8 ways WMS software helps 3PL cut costs
A third-party logistics or 3PL entity provides various fulfilment services to a company. These may include warehousing, inventory management, distribution and shipping. By outsourcing these tasks, businesses can strengthen their supply chain and focus on expanding their goals.
A 3PL company must possess advanced tools and exercise best practices to grow and broaden its customer base. To attract more clients and retain the existing ones, you must show that you’re a reliable partner capable of delivering the best service. Besides attracting top talents, having WMS software can help you reach this goal.
Technological tools can do more than automate your system. Below, you’ll find eight WMS software benefits to help your company minimise spending.
1. Reduce labour costs
The best WMS software allows your 3PL company to increase its efficiency levels, as multiple workers aren’t needed to perform repetitive manual tasks. This software can create a more systematic way of picking and arranging the products in the warehouse. Additionally, it can map out the most efficient placement of individuals and the manner of selecting and placing items in the shortest time.
2. Enhance productivity
One of the most time-consuming tasks is creating, filing, searching and updating paper documents. With WMS software, the employees are freed from spending hours performing these tasks.
Instead of looking for forms to fill in or scouring multiple folders and file cabinets, warehouse workers can create files with a few clicks and find what they’re looking for within a few seconds. Essentially, WMS software is a productivity-enhancing business solution that increases the time spent by staff on core duties. This means you’re paying for work that’s aligned to their responsibilities.
3. Minimise operating costs
Besides increasing productivity and efficiency levels, reducing paper use and selectively printing documents can save 3PL companies a great deal of money. Moreover, without needing a vast document and records storage area, WMS software can help logistics service providers maximise their space for goods storage. This means no money is wasted on renting excessive rooms that don’t generate revenue or keeping products longer than you should.
4. Optimise warehouse space
According to Storefront’s digital marketplace estimates for retail space rentals, the average cost of renting a large warehouse in the UK is GBP£ 3,000 a month, a substantial amount for small and some medium-sized 3PL businesses.
Because of the hefty price tag attached to rented warehouses, companies need to optimise warehouse space. Fortunately, WMS software can organise a warehouse to accommodate the greatest number of goods that can be sold without compromising their integrity.
5. Reduce costly errors
Industry estimates in 2020 indicate that a mis-pick, or an inaccurately selected item that causes a shipment error, costs an average of GBP£ 82.9. Even if the mis-prick rates have gone down to around two per cent, the volume of shipments has more than doubled since a decade ago, which means its annual costs still carry significant figures. Mis-picks can lead to reduced revenues because of lost sales and extra charges for warehouse storage, repacking and return shipping.
Fortunately, WMS software can help eliminate mis-picks by adding a verification process. This procedure eliminates the risks of costly mistakes that lead to shipment errors. While mistakes may still occur, they can be resolved quickly because of WMS automation.
6. Promote time efficiency
Each item kept in the warehouse incurs storage costs. Products that don’t get shipped as scheduled will reduce your revenues and impact on your clients’ reputation. That’s why 3PLs must establish an efficient system that enables a smooth flow of goods. As expected, WMS software can improve your overall efficiency and save time and money.
Because everything is automated, all the data is stored in the database. With this, WMS software can schedule quick shipments, helping ensure that all the packages are shipped on time.
7. Enhance inventory management
By having access to real-time information, you can manage your inventory better. With WMS software, you can spot long-staying items and implement faster turnover. This may include implementing a first-in, first-out policy or cross docking.
Conversely, this technology helps ensure 3PL companies that their clients don’t run out of products through an integrated order tracking system that notifies their customers once stocks are dipping.
With a more transparent inventory and historical data stored in its WMS software, a company can provide clients with a more accurate demand forecast, allowing them to plan ahead.
8. Centralise operations
If your 3PL company has several branches, WMS software can help centralise your operations at no added costs. You won’t have to purchase products individually at each location, saving you from buying the additional tools or frequently visiting multiple sites to see how your business and the staff are doing.
With a centralised system, you can track and manage your branches’ operations and movements. Additionally, you don’t need to open multiple windows to gather business data to help you analyse individual and overall performances.
Conclusion
A warehouse management software is designed to help 3PL firms improve workflow processes and provide the fastest solutions for each task involved. This tool allows companies to fulfil their client’s requirements efficiently and quickly. You’re helping other companies grow their business and yours by providing the best customer service.
References
- Retail Council of Canada.23 August 2021. How warehouse management systems work and how to apply best practices.retailcouncil.org. https://www.retailcouncil.org/community/supply-chain/how-warehouse-management-systems-work-and-best-practices/. Accessed 26 July 2022
- The Store Front. Undated. Small Warehouse For Rent in London. thestorefront.com. https://www.thestorefront.com/selections/small-warehouse-london. Accessed 26 July 2022
- Rheude, Jake. 26 May 2021. The Mis-Pick Effect: Threats Persist in 2021. redstagfulfillment./com. https://redstagfulfillment.com/mispick-effects-pcdata-reports-extremely-worrisome-results/. Accessed 26 July 2022
- Bajwa, R. 09 November 2021. WMS Software: Is a Warehouse Management System Worth the Cost. globatrademag.com. https://www.globaltrademag.com/wms-software-is-a-warehouse-management-system-worth-the-cost/. Accessed 26 July 2022
