Content thumbnail 3PL Guide to Calculating ROI for Warehouse Management System Software
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What is ROI? Simply put, ROI is what you earn versus what you spend. Mathematically, return on investment (ROI) is your net profit divided by the total cost of the investment. The higher the ROI, the better! For warehouses, the core drivers of ROI include minimizing time, labor, and errors while maximizing output in warehouse processes to increase operational efficiency. For the sample calculations of savings, this guide uses the following data values: Current Labor / Time Costs: *This value is the average base salary for a warehouse worker according to Indeed.com. Prior to starting your own calculations, make sure to collect the following information: • Hourly labor cost per warehouse employee • Number of hours spent billing and invoicing • Current total invoice amounts monthly • Time spent on support calls with customers • Time spent on manual orders and shipping entry • Number of hours spent picking orders By collecting your warehouse’s information, you can quickly substitute the sample numbers with your own calculations to create your projected ROI on your WMS investment. extensiv.com | 833.983.6748 4

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