Can you run a warehouse with no WMS? The hidden costs of DIY

Running a warehouse is all about efficiency. After all, the primary goal of any warehouse is to get item A to customer B by C o'clock.

To achieve this requires a whole lot of parts moving together – and moving together efficiently.

There's nothing new about this. However, some warehouses miss a trick by failing to deploy a warehouse management system (WMS).

If you're reading this, chances are you're wondering whether a WMS is right for your warehouse. And while we don't know exactly how things are going for you, we strongly suspect you would benefit from one.

This is partly because of the much-vaunted bunch of benefits that come with a good WMS:

End-to-end visibility into your inventory
Increased fulfilment accuracy
Actionable, data-backed insights into how you can improve operations

We could sing these praises all day long – and so could our satisfied customers.

But our aim in this article is a little different. Rather than enumerating and expanding on the benefits of a WMS, we're going to show you the hidden costs you risk racking up without one.

As you go through these costs, you'll notice that they all come back to the simple fact that you're relying on manual processes rather than automated ones. This introduces all sorts of lurking expenses from higher labour costs to stockouts.

For some people, DIY works just fine. But nine times out of 10, you'll find that a WMS can make all the difference to your productivity, inventory management and inventory accuracy.

What are the hidden costs of running a warehouse without a WMS?

In our view, there are six main hidden costs created by running a warehouse without a WMS – and they're all connected.

1. Staffing costs

The first hidden cost relates to the money you spend on your staff. A WMS optimises picking routes and lets staff verify each stage of the fulfilment process with a voice picking headset or barcode scanner.

Without these technological fixes in place, staff will waste time finding inventory and manually verifying orders. This wasted time will often be compensated for with overtime or taking on temp staff.

2. Stocking errors

Your stock needs to be tracked across physical locations. Doing this manually is possible – but the ever-present spectre of human error makes it hard to do with near-perfect accuracy.

This has several unwanted consequences. Product damage goes undetected. Items get sold online that aren't on your shelves. And because you don't have comprehensive visibility into your inventory, you overstock to be on the safe side.

3. Spoilage

The third hidden cost relates to spoilage and expiration. If something on your shelves has an expiration date, you need staff to pick older stock first.

Again, this isn't impossible to achieve manually. However, it's prone to human error and can lead to product write-offs and wasted storage space.

4. Fulfilment errors

You'll notice that the issue of accuracy keeps popping up. This is nowhere more apparent than in the fourth hidden cost: order fulfilment errors.

Humans are good at many things, from the bassoon to building cathedrals. They do, however, have one big flaw: they get tired, distracted and forgetful.

In a warehouse environment, this means customers don't get what they want when they want it. You, meanwhile, end up wasting money on returns.

5. Lack of scalability

You want to grow, right? Without a WMS, systems are difficult to scale, leading to fulfilment bottlenecks and operational disruption.

6. Lack of data visibility

Finally, there are the hidden costs related to data visibility.

It's no exaggeration to say that good decision-making is impossible without good data. Nothing new there.

The difference is that a WMS gives you the insights you need with just a few clicks.

This gives you objective, granular insights into core activities like picking accuracy and fulfilment speed. In turn, these can help you make positive changes to the way you do business.

What are the barriers to WMS adoption?

By this point, it should be clear that running a warehouse without a WMS often leads to overspending. So, why doesn't everyone have one?

The barriers are more numerous than you might first think – but in many cases needn't be.

There are three main barriers to WMS adoption: financial constraints, technological complexity and internal resistance. A good WMS, such as our CORE and EDGE solutions, makes these barriers easily – or more easily – surmountable.

1. Financial constraints

Let's start with the bottom line. A WMS costs money and decision-makers sometimes struggle to measure long-term value.

It's understandable, especially if your profit margins are tight. However, the hidden costs associated with not having a WMS and the actionable insights you get from a WMS combine to make these financial constraints less constraining.

2. Technological complexity

Isn't it difficult to integrate your old systems with your new systems? Data migration, application integration – aren't these time-consuming and expensive affairs?

The answer is rarely yes – and with our solutions, it's always no. Our entry-level CORE solution, for instance, can be up and running within 24 hours. And even in a more complex transformation, all your systems and data will be integrated and accessible on a single, easy-to-use dashboard.

3. Internal resistance

Finally, there's the question of internal resistance. Both warehouse leaders and warehouse staff may feel that the change is too big and too complicated. Isn't it a case of "better the devil you know"?

This might be true if your WMS of choice had a steep learning curve. But with Minster WMS, you can be sure your staff will be able to use it within weeks, not months. Management, meanwhile, will be seeing the benefits soon after.

Are you looking for a highly capable, entry-level WMS to transform your warehouse operations? Our CORE solution is specifically designed as a WMS for small businesses and first-time adopters. It has all the features you need to embrace digital transformation and can be up and running in just 24 hours. To see how it works, book a free demo with our UK team.

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