A supply chain director for a large global manufacturing organization recently told our team, “We have invested heavily in successfully managing inventory and are utilizing our warehouse management system [WMS] to drive our digital transformation efforts and optimize our supply chain.” This response led to an internal discussion as to whether solely relying on a WMS would create a connected supply chain that provides full inventory management capabilities, delivers operational excellence, and is the focal point of a digital transformation.
WMSs are designed to control and manage the day-to-day operations in a warehouse. How they do this depends entirely on why you bought it. Some supply chains may just require the automation of a simple pick, pack, and ship process. Others may need a comprehensive solution that integrates with IoT/M2M devices and provides detailed labor management reports. Whatever the reason, any successful WMS aims to create a paperless environment that optimizes the productivity of warehouse staff and speeds up order fulfillment.
So, what about inventory, like bolts or bricks, used on a job site? Or medical devices, such as trunk stock, in a sales rep’s car? Or seasonal stock being stored in a pop-up or on-demand warehouse during a busy period? In these examples, can a WMS tell you what inventory you have and where it is in real time?
The simple answer is: no, it can’t.
While a WMS can be a very powerful tool when it comes to extended inventory management, some of its downfalls mirror those of traditional ERP systems. Traditional ERP systems fail to meet inventory management requirements, which are centered around a lack of agility, flexibility, and cost. This is very much the same with a WMS. Because they are built on 30-year-old principles, WMSs are very rigid. They aren’t able to manage inventory outside the walls of your warehouse and require being online all the time to operate— such as for barcode printing, IoT, and M2M. 3rd party solutions are often needed, creating a more complex environment.
Since a WMS alone can’t provide the extended functionality needed to achieve inventory management excellence, the two questions supply chain leaders need to answer are:
Successful inventory management delivers operational excellence and is much more than simply knowing the amounts of raw materials and finished goods you have and their movements in the warehouse. Inventory is an asset and as such, it is tracked and recorded on a balance sheet which determines how profitable your business is which can be crucial for investment and financial success.
Looking to achieve operational excellence? Our team of supply chain experts are ready to answer your questions and provide a roadmap for success.
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