You Gotta Know Where
You Hold ‘Em
In studies comparing organizations that use warehouse
management systems (WMS)
against organizations that
don’t, APQC found that those
with such systems performed
better in perfect-order performance, full-load utilization,
and in reducing expedited
orders. The improved performance occurred among all
groups – bottom, median, and
top performers. The improvements were particularly
noticeable among the bottom
—Marisa Brown, director of APQC
Knowledge Center, and Rob Spiegel,
MS solutions integrate warehouse functions and provide
inventory visibility. The systems utilize total warehouse
information and user-defined business rules to direct productive warehouse movements. Some systems use
sophisticated techniques such as cross-docking, flow-through distribution, and
task linkages to further increase productivity. WMS is often integrated into ERP,
production, transportation, order management, and financial systems.
WMS enables shorter order fulfillment times and better on-time delivery.
Nearly 62 percent of APQC’s respondents utilize WMS. These organizations
demonstrate higher performance in customer order cycle times, and an improved
ability to deliver orders to customers on time. The median performer using WMS
demonstrated customer order fulfillment of 4. 6 days versus non-users with 7.0 days.
As for perfect orders, those using WMS demonstrated improved performance.
The perfect order is the ability to flawlessly take and fulfill a customer order. It
includes on-time delivery, complete orders, damage-free orders, and accurate documentation rates. The median and top performers showed a 2-percent improvement, while the bottom performers showed a full 11-percent improvement.
Shipping full loads was another metric with demonstrated improvement
for organizations using WMS. Those organizations that can lift their percentage of full loads are able to reduce their costs by taking advantage of
full capacity, whether with trucks, trains, ships, or planes. Bottom, median
and top performers all showed better performance with WMS. Top performers outperformed by 5 percent, median by 8 percent, and bottom performers by 18 percent.
Another measure where WMS users had better performance than non-users was in reduction of expedited orders. These are orders that are forced
because of poor transportation planning, stock re-balances, raw material
shortages, or production schedule changes. Those organizations using WMS
had lower expedited orders across the board. The top performers had fewer
expedited orders by 10 percent, median performers by 5 percent, and bottom performers by 3 percent.
Based on its data, APQC sees tangible benefits to implementing WMS systems.
They enable organizations to better manage inventory in real time with visibility
into current inventory locations and levels. This visibility enables organizations
to streamline their processes related to shipping and delivery. As well as
improving internal efficiencies and reducing overall cost, WMS systems also
improve customer relationships through improved fulfillment.