Free Warehouse Management: When do you save money? When does it get expensive?

The use of free Warehouse Management Software can be a favourable introduction to IT-supported Warehouse Management. However, before companies choose this option, they should carefully consider the disadvantages and risks of free Warehouse Management Software.

Warehouse Management Software monitors and controls all processes in a warehouse. It increases the efficiency of Warehouse Management through centralised data management and automation. Warehouse Management Software is also available free of charge. In this article, we analyse in which cases it makes sense to use free Warehouse Management Solutions. What are the limits to the use of free Warehouse Management? How can you assess whether free Warehouse Management is sufficient for your own intralogistics tasks?

Read in detail:

• What does Warehouse Management Software do?
• What is the difference between free and paid Warehouse Management Software?
• Systematic advantages and disadvantages of free Warehouse Management Systems
• For which warehouse sizes and warehouse types does free Warehouse Management Software still make sense?
• How can I assess the economic risks of free Warehouse Management Software?
• Free version of the Warehouse Management Software Bitergo WMS (Warehouse Star)

What does Warehouse Management Software do?

Warehouse Management Software (WMS) plays a crucial role in the efficient organisation of warehouse stocks in companies. Warehouse Management Software offers a wide range of functions that help to optimize the entire warehouse operation. These include real-time stock tracking, optimizing storage locations, order picking, planning goods receipts and issues and automating processes such as stock updates and ordering.

Warehouse Management Software enables companies to control their stock levels, identify bottlenecks and organize the supply chain efficiently. Tasks such as stocktaking are also efficiently supported. One systematic advantage is the centralized, digital management of all Warehouse Management data. This creates the greatest possible transparency and security. In addition, the digital management of warehouse data enables the connection of Warehouse Management to higher-level software solutions such as ERP systems and order management.

By using Warehouse Management Software, companies can better manage their stock levels, increase customer satisfaction and improve their operational efficiency.

What is the difference between free and paid Warehouse Management Software?

Warehouse Management Software is generally a powerful and complex software solution. Accordingly, costs are normally incurred for their use. These are licence costs as well as costs for setting up and maintaining these systems. However, there are also offers for free Warehouse Management Software or free versions of purchased products.

Here is a selection of such free products:

• Odoo Inventory
• Zoho Inventory
• Easyship
• Veeqo
• eSwap
• Sortly
• VARIO 8

Free and paid Warehouse Management Software differ in several aspects that companies should consider when making their choice. Free software often offers basic functions such as inventory tracking and simple storage space optimization. They are generally designed to be more suitable for smaller companies with simpler storage requirements. They often lack advanced functions such as automatic order processing or detailed reporting. Scalability is also limited in many cases.

In contrast, paid solutions offer a wider range of functions. These include advanced warehouse optimization algorithms, integrations with other company systems such as ERP or WMS as well as comprehensive support and training. Paid software often also offers regular updates and upgrades to keep pace with the changing needs of the business.

With free Warehouse Management Software, there are no additional costs for the programme. There is also no commitment through the usual contractual minimum terms. These free Warehouse Management tools are simply downloaded and installed.

Systematic advantages and disadvantages of free Warehouse Management Systems

Free Warehouse Management Systems can be a tempting option for companies, especially for small businesses with a limited budget. However, they also come with certain advantages and disadvantages that should be considered when making a decision.

Advantages:

• Initial cost savings
  The benefits of free Warehouse Management Systems primarily include the aspect of saving on software licence costs. For companies that are in the start-up phase or require limited Warehouse Management, free solutions can be an economically attractive option. They usually offer basic functions such as inventory tracking and storage space optimization, which may be sufficient for smaller businesses.
  
  
• Fast availability
  Another advantage is the easy availability and quick implementation of free Warehouse Management Systems. They can often be downloaded directly online and put into operation within a short time without having to go through complex installation or training processes. This can be particularly advantageous if companies need a solution quickly or do not have the resources for extensive training.

Disadvantages:

• Limited range of functions
  A key disadvantage is the limited functionality compared to paid Warehouse Management solutions. Free Warehouse Management Software often only offers basic Warehouse Management functions and can therefore be inadequate for companies with more complex requirements.
  
  
• Lack of scalability
  Free Warehouse Management Systems may not be able to keep pace with a company's growth and changing needs. As the business expands or evolves its operations, it may be necessary to switch to a paid solution, which can incur additional costs and labour.
  
  
• Limited customization options
  The available free Warehouse Management Software solutions are basically standard products. In contrast to the more comprehensive and complex paid versions, they offer hardly any options for customer or warehouse-specific customization.
  
  
• Lack of support options
  Because free Warehouse Management Systems are often provided by small development teams or community support, free systems may not offer the same stability and performance as paid solutions, which can lead to downtime or other operational issues.
  Finally, support is a critical factor. Paid providers usually offer dedicated support that is available quickly in the event of problems or questions. With free solutions, support may be limited or may only be provided through online resources or community forums.
  
  
• Security and reliability
  Paid software providers often invest in robust security measures and redundant server infrastructures to prevent data loss and ensure system availability. Free solutions may not offer the same level of security, which can be a risk for organizations with sensitive data.

For which warehouse sizes and warehouse types is free Warehouse Management Software still useful?

Whether the use of free Warehouse Management Software is an operationally sensible option essentially depends on the following dimensions:

• Size/stock turnover
• Functional requirements
• Need for interfaces to other IT solutions (ERP, ...)

Size/warehouse turnover for free Warehouse Management

Before deciding in favour of free Warehouse Management Software, it is essential to check whether it fulfils the required sizes of storage locations, stock movements and articles. And it is not enough to base this on the current status. Even more important is the medium and long-term planned or forecast warehouse development. Only Warehouse Management Software that grows with you guarantees continuous efficiency. Caution: changing the Warehouse Management System in the middle of growth periods represents a critical burden for the company.

Functional requirements

Does a free Warehouse Management Software fulfil the warehouse-specific functionalities? A comparison of the scope of services using the following checklist enables an initial assessment:

• Incoming Goods
• Order Picking
• Storage
• Stock Transfer
• Repacking
• Packaging
• Outgoing Goods
• Shipping
• Inventory Counting
• Reporting

The fact that the free Warehouse Management System contains all the functions required for your own warehouse operations is a necessary prerequisite for its use.

Need for interfaces to other IT solutions (ERP, ...)

Warehouse management often requires a connection to other higher-level or lower-level IT solutions. For example, to ERP systems, commercial software for order management, to e-commerce solutions or to control industrial trucks or storage and retrieval machines.

Free Warehouse Management Software usually only offers very limited interfaces to such neighbouring solutions. This can limit their efficiency to such an extent that it is not functionally or economically feasible to use them.

How can I assess the economic risks and disadvantages of free Warehouse Management Software?

If the requirements regarding size/warehouse turnover, functional requirements and the need for interfaces to other IT solutions are met, free Warehouse Management Software can therefore be a cost-effective option. However, there are economic risks and disadvantages compared to paid Warehouse Management Software. These can be so serious that the use of free Warehouse Management Software is not advisable.

The economic risks of functional limitations with free Warehouse Management Software

Does the free Warehouse Management Software cover 90% of the functional requirements of your own warehouse? It is tempting to compromize and cover the missing 10% manually or with proprietary tools. However, the amount of work involved can quickly lead to economically relevant disadvantages.

Let's assume that the missing functionality requires 60 seconds of additional time per storage. This adds up to 1 hour and 40 minutes for 100 storage processes. For 1,000 storage operations, it is 16 hours and 40 minutes. These additional burdens can quickly eat up the savings on licence costs. Great caution is required here.

The economic risks of limited service and troubleshooting with free Warehouse Management Software

The risks that arise from a lack of service and support with free Warehouse Management solutions lead to even more entrepreneurial dimensions.

Paid contracts for Warehouse Management Software include continuous updates and service as well as support services in the event of a fault with defined response times. Both are omitted in the case of free Warehouse Management Software.

The limited continuous service increases the susceptibility of the software solution to faults. The economic damage in the event of a failure or malfunction of the Warehouse Management Software can be threatening.

This starts with the longer response time of a provider of free Warehouse Management Software to a simple question about the operation of the software. The additional waiting time disrupts operational processes. This costs money directly due to idle time for warehouse staff and may cause customer dissatisfaction.

But what happens if a fault in the Warehouse Management Software leads to a standstill in warehouse operations? The limited service level when using free warehouse management can take on economically threatening proportions. What does it cost if a warehouse is not operational for days on end? What penalties can be imposed for late delivery? What damage is caused to the company if a customer is completely lost in this case?

When deciding in favour of or against free Warehouse Management Software, incident scenarios in particular should be carefully examined.

Free version of the Warehouse Management System Bitergo WMS (Warehouse Star)

Overall, companies should carefully weigh up the pros and cons when deciding whether or not to opt for free Warehouse Management Systems and ensure that the chosen solution meets their individual requirements and long-term goals. While free systems can offer a cost-effective option, they can also come with limitations and risks that can negatively impact the efficiency and productivity of the organisation in the long term.

In many cases, therefore, there are arguments in favour of using paid software solutions for Warehouse Management. Of course, this also raises the question of which product suits the requirements of your own warehouse. And free offers can play a helpful role in this decision.

Some providers of chargeable Warehouse Management solutions offer free trial or demo versions of their products. Quickly installed, these support a realistic assessment of suitability for your own warehouse.

This is exactly what the Warehouse Management Software Bitergo WMS (Warehouse Star) offers. At www.warehouse-star.de, interested parties receive personalized access to test all Warehouse Management features free of charge for 30 days. The data entered is retained in full if one of the price models offered is subsequently booked and can continue to be used seamlessly.