Inventory management, picking, barcoding, and counting … all of these are important aspects of warehouse activity, and if you have pain in one of these areas, it tends to affect your entire company and its customers. But what is the best way to solve this kind of problem?
As with most of these questions, the short answer is that “it depends.” While there are many aspects to effective warehousing and inventory management, several fundamental questions appear consistently:
Sounds simple enough, right? But many times, and for many reasons, it isn’t. Whether you inherited your current situation or saw it develop over years, the question that must be answered first is, “What is the expected return on the investment you make in warehouse automation?”
As a first step and an important discipline, let’s look at the areas that tend to drive the largest and most quantifiable ROI opportunities.
OK, so if you have read this far, it is a pretty safe bet you recognize some of these issues. Now, what should you do about them? Warehouse solutions come in a variety of levels of complexity and price points. Which one makes the best business sense for your operation? In my experience, this can be a simple math equation.
Reread the impact of the problems listed above. Take your time. Truly determine the cost of each of these events. Then look at the financial impact on your company if most of them (maybe all) were resolved. Now you have a sense of what you might be prepared to invest in a solution.
From this point, I will assume you run at least an ERP system, but more specifically, I will relate options that exist for users of Microsoft Dynamics.
The first option is to utilize the built-in functionality for warehouse management. All the basics are included in Microsoft Dynamics 365 Business Central. Innovia has many customers that use this functionality very effectively. Your investment in this functionality can range from $10,000-$25,000 (depending on the number of users). Its specific features include
The second option is leveraging an ISV (Independent Software Vendor) solution. There are many that either build and/or supplement the existing Business Central functionality. The advantage of this level of warehouse automation is that the investment is reasonable and the additional functionality tends to benefit day-to-day users. The user interface is more friendly, making for quicker adoption. Some of the solutions that fit in this category are listed below with links to learn more about them. Expect to invest somewhere in the range of $15,000-$100,000 (depending on the number of users).
Your third option is to purchase a Tier One style WMS system. As the name suggests, these solutions bring much more robust functionality, but they also require a more significant investment. Depending on your ROI math and desired functionality, these solutions may be a great option. Investment range: $200,000-1,000,000+
I hope this exploration of the different types of warehouse solutions has brought you some clarity on what path might work best for your business (or at least given you somewhere to start). It all comes down to choosing the level of investment that matches the business problem you are trying to overcome. If you can do that, you’ll be in great shape.
As always, feel free to reach out to Innovia if you have additional questions about this or any other topic.