Client:
A fast-scaling contract manufacturer (CM) operating in a high-growth environment and serving customers who send their own components and raw materials for processing and fulfillment.
Challenge:
The company was positioned for expansion but found itself constrained by operational breakdowns and customer-facing quality concerns. As the CM scaled operations, it began facing serious breakdowns in warehouse and inventory control. Products were going missing, orders were delayed, and internal confusion was mounting. Notably, raw materials sent by customers were being lost—forcing awkward, trust-eroding follow-up calls to request replacement shipments. These losses not only delayed production but triggered customer audits that further exposed process gaps. As a result, the CM began losing out on new business due to audit failures and poor inventory traceability.
The internal team believed that the solution was to invest in a Warehouse Management System (WMS). Their current ERP system was basic, and they assumed that technology was the missing link to fixing their escalating problems. Before making that investment, they reached out to Waypost Advisors to assess the situation and validate the best path forward.
Strategic Objectives:
While the client’s initial goal was to assess and potentially implement a WMS, Waypost reframed the focus around foundational business health. The strategic objectives shifted to:
- Diagnose whether a WMS investment was the correct path forward or if it would be a premature patch to the issue.
- Identify the operational root causes behind inventory errors, delays, and system mistrust.
- Define practical improvements that could stabilize inventory control using current systems.
- Lay a scalable foundation for future system upgrades by improving process discipline first.
Approach:
Waypost conducted a half-day warehouse walkthrough, pairing physical observation with real-time interviews. The assessment was hands-on, structured around the movement of goods, and involved shadowing the employees responsible for each step of the process.
Key Assessment Areas:
- Receiving, inspection, and storage of raw materials
- Handling of overproduction and quarantined inventory
- Pick list creation and physical picking workflows
- Finished goods staging and shipment prep
- Cycle counting and inventory reconciliation
- Inventory transaction timing and responsibility
Waypost extended the assessment to include the planning and purchasing teams—shadowing them to evaluate how data was generated, how decisions were made, and how the ERP system was (and wasn’t) used to support these workflows.
Throughout the process, they mapped workflows, captured institutional knowledge, and listened closely to employees’ frustrations with system limitations, unclear expectations, and disconnects between physical movement and system records.
Other Assessment Areas:
- Physical inventory flows and warehousing logic
- ERP configuration vs. physical practices
- Roles and responsibilities for executing transactions
- Data entry lag and planning workarounds
- Customer audit readiness and traceability gaps
Tools and Methodologies:
- On-site operational walkthrough
- Shadowing of warehouse and planning personnel
- Process mapping of inventory-related workflows
- Gap analysis between physical execution and system design
- System capability assessment with future-fit planning
Deliverables:
- Findings summary showing WMS was not the immediate solution
- Roadmap for codifying inventory processes using the current ERP
- Recommendations for establishing structured storage locations
- Guidelines for assigning ERP transactions to front-line users
- Long-term ERP upgrade planning and vendor selection support
Conclusion:
This engagement revealed that the CM didn’t need a new WMS—they needed to fix the foundation-level processes and existing WMS. Inventory breakdowns were due to a lack of defined processes, system discipline, and clarity on responsibilities rather than technology.
Core issues identified:
- A lack of location management in the physical warehouse space or the WMS, leading to misplacement of inventory.
- Training and adherence of warehouse staff who utilized paper communications, rather than the system, and resulted in delays.
- Inaccurate inventory data within the WMS, creating a reliability issue and a lack of system effectiveness for buyers. Buyers needed to physically verify inventory prior to ordering, a significant drain on time and resources.
By addressing these root causes first, the CM gained immediate traction: inventory visibility improved, customer audits became passable, and internal accountability strengthened. They avoided an expensive WMS that would have only layered complexity over chaos.
Ultimately, the client opted to upgrade their ERP—not as a bandage, but as the next step in a thoughtful sequence. With ongoing guidance from Waypost, they were positioned to select and implement the right technology at the right time—with a strong operational foundation already in place.
“This wasn’t just a system fix—it was a business maturity leap.”