Cost vs. Benefit
As a business owner, and the decision maker, you want to ensure that the benefits of each investment you make in the company outweigh the costs. All successful businesses take the time to consider the cost but the most successful businesses can look past the cost and see the return. This post will lay out some of those details as you consider investing in a warehouse management system for your business.
Is a Warehouse Management System “too” expensive?
The cost of a WMS is going to vary a great deal depending on the number of users and the size of the facility, but will typically start at $100,000. So, it’s safe to say the majority of people in the market for a WMS would consider that cost to be expensive, but does the expense outweigh the cost?
Would you believe that the typical break even point for a properly installed WMS is less than 2 years? The reason for the quick return is wrapped up in the immediate benefits of having a WMS in place which translates directly to money being saved! Many companies with a properly implemented WMS express that they would never go back to working with a paper-based system.
Below, we’ve outlined three main benefits that provide an immediate ROI within your operation.
Benefit #1: Data Entry
The first tangible benefit of a proper WMS is that the traditional data entry process goes away. That means no more paying someone, or multiple people, to sit at a computer and transfer data by hand from a sheet of paper into your business system. The recording of information now occurs out on the warehouse floor by the warehouse personnel as they do their normal job, so you are working off of real-time information in the office.
Benefit #2: Productivity Improvements
Our customers typically see a 20% improvement in productivity for warehouse personnel and managers, which is huge. This improvement comes from three main areas – Improved Inventory Accuracy, System Directed Activities/Tasks, and Accountability.
When you achieve 90-95% true inventory accuracy, most of your exception handling and fire-fighting efforts will be eliminated in the warehouse rather than the office. The WMS is also directing the activities and tasks of personnel which means automatically notifying employees of their next task. That means no more walking back and forth from the shipping office to see if there are more orders to pick. Finally, the WMS automatically tracks what each employee has completed throughout the day creating more personal accountability across your entire team.
Benefit #3: Shipping Accuracy
Another tangible benefit of a proper WMS is the reduction of incorrect shipments, which cost both you and your customers a great deal of time, effort, and money. There are various studies that calculate this cost to be anywhere from $200-$500 per missed shipment. In addition to the monetary value you will be saving with a working WMS you will increase trust with your customers. Knowing that their order will be correct and on time is a huge factor in developing repeat customers which allows your business to continue to grow.
It’s time to consider a WMS.
While we laid out some solid examples of immediate benefits above, we didn’t even begin to touch on all the ways a WMS will improve your day-to-day operations. Things like training new employees, improved morale, and a clear picture of your operation through an Executive Summary are some of the additional benefits you can expect to see. With all these benefits of having a WMS the real question becomes, “Is NOT HAVING a Warehouse Management System too expensive”?
We’d love to help explore the possibilities of how RF Navigator, our revolutionary WMS, can transform your business and make it the best investment you’ve made.
Have Questions for Us?
Give us a call at 800.353.2520 or contact our team at firstname.lastname@example.org