There are many problems associated with running a warehouse on a paper based system. One of the biggest time wasters when depending on paper is the fact that the information on the paper itself may be outdated or incorrect. This creates what some call “the paper chase”. This means that someone needs to locate the outdated paperwork from the warehouse and replace it with the updated paperwork each time changes are made throughout the day.
Another problem with paper based warehouses are that they typically operate with inventory accuracy rates from 40-60% based on true inventory accuracy not dollar accuracy. Humans make mistakes - they grab the wrong product, they put material in the wrong location, they make small mistakes that end up costing big in the end. When you perform a physical inventory and analyze the variances you will likely see that a high percentage of your items are off. These ongoing inaccuracies lead to teams of people having to spend valuable time looking for out of place products rather than performing the duties they were hired for, and we all know that time is money.
Problems with Cycle Counting
Another major issue with paper-based warehouses is created because of the difficulty of cycle counting. It is virtually impossible to cycle count accurately in a paper-based operation because activity is constantly occurring that impacts the quantity of inventory. To cycle count accurately in a paper-based environment, some type of "freezing" of inventory counts needs to occur. When this “freezing” takes place, the reconciliation of the inventory becomes burdensome and most warehouses’ intentions to cycle count fizzle out.
Training Employees & Labor Costs
For paper-based warehouses, the time and expense it takes to train a new employee to be productive is a huge investment on the front end with no guarantee that they will be a good fit. In many cases it may take weeks or months to get a new employee up to speed to work on their own. In today's world of low employment and high turnover a lot of time is wasted on training new hires who may or may not work out long term. This is another major setback for the paper-based warehouse.
Finally, in most operations one or two employees check shipments to ensure their accuracy. While this can alleviate the incorrect shipments, it requires the extra labor cost to perform these checks.
There's a better way...
The real-time nature of WMS combined with scanning and system directed activities help fix all of these predicaments, allowing you to focus on proactive growth rather than reactive problem solving.
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