SMB owners: The 4 pillars of warehouse software selection success

4 pillars of warehouse software selection success
4 pillars of warehouse software selection success

Choosing the right warehouse management software for eCommerce requires a lot of thought because it has to benefit all of the stakeholders in some way. For small and medium business (SMB) owners, or even an individual stakeholder, we have compiled a short guide to the four pillars of warehouse management software selection success and how it will benefit each department: Finance, IT, Warehouse Operations, and Customer Services.

Finance

In companies up to about twenty people, the person responsible for finance is quite often the founder of the business. When they start to grow then a Head of Finance might be brought in to take charge of this area. When considering a warehouse management system (WMS), the following is an outline of what the finance stakeholders are looking for.

Accurate inventory

Once a month, you need to be able to give your finance department an accurate inventory and the best place to source this is from your warehouse management system. This figure will then be used to provide stock valuation for the company’s profit and loss.

Total Sales

If you’re a growing business and haven’t invested in a large business system yet, finance will need to get sales data to make a record in your accounting software. Your eCommerce warehouse management system should be able to provide you with the total sales value by sales channel, product type, and geography.

Reports

Finance will be very interested in the reports that a decent WMS should be able to provide. For instance, knowing which products sold best, the total number of sales by country, and the total sales over a period can help Finance to make useful predictions for what new inventory should be purchased and where to allocate funds. Some example reports are below.

[Related: How eCommerce companies should be buying inventory]

Finance report 1
Finance report 1
Finance report 2
Finance report 2

IT

This department is usually one of the core competencies in an eCommerce business as they are the key to doing digital marketing, website management, system integrations, and implementing new software. So how will the IT stakeholders benefit from warehouse software?

SaaS or On Premise?

When it comes to selecting a warehouse management system, picking On Premise or SaaS will impact your IT team. For On Premise software, most vendors will require the retailer to have an in-house IT team dedicated to performing maintenance and back ups. With a SaaS WMS, however, very little IT overhead is required meaning they can continue working on improving the website.

[Related: SaaS vs On Premise for eCommerce]

Web platform / WMS integration

When considering a WMS that benefits the IT department, it’s important to note whether it has a plugin that can be turned on so the integration can be set up quickly. Alternatively, consider whether the vendor has an open Application Programming Interface (API) that is well documented so that an integration can be written in easily.

Hardware and Infrastructure

Another key decision criteria for the IT team is what hardware and/or infrastructure requirements are needed for a particular WMS. For instance, it may run using a mobile app and it may require a stable internet connection to do so. Another consideration is if the mobile devices recommended by the vendor are suited to the environment in which they’ll be used. Are they rugged enough? Are the screens large enough to accommodate everyone’s strength of vision?

These are all important factors that, when chosen wisely, will keep your IT stakeholders happy.

Warehouse Operations

For a warehouse manager, the benefits of a WMS are all focussed around them being able to manage their warehouse team efficiently and optimising their productivity. Selecting a decent WMS should benefit the Warehouse Operations in the following ways:

Training

In order for an eCommerce company to scale up and meet the demand at peak, they need a warehouse system that is so simple to use training can be done very quickly. Training new members of staff ties up key resources and costs the company money. As a benchmark figure to work from, it should take less than an hour for a warehouse operator to feel comfortable using a WMS for pick, pack and despatch.

Worker visibility
Worker visibility

Workforce Visibility

For a warehouse manager, being able to monitor everything that goes on in the warehouse without having to physically witness it is just short of heaven. With a suitable WMS, every action should be logged and assigned to an individual so that, at the end of the day, Gerry can generate a report and see who did what action when.

Not only does this create accountability for every operator’s actions, it can also be used as a motivational hack for the warehouse by setting them achievable targets based on their current performance.

Stock Visibility

One of the Key Performance Indicators (KPIs) that a warehouse manager will report on to either the Financial Director or the Managing Director is the inventory accuracy. In companies without a WMS, warehouse managers have to do constant daily, weekly, monthly stock takes, and then report back on the accuracy of those counts which is inventory inaccuracy in practice.

[Related: 6 tips for performing an eCommerce stock take]

With a WMS in place that will ensure accurate inventory, the warehouse manager can then simply report on a few simple KPIs around proving the figures are accurate. For instance, the total number of oversells per week/month/year. A good benchmark for this particular KPI in eCommerce is having 1 oversell in every 40,000 items sold.

Customer Services

The level of service that is given to clients or customers obviously has a major impact on their experience with the company. Like a vicious circle, though, the treatment of the customer service team, from internal and external sources, can impact how well they do their job so what are the customer service stakeholders going to benefit from warehouse software?

Reduction in calls/emails

The most common interactions between a customer and the customer services team are the ‘Where is my order?’ question, the ‘You’ve shipped me the wrong item!’ complaint, and on behalf of customer services the ‘I’m sorry but your order has been cancelled/delayed.’ email.

With warehouse software, accurate inventory should practically eliminate mispicking, oversells, and mis-shipments. As a result, the number of customer service calls and emails should decrease vastly. A client of ours in the women’s fashion industry reported a decrease of 50% for customer emails and a 2/3rd reduction for phone calls.

Freeing up time

Imagine a world in which your customer services team had so few complaints to deal with that they had more time to spend promoting the company on social media and getting actively involved in email marketing campaigns?

As we mentioned above, a good WMS should free up your customer services’ time enough for them to engage in other projects. Zappos are a fantastic example of top notch customer service, and ao.com is another of those who use social to improve the customer experience.

Shiny, happy people!

Happy people, and complex physics, are what makes the Earth go round, but we’re convinced it’s more of the former than the latter. Happy employees also make a good company and nothing could make the customer services team any happier than not being shouted at by irate customers multiple times a day.

With improved, efficient warehouse processes there should be fewer reasons for customers to complain making your customer services department a much cheerier place to be, and reducing employee churn.

All in all, warehouse management software that is designed for eCommerce should provide peace of mind for every stakeholder within the company. Even though it is unlikely for every department to see improvements straight away, from finance to customer services, the benefits of warehouse software should be seen across the board.