The Rise of SaaS Based WMS for Operational Agility and Cost Optimization

The Rise of SaaS Based WMS for Operational Agility and Cost Optimization

Supply chain management and other operational processes are constantly evolving due to pressure from global disruptions. In this context, warehouse management remains integral to all supply chain operations, as smooth delivery and fulfillment times largely depend on warehousing.

At its core, a Warehouse Management System (WMS) manages all the operations and SKUs within a warehouse, from receiving to warehouse layout, placement of SKUs, order fulfillment, inventory visibility, compliance, analytics, and, most importantly, providing insight for timely business decisions.

Traditional vs SaaS based WMS

While legacy WMS systems assist with all these processes, they can also be tedious to maintain and have expensive server requirements or lower compatibility with other systems. A SaaS-based WMS, on the other hand, offers scalable, versatile, and cost-effective alternatives to traditional systems. This allows businesses to seamlessly adapt to changing market dynamics or strategic business needs. The transition from traditional warehouses to SaaS-based WMS solutions is a significant shift that businesses are increasingly embracing.

Traditional warehouses often rely on on-premises or in-house software and hardware infrastructure, which can be costly to maintain and upgrade. SaaS-based WMS solutions, hosted in the cloud, eliminate the need for expensive on-site servers and IT resources. Additionally, they offer automatic updates and seamless integration with other cloud-based systems, ensuring businesses stay up to date with the latest features and capabilities. This transition empowers companies to focus on their core operations while benefiting from the flexibility, scalability, and cost-effectiveness of cloud-based solutions.

As supply chain resilience becomes paramount and e-commerce continues to grow, the warehouse management automation market is expected to reach $5.97 billion in 2028, with a compound annual growth rate (CAGR) of 14.1%. With automation becoming the norm, companies increasingly embrace the SaaS model for their internal systems, including WMS. In this article, we unpack the transformative benefits of SaaS-based WMS systems for warehousing operations. We explore key features and how their adoption can reduce costs and increase profitability across supply chain management processes.

Key benefits of SaaS-based Warehouse Management Systems

●       Enhanced agility and cost efficiency

Traditional warehouse management systems are often tedious to build and maintain, requiring upfront investments for hardware, software, and licensing. Shifts in business requirements and market demands add more complexity to the system, necessitating your WMS to be updated regularly to provide more value. The lack of scalability of legacy WMS can make this shift time-consuming and slow down warehouse operations, resulting in delays, longer fulfillment times, and decreased customer retention.

A SaaS-based WMS eliminates all these processes. With options like pay-as-you-go services and quick adaptability, businesses can reduce expenditure and allocate resources more strategically. As time-consuming processes are automated, you can improve space utilization across your warehouse floor and gain higher workforce productivity.

Moreover, SaaS WMS solutions are designed for rapid deployment, with implementation times measured in days or a few months, rather than prolonged periods. This accelerated time-to-value allows businesses to realize operational efficiencies and streamline processes sooner, translating into tangible cost savings and competitive advantages.

For instance, global beauty leader L’Oreal signed up with a WMS to leverage their SaaS-based warehouse management system in 2020. This cloud-based system can unify every aspect of distribution. Leveraging this WMS system, the beauty giant aims to improve agility through the digitalization, efficiency, and productivity of the company’s distribution centers.

SaaS-based solutions also offer high levels of flexibility and customization. Businesses can experiment with strategies like dynamic warehouse layout optimization or real-time inventory forecasting in response to market fluctuations. For instance, they might adjust warehouse configurations based on seasonal demand patterns, optimize storage space, and reduce operational costs. This agility allows them to capitalize on emerging opportunities, directly impacting costs.

WMS systems can support and refine GTM strategies such as product launches, promotions, and market expansions. Since WMS systems play a crucial role in inventory management, ensuring optimal stock levels, accurate tracking, and efficient storage, they can help maintain the right inventory levels and ensure product availability across multiple distribution centers and fulfillment locations.

WMS systems also generate vast amounts of data related to warehouse operations, inventory movements, and order processing which can provide valuable insights into customer behavior, market trends, and product performance. By analyzing this data, the company gains insights into customer demand patterns, regional preferences, and market trends, refine GTM strategies, optimize marketing campaigns, and identify new market opportunities.

●       Operational advantages: speed, scale, and automation

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Unlike traditional WMS solutions, SaaS-based solutions are designed to streamline core warehousing processes through real-time tracking and updates, offering visibility into all logistics processes. By leveraging best practices and industry-standard workflows, these solutions enable businesses to optimize operations, improve efficiency, and enhance overall productivity.  

SaaS-based WMS systems are flexible and can quickly scale up or down in response to changes in business requirements, such as seasonal variations, market expansion, or product line modifications. Because of this adaptability, organizations may avoid costly software migrations and hardware updates and only pay for the resources they need at any given time.

Further, manual processes are transmuted using automation into digital workflows to increase productivity. An additional benefit of SaaS-based solutions is that they can further increase throughput capacity by streamlining cumbersome processes and enhancing cycle times.  

Amazon, for instance, is known for its record delivery timelines. The retail giant leverages SaaS based WMS to handle its vast inventory across multiple distribution centers. The system also updates inventory in real-time, allocates storeroom areas into zones, and automates order delivery processes. All this ensures efficient product flow and fast delivery options, making the retailer a logistics market leader.

●       Data-driven insights, compliance, and integration

Since SaaS-based systems typically use cloud storage, seamlessly connecting with other digital systems is a breeze. This interoperability ensures data exchange and enhances collaboration among different stakeholders. It also has the added benefit of helping businesses derive value from data by analyzing aspects like fulfillment rates, efficiency, and TAT (turnaround times).

Many SaaS WMS platforms come equipped with built-in compliance features or modules that address common regulatory requirements across different industries. These features often include predefined templates, workflows, and reporting functionalities tailored to specific certifications or compliance standards. By providing certifications and compliance features as part of the standard offering, SaaS WMS vendors eliminate the need for businesses to invest in separate compliance software or incur additional customization costs. This allows businesses to allocate resources more efficiently, focusing on their core operations rather than spending time and money on compliance enablers.

GSK, the leading global pharmaceutical company, for example, has adopted a cloud-based SaaS warehouse management system to manage its manufacturing and distribution centers worldwide. This decision was driven by the need for a scalable, compliant, and integrated solution to support their complex supply chain operations. The WMS system provides GSK with several positives:

        ●       GSK implemented a SaaS WMS that provides real-time visibility into inventory levels, order fulfillment rates, and supply chain performance across multiple distribution centers. This data-driven approach enables GSK to optimize inventory management, identify bottlenecks, and make informed decisions to improve operational efficiency.

        ●      The pharmaceutical industry is heavily regulated, and GSK's SaaS WMS comes equipped with built-in compliance features and modules tailored to meet various regulatory requirements, such as Good Manufacturing Practices (GMP) and serialization mandates. This ensures that GSK's warehouse operations adhere to industry standards and regulations without the need for additional customization or separate compliance software.

        ●      The cloud-based nature of the SaaS WMS allows seamless integration with GSK's other enterprise systems, including enterprise resource planning (ERP), transportation management systems (TMS), and customer relationship management (CRM) platforms. This integration facilitates data exchange and collaboration among different stakeholders, enabling end-to-end visibility and coordination across the entire supply chain.

By leveraging a SaaS-based warehouse management system, GSK can focus on its core competencies in drug development and manufacturing while ensuring efficient, compliant, and data-driven warehouse operations, supply chain visibility, and regulatory adherence.

With all your data in one place, optimizing inventory management and logistics becomes easier. With real-time viability across warehouse operations, inventory levels, and supply chain performance, managers and key stakeholders can unearth new opportunities and insights.

Futureproof your business with SaaS WMS

As supply chain management (SCM) evolves, the need to proactively own warehouse management and to pivot focus according to shifting market demands is crucial. Leveraging a SaaS-based WMS solution for your warehousing needs is the solution you need to address critical supply chain challenges.

Tata BB Matrix WMS, for example, is one such offering that can serve as your gateway to revolutionize warehouse operations through a scalable microservice architecture that effortlessly handles a million orders daily. Specifically designed to address supply chain disruptions, BB Matrix excels in multi-warehouse scenarios, flexible network models, and optimal sale order lifecycles. A WMS system like BB Matrix brings you several benefits:

        ●       Achieve excellence in throughput

        ●       Master fulfillment rates

        ●       Achieve cost efficiency

        ●       Boost efficiency across various operational aspects, including billing and other processes

        ●       Optimize inventory management through real-time visibility, automated data capture, and efficient SKU lifecycle management

        ●       Attain reduced lead times for activities like seamless last-mile delivery, incorporating dark stores, if any.

Future-proof your supply chain with a powerful SaaS-based WMS solution today. Click here to learn more about Tata BB Matrix.

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