When it comes to getting your budget approved for the purchase of a new warehouse management system, there’s nothing more important than being able to show its return on investment. Determining how the WMS will benefit your organization in both the short- and long-term puts concrete and quantifiable evidence in your corner to support your cause.
Last week, we deeply examined why quantifying a warehouse management system’s ROI is important to getting the budget for your new WMS approved, so now let’s take a look at the ways upgrading to a new cloud-based WMS will actually help you realize that fast return on investment. The four that follow will help you easily determine how valuable a WMS will be for your organization:
You’ll have the right amount of product stocked at all times, without having to worry about shortages or storing too much. Inventory management features in a WMS will keep you in the know at all times. Managing your inventory more effectively will help you limit other costs associated with doing business. You can get discounts for buying items in bulk when you know you need to store that many, and can consolidate orders from vendors for reduced fees.
A new WMS will also raise your accuracy levels around the warehouse. Think about the amount of inventory you mark as lost by the end of the year, or returns you have to handle due to miss shipments. A new WMS can increase your accuracy levels to the point where those needless expenses may become nonexistent.
A new cloud-based WMS also opens your warehouse up to the latest technologies to manage your inventory. Quick and easy integration with smartphones, tablets, voice picking systems, and robotics can help take your warehouse to the next level. Just look at the benefits of being able to add voice picking to your WMS:
Through effective space management, you can streamline processes around your warehouse, reduce the amount of travel your labor has to do throughout the day, and increase the overall efficiency of your operations. Better space utilization has a secondary benefit to your warehouse. Your equipment will be better managed, reducing wear and tear, and increasing the longevity of your assets. Your equipment becomes more efficiently used, requires less movement throughout the warehouse, and will be used by those specifically trained to use it, instead of laying around for the entire warehouse to use for things it may not be able to handle.
Labor constitutes the single largest operating expense for most warehouses, making it the obvious place to target for ROI gains. A new WMS will help maximize production levels and minimize costs. Having the proper tools in place allows you to determine accurately whether or not your employees are being productive and earning their pay. New warehouse management systems also empower your workforce with multilingual technology, giving every employee everything they need to maximize their potential for greatness.
Reducing your labor costs by up to 25% in your warehouse is not out of the question for most organizations with proper labor management tracking and reporting, meaning the ROI from labor-management alone can quickly justify the cost of a brand new WMS.
A new warehouse management system’s proficiency in complete tracking within your supply chain enables your organization to be more accountable and compliant. From maintaining lot control and keeping tabs on expiration dates, transparency within your supply chain can go a long ways towards minimizing financial and reputational losses in the event of a recall.
For a 3PL, built-in billing capabilities will help you uncover hidden revenue that you may be missing with your current billing processes. Achieve lightning fast RIO through real-time monitoring of the cost of services provided for each client, accurately charging assessorial fees, and ensuring that the space on your floor is being utilized in an optimal way. Not so hidden inefficiencies such as having long service-to-invoice and service-to-revenue time can also be greatly improved. Bills are easier to create so you can send them out earlier, and (hopefully) be paid earlier, too. You’re able to bill each client on their terms and meet their requirements.
Each of these benefits of a new WMS adds up to equal an enormous ROI driver: increased sales. We’ve already shown how your supply chain plays the most important role in your organization’s customer satisfaction levels. By efficiently managing your supply chain through a new and more effective WMS, your business will increase its customer satisfaction levels. You’re better able to get the right thing to the right place at the right time. In turn, this should increase the amount of referral business you receive and ultimately have a tangible impact on your overall sales.
What better way to get a return on investment than by boosting your revenue and cutting your costs?
Related WMS Budgeting Blog Posts
- WMS Budget Series #6 - How to Get Approval for Your WMS Budget
- WMS Budget Series #5 - Don’t Be Fooled by Fake Cloud WMS Technology
- WMS Budget Series #4 - What Costs Are You Forgetting to Add Into Your Cloud WMS Budget?
- WMS Budget Series #3 - 3 Questions to Ask Before Finalizing Your WMS Budget
- WMS Budget Series #2 - How Your Budget Predicts Your Revenue Potential
- WMS Budget Series #1 - How to Budget for a Cloud Warehouse Management System