales and increases profits in a simple way. You will sell faster and more accurately, and customers will be more satisfied. Simultaneously, warehouse workers can store goods more efficiently, spend less time on their job, and make fewer mistakes. All these factors lead to increased profit margins and lower costs.

Investing in the software warehouse system

WMS is a software solution with hardware components. It’s important to check whether your WMS provider can provide tailor-made solutions for your warehouse and your specific needs. Every warehouse is different, and you should be able to cover all your processes with your new software.

Warehouse management is an essential part of logistics for every serious company. It’s a missing piece that enables improved accuracy and efficiency. Better warehouse management leads to business improvement on a company level and in the supply chain from manufacturer to delivery.

An efficient warehouse directly influences customer satisfaction, and higher efficiency leads to cost-cutting, which are crucial keywords for company management.

If you’d like to find out more, don’t hesitate to contact us.