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Consequences of Not Adopting an SaaS WMS System

By Len Bacharach (293 words)
Posted in SaaS on January 17, 2014

There are (0) comments permalink

 Consequences of Not Adopting a 3PL SaaS Warehouse
Management System

Leading industry estimates indicate that a company's
inventory holding costs range anywhere from 3-5% or more a month.

 These high inventory holding costs are directly related to
company's not adopting a 3PL SaaS based WMS cloud based system and deciding
instead to maintain manual inventory management practices. These costs are real
and go directly to a company's bottom line.

 Cost of Freight

When inventory counts are low and a customer order needs to
be met, costs of freight are increased when you have to rush an order. Not
using 3PL Software and using instead a manual process provides inaccurate
inventory counts and ultimately higher costs.

Costs of Inventory Obsolescence

One of the major costs of a warehouse inventory management
system is caused by raw materials and finished goods obsolescence. These costs
are directly related to a company's propensity to over purchase which is linked
to manual inventory processes. Manufacturers, warehouses and 3PL's that manage
inventory on Excel spreadsheets run the risk of purchasing more materials than
they require.

Costs of Inventory Damage

An additional cost of purchasing more than you need and not
using a comprehensive 3PL SaaS WMS software is the high cost of inventory
damages. The longer you hold inventory the greater probability exists for it to
become obsolete, outdated or damaged. These damages are magnified when products
are of a fragile nature.

Lost Customers

Inaccurate cycle counts will result in lost customers.
Losing customers because inventory is not available is a direct cost and is
extremely damaging. With a well structured 3PL SaaS WMS system you can track
and monitor your inventory, ensure you will not lose the sale and most
importantly not lose your valuable customer.


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