How can a WMS transform a warehouse?

Monday, 4 march 2019 | Redacción CEU

The development of e-commerce has changed the old parameters of traditional commerce. At first glance, it may seem that the most revolutionary aspect of their arrival has been a considerable drop in product prices, but electronic trading has gone far beyond. E-commerce enables the adoption of value-added actions like the offer of different services, the establishment of more flexible delivery terms or the personalization of orders and products according to the customer's wishes. Of course, this is also reflected in a new logistic proposal. What are the differences between the management of traditional warehouses and the e-commerce ones? What challenges do the professionals in charge of managing these storehouses have to face? How can they respond to this new context?

A few days ago, The CEU IAM Business School held a professional conference which was focused on e-commerce and warehouse management: How to choose a WMS for e-Commerce? Five challenges and five solutions. In this event, César González, a WMS consultant at the Reflex Logistics Solutions department of Hardis Group, explained what the current challenges of e-commerce are and how they can be addressed through the use of a warehouse management software. Today, in this blog, we offer a summary of the main conclusions of this lecture.

What is a WMS?

In e-commerce, logistics plays a strategic role, as customer experience depends on it. The Hardis Group's specialist lists six fundamental aspects in the current management of the warehouses that are focused on e-commerce:

The total availability of products
The ability to handle a huge volume of references
The possibility of offering different delivery options
Speed as a premise to achieve fast deliveries
The management of units
The work in the area of customizations

To respond to all these aspects, the professionals who manage this type of warehouses have a tool called WMS. It is warehouse management software that accompanies each of the logistic operations within a warehouse: reception, storage, preparation and loading. It also offers extra features such as traceability, regulation and integration. In other words, a WMS can offer help ranging from organizing the work in relation to the trucks' departure times to indicating which products should not be placed near others within warehouses for safety reasons.

The five challenges of logistics for e-commerce

1- The orders in e-commerce

González explains that one of the great changes in the warehouses that work with e-commerce is that the minimum order has gone from being a pallet to only one article. In turn, each order is unique and has a different delivery address and a potential customization. Added to this is the multiplicity of orders and departures and the high number of product references. This new context needs to be imperatively reflected in a change in the organization of warehouses, since, otherwise, their management becomes practically unfeasible. <<Volumetry is what eventually makes managing orders manually unimaginable. The opportunities of optimizing [warehouses] with WMS are obvious for most logistics providers and companies that manage e-commerce processes today>>, says the WMS consultant.

WMSs make possible to implement a logic which is based on the reduction of times and the movements of operators. This software is responsible for processing all orders and organizing them according to their typology and the different priorities such as delivery times, delivery conditions or the type of transport.

2- Peaks in activity and temporary workers

Another particular phenomenon of e-commerce is the imbalance in the volume of work according to the different seasons and dates. The activity increases exponentially on special occasions like Cybermonday, Christmas or the sales periods. The consultant of Hardis Group claims that, in those peaks of activity, the warehouses can increase their staff from two workers up to forty. As a solution, many companies decide to hire temporary workers.

González considers that a WMS is a very useful instrument when it comes to guiding workers in the different operations within the warehouses. They are intuitive tools which only need for their use a few minutes of training. In fact, one of the goals of the companies that develop these kinds of programs is to achieve a design in which the preliminary training of employees is not necessary.

3- Real-time vision: stock and staff

Having a clear view of the status of orders is really difficult when all the orders are different and the system is so complex (there are different carriers, departure times, delivery times and movement flows within the warehouse). Warehouse managers need to count on reliable indicators which show the data in real time in order to detect anomalies and take corrective actions quickly.

According to the specialist in logistics, a WMS makes it possible to see at a glance the operations that are being carried out, the delayed orders or the current status of stock. It can also propose indicators and assign operators according to the workload or the departure time of trucks.

4- The management of returns and traceability

González points out that the returns are part of the promise of services on the e-commerce activities, and also that their management is very expensive. That is the reason why it is essential to foresee, automate and optimize the return processes.

These programs facilitate the reception of returns. They can identify them, process them by units, manage their anomalies, take their data, make the pertinent conformity declarations and intercept the preparations in progress to speed up the process.

5- Evolution and personalization

Due to its innovative nature, e-commerce can evolve and foster new business models. An example of this is the click & collect alternative. The legislation on customs and special products also may change. Likewise, there is a tendency to personalization that goes from the design of different delivery notes according to the client to actions on products.

In many cases, these changes have occurred before in other countries or have already been expected by developers. This software enables warehouses to adapt to these changes. For example, if a product is customized, the WMS also registers the action.

This article serves only as a brief summary of the conference offered by Cesar González. Those interested in watching the full video of this professional conference can visit our Youtube channel. On the other hand, The CEU IAM Business School, together with the Institute for Careers and Innovation in Logistics & Supply Chain, has designed a Management Program in e-Commerce and Logistics that provides a practical experience in e-commerce to its students.