Why Brands Need an Efficient Warehouse Management System

Traditionally, brands have managed their supply chain through a network of national distributors, regional warehouses and sold their products in stores as shown in Fig 1. Over the last decade and particularly with the onset of Covid, there has been an ecommerce revolution which has caused the shift of customers to buying goods and services online and demanding that they be able to shop at their convenience and receive items at a location of their choice and at a time of their choice.

Fig 1. Traditional supply chain material flow

In the traditional supply chain, a large number of SKUs (Stock keeping Units) moved from the manufacturer to the National DC, from where a smaller set moved to the regional warehouse based on the region’s requirements and a smaller subset moved to the retailer store. Still, this was largely a B2B operation where the number of items moving across the supply chain network is large. In this scenario, the software needs were essentially for a B2B operation. 

Why does one need a WMS (warehouse management system) to begin with?

A WMS helps to accumulate and consolidate products from various points of manufacture within a brand’s facilities for combined shipments to the customer. A WMS helps to manage the in warding of goods, managing the inventory within the warehouse (or a DC), and outward of goods upon fulfillment of orders and trigger a replenishment.  Without managing this material flow, it would be very difficult to keep track of where things are and how it affects the rest of the supply chain. The key functions of a WMS are shown in Fig 2.

Fig 2 Key functions of an efficient warehouse management system

A WMS software also ensures the flow of materials into the warehouse and out of the warehouse by avoiding layouts that impede the smooth flow of items and to identify and resolve the bottlenecks.

With the onset of ecommerce sales, fulfillment that used to be more of a B2B operation has changed to B2C and that essentially requires a WMS built for that purpose and which can help do multiple new tasks such as small order fulfillment, micro fulfillment and also provide visibility to inventory and fulfillment at stores. Suddenly, a warehouse that used to manage large SKU in each order for fulfillment is now expected to fulfill small orders of single digit quantity of SKU. 

This has caused the traditional Warehouse Management System (WMS) software, that powered the receiving of items from vendors, pick pack and ship operations and inventory management to essentially store large quantities of every product in each location to now suddenly manage a B2C operation where the orders are in much smaller quantities in addition to a B2B operation where the number of SKUs could be small but the quantities significantly more. This rendered many of the traditional WMS software obsolete in the new ecommerce shopping scenario.

A brand selling direct to customers using online channels has to accommodate a number of new challenges. They include the following:

• A larger assortment of products. Some of these products might be sold exclusively online or they may even have a separate assortment in a marketplace as compared to the assortment that they might have on their own website. Brands require product assortment at the right place, at the right time and in the correct quantities to be successful.
• They have to address a much larger customer base. Each buyer on an online marketplace or brand website is a customer that requires information on their order and can pick up the item at a store, a drop box, or even a distribution center. 
• They need a WMS solution that can provide visibility to inventory across multiple locations used for fulfillment such as stores, distribution center, micro fulfillment center, franchisee store, etc
• Surge in demand, seasonality and new markets will require the WMS solution to be configurable quickly to address in warding of new products, entering different kitting and assemblies and the ability to pick, pack and ship to handle the increased orders. 

To address the new challenges, an efficient WMS must:

• Work along an existing WMS system that a large brand might already have for addressing their traditional supply chain.
• Work along an existing order management system along with an ecommerce ready order management system that can handle the orders from marketplaces, multiple websites from where a customer can order from. 
• Integrate to multiple channels of sale including popular ecommerce tools such as Shopify, Magento, etc., and  marketplaces across the globe such as Amazon, Flipkart, Myntra, Shopee, Lazada etc.,  to receive orders directly for fulfillment without manual intervention.
• Integrate to ERPs such as Tally, SAP and other accounting software.
• Work in conjunction with warehouse automation tools.
• Allow the location of a SKU to be distributed across multiple locations when a location is empty or shared locations for multiple SKU for increased efficiency
• Handle the requirements for handling fulfillment at stores and micro fulfillment centers and multi site fulfillment locations
• Facilitate pick, pack and ship functions to handle the operations associated with fulfilling ecommerce orders.
• Be architected using micro services and multi tenant architecture that will allow for enhancements to be made with minimal disruption and also remain scalable as newer features are added and upgrades done in a seamless manner
• Integrate with leading fulfillment partners such as DHL, Fedex and Delhivery.

By using an efficient WMS to handle the ecommerce operations, a  brand that starts or expands its ecommerce operation can handle the online orders, fulfill them efficiently in a cost effective manner and become successful in their ecommerce operations along with their offline operations. They can use solutions such as Vin WMS to handle both their online and offline operations or use solutions such as Vin WMS to handle just their online orders while leaving the offline operations to function as they did before. This will ensure that their operations can scale and be managed efficiently as they grow their brand across multiple channels.