Bottom Line: It’s time to transition the role of warehouses from cost centers to revenue centers that support new digitally enabled supply chains and business models that require greater accuracy, speed, and scale than ever before. A Warehouse Management System is the tool that can make that happen.
Like manufacturing, warehouses, and the systems that manage them, are going through an inflection point. The past role of the warehouse as a cost center is giving way to a more integrated, real-time role responsible for driving revenue and growth. New business models bring entirely new business challenges to the warehouse. A recent survey completed by IQMS of 151 North American manufacturers found that the fastest growing manufacturers can orchestrate analytics, Business Intelligence (BI), mobile and real-time monitoring to grow 10% faster than their peers. The fastest growing manufacturers are integrating these four technologies through their entire supply chains to achieve higher levels of accuracy and responsiveness relative to competitors.
How A Warehouse Management System (WMS) Helps Manufacturers Grow
Ask any manufacturer what their top two priorities are today, and they’ll tell you product quality and finding new digitally-driven business models. WMS’ inflection point is a direct result of manufacturers needing to increase product and service quality while making sure new digital business models succeed.
Digitally enabling a warehouse increases order fulfillment accuracy, speed, and scale while eliminating shipping and receiving handling errors. Relying on a WMS, analytics, BI, mobile and real-time monitoring is decreasing costs associated with under-utilized inventories faster than expected while improving inventory visibility. WMS’ inflection point is also enabling a new era of real-time track-and-traceability performance not available before. By having analytics, BI and real-time data monitoring orchestrated to support new products and business models, WMS today can better optimize the movement of both raw materials, WIP and finished goods throughout production.
How Real-Time Monitoring Is Revolutionizing Warehouse Management Systems
81% of manufacturers say real-time monitoring is improving their business.
- 72% say real-time monitoring is essential for streamlining and making inventory reconciliation more efficient.
- 69% are relying on real-time monitoring to increase the accuracy of tracking production time, downtime, total parts created, rejects and parts to be produced.
IQMS is finding manufacturers migrating real-time monitoring beyond the shop floor into supply chains, starting with warehouses. Our latest survey shows real-time monitoring is starting to revolutionize WMS, further fueling their inflection point by turning warehouses from cost centers to revenue centers and catalysts for growth. Across the wide spectrum of technologies that enable real-time monitoring, IQMS is seeing growing interest in and adoption of Internet of Things (IoT) to bring even greater accuracy, speed, and scale into warehouse management. Manufacturers I’ve spoken with say adding real-time monitoring to their WMS delivers improved logistics, coordination with transportation providers, inventory level visibility, and greater accuracy regarding the status of inbound shipments into warehouse locations. The following are key takeaways from additional recent research underscoring how real-time monitoring is revolutionizing WMS, driving its inflection point to greater accuracy, speed, and scale:
- New digitally-driven business models need real-time monitoring to succeed, and that’s driving adoption of IoT in pilots and full WMS operations. IQMS is seeing more manufacturers piloting and in some cases introducing IoT devices and systems across their supply chains, warehouses, and production centers. The consensus forecast from Forrester, Gartner, IDC, and others is that IoT will be one of the main catalysts driving the future of Industrie 4.0 in general and WMS specifically. Forrester’s heat map of IoT adoption shows Inventory Management Systems and Warehouse Management systems serving transportation, logistics, retail, wholesale and chemical industries have the greatest potential for IoT growth. Forrester, courtesy of Cloudera (reprint) The Internet Of Things Heat Map, 2016 Where IoT Will Have The Biggest Impact On Digital Business by Michele Pelino and Frank E. Gillett January 14, 2016
- Lower transportation costs (37%), faster delivery times (36%) and new supplier and partner locations (32%) are the top three factors further driving WMS’ inflection point today. The greatest challenge manufacturers face when relying on a legacy WMS is the need to scale quickly beyond the constraints of their existing systems. A recent survey by Zebra Technologies shows just how important accuracy, scalability, and speed are transitioning a WMS to improve overall supply chain performance. The following graphic is from Zebra Technologies’ Building the Smarter Warehouse: Warehousing 2020, Redefining Supply Chain Automation in the Age of Digital Technology, North America Report (free, opt-in reqd., 12 pp. PDF).
- There’s going to be a 43% increase in the number of warehouses needed to support new business models and the growth they’re delivering. Manufacturers are also predicting an 8% increase in the number of space expansions and 8% plan to relocate warehouses and Distribution Centers (DC) to support growth and new business models further. The following graphic compares the growth plans for manufacturers globally based on the Zebra Technologies’ Building the Smarter Warehouse: Warehousing 2020, Redefining Supply Chain Automation in the Age of Digital Technology, North America Report
- Zebra found the four areas of out-of-stock conditions, enhancing customer service, warehouse accuracy, and regulatory compliance are redefining the role of WMS today. A WMS must be able to scale across each of these areas while providing the highest levels of accuracy, speed, and scale supporting existing production and new business models. I’ve seen how vital integrating analytics, BI, mobile and real-time monitoring are to enable further these four key factors driving the increase of WMS adoption. Source: Zebra Technologies’ Building the Smarter Warehouse: Warehousing 2020, Redefining Supply Chain Automation in the Age of Digital Technology, North America Report.