Many older warehouse management software programs were designed for handling day-to-day operations but did not provide an overview of the big picture. Today's Warehouse Management Systems have come a long way with the inclusion of forecasting models and long-term data collection. The software can whittle down trends to the individual SKU and determine how much stock is needed for padding. By using demand forecasting, you can drastically reduce the amount of excess stock on your floor and prevent the purchase of items that will not sell.
You may be relying on many different vendors to bring product into your warehouse. Over time, you may have noticed that some vendors are consistently late on their shipments, or that they have excessively long lead times due to inefficiencies in their own warehouse replenishment processes. Other vendors may not comply with agreed upon packaging or labeling requirements. In other cases, you may find that vendors have burdensome minimum/maximum order requirements that force you to order too much or too little of a product, causing instability in your own stock levels. It's not surprising that only one or two bad vendors can seriously drive up your costs and force you into a situation where you are overpaying and rushing to make late orders on time.
When you first bring a Warehouse Management System on board, it may be difficult to trust that the computer has your best interests at heart. However, the system is designed specifically for increasing efficiency. The information generated by your operations can be used to automate reordering on important products. Items that are fast-moving cannot afford a lag in replenishment because a manager didn't get to it today. By trusting the system to handle those items as soon as they hit a minimum threshold, you will never have to worry about out-of-stock items.
All three of these steps serve to increase your profits by freeing up money that would otherwise be spent on unnecessary stock or on labor hours waiting for late trucks and overtime. The program provides a wealth of data with which you can predict demand, evaluate vendor performance, and automate some of the most important repetitive tasks. This allows your staff to spend more time focusing on the actual act of filling your warehouse shelves and less time worrying about when or if the product is on its way.