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Warehouse Management Blog

Our team of Fulfilment Consultants share warehouse management best practice and advice.

When to implement a warehouse management system

WRITTEN BY Jonathan Bellwood /

14 May 2015

1. Increasing Order Volumes

Using a manual system in your warehouse is fine while your eCommerce company is still growing. There reaches a point, however, when you have to upgrade your warehouse management software if you hope to scale up and grow.

Identifying when you have reached that point is not always easy, so we have put together a list of identifiers that signal it’s time to make the change.

If, on average, you are receiving above 300 orders, you’re probably ready for a warehouse management system (WMS) upgrade. Why? Because after this level of orders, you will either start to lose control, which leads to errors being made, or, if you are just about coping, it most certainly won’t scale up.

When it comes to peak season in particular and orders increase past the daily average, you will find it hard to fulfil them with the maximum amount of care. Any mistakes made will lead to a bad customer experience which is toxic to your brand.

[Related: Two ways to fulfil orders like Amazon]

2. People

When you’re starting out, or perhaps when you’re receiving less than 300 orders per day, having up to three people working in your warehouse is probably enough. Naturally, when you start to receive more orders, as we’ve explained above, you might consider bringing in more workers to take on the load. The more workers you add the more time you have to dedicate to training them on how your current system works.

The right warehouse management software for eCommerce should be so easy to use that new operators can be trained in less than half an hour. A client of ours in the fashion industry needs just fifteen minutes to train a new operator to pick and pack correctly.

3. Print runs

Typically, a print run, where all of the website orders are printed, is done every 3 hours or so in eCommerce. In a manual warehouse where paper keeps processes moving, it can take lot of time to sort through all of these orders, particularly if your business is on the up and you’re bringing in a considerable number of orders per day.

If it’s taking you more than 30 minutes to sort through the invoices for each print run, it’s taking up too much of your time. By upgrading to a warehouse management system that is dedicated to eCommerce, print runs are unnecessary as the invoice is simply printed at the end when the order is being packed.

4. Reliance

Gerry, your loyal warehouse manager, is jetting off to Madrid for his well-deserved summer holiday. He’s going to be out of the warehouse for seven days and is switching his phone off for the entire time. Now ask yourself this question: Will your operations still run without him?

If the answer is no, then you have become much too reliant on your warehouse manager. People get sick, they go on holiday, or they simply need to take time off. If you want to keep your business alive during these occasions, it’s important to have a warehouse management system in place that will not make the manager’s role redundant, but will ensure that orders still get out the door correctly and on time.

5. Productivity compared to same time last year

In business, it’s generally a good sign if, on the line graphs in board meetings, everything points upwards. Unless you’re measuring employee errors, in which case you’d hope that graph is a flat line along zero. Simply put, year over year, you have to be doing better. Getting worse is not an option and staying the same is not good enough. To succeed in such a competitive environment, only the best have a chance.

[Related: 11 motivational hacks for your eCommerce warehouse]

As such, if your employee productivity is less efficient per person, per unit despatched than the same time last year, it’s a clear sign that your current system is not scaling up with your company and is in need of an upgrade. A good target to aim for (based on the fashion industry) is having approximately 25 items shipped per working man hour, excluding those doing replenishment and the warehouse manager, but including all team leaders.

Using a table like the following to calculate productivity per person might be of use.

6. Succeeding at peak

For some retailers, memories of Black Friday 2015 still wake them in the night, a cold sweat making their nightshirt cling to their back. For others, it was a glorious day where old stock got shifted to make way for the new Christmas stock. Luck plays no part in this success as any retailer can make peak seasons, including Black Friday and Cyber Monday, work in their favour.

In order to really prepare for peak, and by this we mean prepare to do exceptionally well not just to stay afloat during, a warehouse management system upgrade really should be considered. Goods in can be received faster, items can be picked more efficiently and with less errors, and orders are despatched promptly.

[Related: MetaPack Delivery Conference 2015: Managing demand at peak]

7. Hiring at peak

It’s not uncommon, when it comes round to peak season, for retailers to hire 50% more staff to cope with the increase in orders. This requires hours of training which takes up the time of your current employees right when it’s most valuable. On top of this, you will likely be bringing these new workers in before peak hits, to train, and hoping they will stay on to when you need them. The churn rate for warehouse operators is generally quite high making this somewhat of a risk.

With a warehouse management system, not only would training be much easier and quicker to complete, bringing in new staff might not even be necessary at all. With the right software, and competent users, it is possible for an eCommerce retailer to get through peak successfully on the same number of staff as normal.

8. Slow website

Without a warehouse system in place, it falls on the website to handle several functions more than what it should. Applications get written inside the website to carry out actions like printing pick lists, manage carriers and stock level management. Having these functions built into the core website can severely impact the load speed which negatively affects conversion.

By separating these applications from the website and running them on a dedicated system instead, you will keep your website focussed on doing what it should be - attracting customers into converting.

[Related: 7 eCommerce flaws driving your customers away]

9. Location, Location

As we’ve stated above, often certain functions are managed through the website, such as stock location in the warehouse. This is fine so long as you have a warehouse big enough to have separate locations per stock keeping unit (SKU). However, it is generally more efficient, and unavoidable sometimes, to store multiple SKUs in a single location, or have single SKUs in separate locations.

If stock locations are managed via the website, these instances are not allowed to be input. As such, time is wasted finding new locations for separate SKUs, and space within the warehouse is not optimised. By upgrading to an eCommerce warehouse system, stock can be stored anywhere in the warehouse, so long as it is scanned into a location.

10. Oversells. Oversells everywhere.

Using a manual system means that inventory levels on the website and across marketplaces are not live. If this is the case then it becomes much too easy for the wrong figure to be entered online, leading to oversells or missed opportunities. If the number of oversells you do is greater than 0.3% then you have an issue.

A warehouse management system upgrade should provide you with 99.9% accurate stock figures which update to the website live. That way, any stock that is for sale in the warehouse will be available to purchase online, with no mistakes made.

11. Geography

It is not uncommon for the warehouse to be located away from the office in which the administrators work who carry out the purchasing and returns. In a manual paper warehouse, when returns need to be processed the procedure is slowed down by transferring documents and crossing to separate buildings.

Warehouse software keeps everything online so refunds can be seen and actioned much quicker, creating a more positive experience for customers.

[Related: 5 time-saving hacks for eCommerce business owners]

12. Shifts

In a typical eCommerce warehouse, there are normally two shifts running from, say, 6am-2pm and 2pm-10pm. In some cases there may be an overlap of an hour for the transition of workers. If you’re thinking of adding in another shift to handle an increase of orders, it may be worth first considering a warehouse management system upgrade.

With a WMS there shouldn’t be a need for an extra shift because the current workers’ time would be managed much more efficiently. Operations can be completed much quicker without sacrificing accuracy, meaning that operators can pick, pack and despatch more orders, and warehouse managers can save time training and double-checking orders.

Key takeaways

>> If you find yourself spending too long on certain tasks, consider the benefits of a WMS

>> Reduce the number of mispicks, oversells and bad customer reviews

>> Save time and money training and/or hiring new staff

>> Make the best use of all space in your warehouse

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