Content thumbnail 3PL Guide to Calculating ROI for Warehouse Management System Software
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Conclusion And that’s it! You are now ready to calculate ROI for your WMS investment by following the steps outlined in this guide. If you want to know your overall ROI per month, you simply must add all the savings together and divide by the monthly subscription cost of a WMS. Please note that this calculation only includes labor savings and does not include the additional mispicks savings nor the additional billable activities, which would bring your ROI even higher. Total Labor Savings = Pick Savings + Order Entry Savings + Customer Support Savings + Billing Savings Monthly ROI = Total Labor Savings / Subscription Cost Additional Monthly Savings = Mispicks Savings + Missed Billable Activities Using our sample calculations and an estimated subscription cost of $1,500 per month, we get an ROI of over 400% Total Labor Savings = $775.72 + $2,715.02 + $775.72 + $2,327.16 = $6,593.62 Monthly ROI = 6,593.62 / 1,500 = 440% Additional Monthly Savings = $16,667 + $1,500 = $18,167 Adopting a WMS can be a daunting task, especially when considering the initial and recurring subscription costs as well as the cost of training your employees on the new system. This will add to the front-end cost to adopt a WMS, but it will reduce the time to implement and increase the chance of the implementation being successful, boosting the efficacy of your workflows with the WMS. But, if you follow the steps in this guide, you will see that the ROI for adopting a WMS is well worth the investment after the initial hurdles. extensiv.com | 833.983.6748 13

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