How to increase warehouse automation ROI

One of the best ways to do this is by adopting a warehouse management system — a digital platform that provides insights into operational performance and can help companies automate operations.

Read this guide to learn how warehouse management systems (WMS) use automation to significantly boost warehouse ROI by streamlining operations and minimizing downtime.

Understanding warehouse management systems

A warehouse management system is a comprehensive digital ecosystem that organizes and optimizes every aspect of warehouse operations. While functional needs  depend on the product and vendor,  the core functionalities of WMS typically include inventory management, order processing, labor management and resource allocation, and report generation. 

Some advanced warehouse software includes additional functionalities for streamlining warehouse operations, such as mobile-order tracking and fulfillment, barcode scanning and labeling, and real-time exception handling.

As warehouse automation has developed, WMS software programs have evolved to keep up with these advancements. Many modern WMS platforms use artificial intelligence (AI) and machine learning (ML) to enhance core functionalities.

Businesses experience many benefits after implementing a WMS to automate warehouses. The main WMS benefits for automation are:

• Increased efficiency
• Lower labor costs
• Improved safety
• Better use of space
• Real-time inventory tracking
• Data-driven insights for better decision-making

The ROI of warehouse automation

Warehouse automation ROI refers to the financial gain a business achieves compared to the initial cost of implementing the system in its warehouse. Companies use this metric to evaluate the effectiveness and profitability of their automation investments.

Warehouse automation can deliver significant cost savings and performance improvements. That’s why this market is expected to grow to $36.4 billion by 2028.

However, several factors affect the ROI of warehouse automation investments. These include:

• Initial capital expenditure: The upfront costs of buying and installing automation systems can be high. However, it is usually offset by long-term cost savings.
• Labor savings: Automated systems can minimize manual labor costs. This means you can hire fewer people and achieve a higher bottom line.
• Customer satisfaction: Automated systems lead to more accurate and faster order fulfillment. This, in turn, makes customers happier and more likely to come back.

Increasing ROI through WMS automation

Adopting warehouse automation systems is only one piece of the puzzle. To make the most out of automation, businesses should integrate their systems with a WMS to automate operations.

This WMS integration offers visibility into the warehouse process, connecting automated equipment with inventory management, order fulfillment, and real-time tracking.

It also provides real-time warehouse analytics, which gives managers complete visibility into warehouse operations. They can then make data-supported adjustments to reduce inefficiencies and boost ROI.

The role of automations and workflows in reducing downtime

WMS automation workflows can also streamline warehouse processes by improving inventory management and order accuracy.

AI-powered warehouse workflow automation technology empowers managers to try modern inventory management techniques such as economic order quantity (EOQ) and batch tracking. Through these methodologies, managers can reduce manual errors and maximize operational efficiency. This technology also offers automated inventory management, giving team members more time and energy to focus on higher-level tasks.

When paired with WMS, automated warehouse systems give managers real-time data analytics for informed decision-making. Thanks to this data, managers can monitor inventory levels, track order progress, and spot bottlenecks when they happen. This level of visibility lets them adjust workflows proactively, reducing downtime in warehouses and increasing ROI.

Implementing WMS automation: Best practices

Implementing WMS automation can be challenging, especially when managers have limited experience with such systems. The following WMS implementation best practices can help you get started:

• Assess current warehouse operations: Review your current systems and how they may fall short. Then, identify bottlenecks and automation opportunities.
• Choose the best software solutions: Look for scalable platforms that fit seamlessly with your existing tools.
• Create a clear timeline for integration: Set realistic deadlines and allocate resources effectively. Consider costs for software, potential hardware upgrades, and IT support.
• Adopt a change-management strategy for staff and stakeholders: Integration success depends on your team and stakeholders. Provide detailed training to help them understand the new workflow.
• Test and monitor the integrated systems: The last step is to conduct extensive testing before fully launching the new system. When the system is live, track its performance through metrics like processing times, order accuracy, and stock discrepancies.

Measuring the success of WMS automation

After implementing WMS automation, measure its success to understand its true impact on ROI.

One of the most effective ways to determine success is by monitoring key performance indicators (KPIs) after implementing WMS automation. Critical KPIs to track include order accuracy, inventory accuracy, and order fulfillment speed.

To track improvements in efficiency and ROI through KPIs, managers should use built-in WMS tools like real-time dashboards and performance analytics. These tools empower users to compare pre- and post-automation performance, and reveal areas where automation is driving results and where adjustments are needed.

These methodologies also enable access to real-time data insights. Managers can use this data for continuous warehouse efficiency optimization and improvement.

Challenges and solutions in WMS automation

Warehouse operators and managers may face various obstacles during WMS automation implementation. These include poor inventory management, inadequate system customization, labor management challenges, and ensuring data accuracy across the system.

Strategies and solutions for overcoming these challenges include:

• Detailed planning: Run a detailed analysis of current warehouse operations and establish clear goals for the implementation process.
• User training: Give comprehensive training to warehouse staff to ensure a smooth adoption.
• Stakeholder engagement: Show stakeholders how integration saves time and boosts efficiency. Their support will make team members more confident about the new system.
• Choose the WMS vendor and technology partners: Prioritize vendors with a proven track record and expertise in your industry.

Future trends in WMS and warehouse automation

Picking the right WMS vendor is important to guaranteeing long-term success. But to stay competitive in an increasingly automated supply chain landscape, you must stay on top of future WMS and warehouse automation trends.

As we move into the second half of the 2020s, warehouse automation is being revolutionized by AI and ML. Many of these new technologies provide predictive maintenance in warehouses, which means they use advanced analytics and sensor data to observe warehouse equipment health in real-time.

Autonomous vehicles have also been on the rise. They move goods seamlessly across different warehouse parts, improving safety and reducing manual labor costs.

To prepare for the next generation of warehouse automation solutions, businesses must invest now in WMS automation platforms that integrate with AI, robots, and other leading-edge tech trends. Otherwise, they run the risk of falling behind.

Boost your warehouse ROI with WMS automation

Implementing WMS automation is one of the best ways to boost ROI and stay competitive in the supply-chain landscape. Besides improving inventory accuracy, it also reduces labor costs, leading to warehouse productivity improvements.

If you’re looking for a WMS automation provider that’s up to speed on industry trends, consider Logiwa IO. An AI-driven fulfillment management system (FMS), Logiwa IO is a cloud-native solution that goes beyond a traditional WMS.

Schedule a call with one of our fulfillment experts to learn how Logiwa IO’s supply chain automation solutions can boost your bottom line.
 

FAQs on enhancing ROI through WMS automation