What is a Warehouse Management System? An Introduction

What is a WMS System and How Does it Benefit your Business?

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Warehouse management systems, or “WMS” technology provide companies with access to critical visibility over their inventory and materials.

One of the most valuable tools in running an efficient and cost-effective business, a warehouse management system can help with everything from supply chain fulfillment to tracking the goods and materials you use to make products.

Warehouse management (WMS) solutions empower companies to make the most of their labor, space, and equipment resources, by opening the door to better internal coordination and material flows.

They’re designed to not only manage the elements of a simply supply chain, but also the requirements of an evolving global company.

Let’s take a closer look at what a WMS can do.

What is a Warehouse Management System?

A warehouse management system, or “WMS”, consists of a wide combination of software and processes which allow organizations to control warehouse operations from the moment goods enter a warehouse, to the time they’re delivered to customers.

For many businesses, warehouses exist at the heart of the manufacturing and supply chain cycle. They hold all of the material used and produced in these processes, from raw materials to finished goods.

A WMS helps to ensure goods and materials move through warehouses in the most cost-effective and efficient way possible. A WMS also comes with many functions to help companies manage these movements. For instance, the tools may include inventory tracking, picking, putaway, and receiving.

In the business environment, a supply chain can only operate as accurately, and efficiently as the processes of the warehouse allows. A WMS plays a central role in supply chain management, by managing order fulfillment processes. For instance, if raw materials are misplaced in the warehouse, the supply chain will be disrupted or slowed. As a result, WMS technology helps to ensure processes work like a well-oiled machine.

The role of a WMS is in helping users manage the fulfillment, and product handling tasks in the distribution and warehouse center, such as selecting different items from shelves, and putting received away.

Often, it manages the data collected from barcode readers and RFID tags, to update the inventory management components of the ERP system.

The Types of Warehouse Management Systems

Like many modern tools for the ecommerce store owner, warehouse management solutions come in a range of types and implementation structures. Depending on the structure of the store, a WMS can be either a standalone system, or a module within a larger ERP or supply chain suite.

WMS solutions may also vary widely in complexity. Some small businesses might use a simple selection of spreadsheet files and documents, while many larger organizations use advanced and multi-faceted WMS software. Some solutions are even designed specifically for the size of the organization, or the industry it works in.

Additionally, there are some developer-enhanced tools which allow companies to develop their own WMS solutions from scratch. Many modern technologies also exist within the “cloud” environment. A cloud-based WMS solution gives companies more freedom to add new functionality and scale the operations of their business according to their specific needs.

A cloud WMS can meet with the needs of a connected customer, enabling rapid fulfillment processes and implementations. There are also lower upfront costs in the cloud, as there are fewer components to initially implement, setup, and maintain.

The Features of Warehouse Management Systems

Since Warehouse Management Systems, or WMS tools come in so many different styles and sizes to suit different business needs, their features and functionality can vary. Many solutions include a combination of different tools from scratch, as well as the option for companies to add further functionality with developer modules, integrations, and enhancements.

Although the exact functionality of a Warehouse Management tool can vary, some of the most common components include:

  • Warehouse design: Warehouse design tools enable organizations to create customized workflows for picking, packing, and managing products within the warehouse. The right tools will allow companies to optimize their inventory allocation strategies, with bin slotting components which maximize storage space and account for variations in inventory.
  • Inventory tracking: While companies can access inventory tracking tools separately, most WMS tools include their own solutions for tracking, as well as AIDC (Automatic identification and data capture) capabilities, with RFID and barcode scanners to ensure goods can be found easily when they need to be moved.
  • Picking and packaging: These tools can include zone picking, batch picking, and wave picking functionality. Warehouse employees can also use solutions like task interleaving and lot zoning functions to guide picking and packing tasks efficiently.
  • Receiving and putaway: This allows inventory putaway and retrieval to be simplified, with pick-to-voice, and pick-to-light technologies which assist companies in finding goods and getting them to the next stage in the supply chain as quickly as possible.
  • Shipping management: These tools enable the WMS to send bills of lading ahead of shipments. You can also generate invoices and packing lists for each shipment, send advanced notifications to recipients and enable shipment tracking.
  • Labor management: These tools allow warehouse managers to monitor worker performance with key performance indicators which showcase which workers are performing below or above general standards.
  • Yard and dock management: With these tools, companies can assist truck drivers visiting the warehouse in finding the right loading docks. More complex uses of yard and dock management can also allow for cross-docking and other functions for inbound and outbound shipping and fulfillment logistics.
  • Reporting: This helps managers to analyze the performance of warehouse operations and look for areas where efficiency and productivity can be improved.

The Benefits of Cloud-Based WMS

As mentioned above, WMS solutions initially began as systems run on a company’s internal on-premises servers. These tools still delivered a lot of the core benefits of WMS technology, including improved flexibility and responsiveness, better inventory accuracy, decreased errors in picking and shipping goods, and boosted customer service.

However, on-premises solutions were often complicated, and expensive to both run and implement. Simply upgrading into a cloud-based environment delivers a lot of unique advantages, including the ability to operate with real-time data, so organizations can manage the most current information on activities like shipments, orders, receipts, and goods movement.

Compared to an on-premises solution, cloud-based technology is hosted and managed by a cloud service provider or WMS vendor. This eliminates the burden of having to install, manage, and upgrade the system within the organization itself. Cloud-based solutions are easier to install and less costly to manage. However, some larger enterprises still deploy on-premises technology, because they need more customized systems capable of adhering to specific industry requirements.

Pros and Cons of Modern Warehouse Management Systems

Warehouse management systems based in the cloud can offer a number of unique benefits to business leaders in the modern, fast-paced environment. Compared to traditional solutions, the offer a number of advantages, but there are a few downsides to consider.

Pros 👍

  • Rapid implementation: Where traditional on-premises WMS solutions could take months to implement, cloud-based WMS deployments can be completed in a matter of weeks, depending on complexity. This means organizations have a faster path to return on their investment (ROI) and can take advantage of evolving capabilities sooner.
  • Easy upgrades: SaaS deployment models for the cloud-based WMS environment come with regularly scheduled upgrades, where all the configurations and updates are handled by the vendor. This means organizations are always leveraging the latest version of the software, with minimal time spent on managing each upgrade.
  • Reduced costs: With cloud-based WMS technology, there’s less reliance on software installation, IT administrators, and hardware management. This sometimes means there are lower upfront and ongoing costs linked to most cloud-based solutions. They also don’t require complicated customizations and modifications, which can lead to higher costs for on-premises technology, due to the need to reinstall and reconfigure software and hardware.
  • Scalability: Cloud-based solutions for Warehouse Management can rapidly scale and evolve as supply chains grow more complex, and companies evolve. They’re more flexible, and can be reconfigured as business requirements change and the market or landscape evolves.

Most of the world’s major warehouse management system vendors offer a range of deployment options to suit different business requirements. However, there are some companies who focus exclusively on cloud-based technology.

Examples of Warehouse Management Systems

If you’re thinking now could be the perfect time to implement your own warehouse management system for automation, enterprise resource planning, and productivity, you’ll need to first start by finding the right tools. The good news is there are plenty of warehouse management software solutions out there, designed to streamline your warehouse processes.

Many solutions are offered on a “software as a service” basis. Some will focus specifically on helping you handle enterprise resources, while others can give you access to experts who assist with everything from third-party logistics to yard management, material handling, and customer relationship management.

Here are some great options to consider:

1. ShipBob WMS

ShipBob is one of the better-known tools for order fulfillment and warehouse management. With its own global distribution center network, and endless warehousing tools, this solution can help you to keep track of your inventory and deliver excellent customer experience across every platform.

The technology even integrates perfectly with a range of ecommerce tools like Shopify. This means you can easily automate a range of fulfillment tasks connected to your online store.

ShipBob WMS comes with tools to assist in the entire inventory management and fulfillment journey. You can access transportation management tools, labelling solutions for returns and product delivery, and inventory control apps which provide instant alerts on your inventory levels.

The costs you’ll pay for Shipbob will include access to order picking and pallet storage services.

2. NetSuite

Netsuite identifies itself as the number one business management suite for evolving companies. Not only do you get an inventory management system, but you’ll also have access to a range of other cloud-based tools for ERP, financial management, customer relationship management. The omnichannel ecosystem allows you to track your business operations across virtually every touchpoint, so you can maintain complete visibility over everything.

There are SCM (Supply chain management) features, planning and budgeting tools, financial reporting and accounting services, billing solutions, and even options for professional services automation. With Netsuite, you can keep track of inventory cycle counts, manage labor costs, and master your order management all in one place.

3. Acumatica

A cloud-based and infinitely flexible ERP solution, Acumatica helps businesses to streamline their operations, so they can thrive in the digital economy. The solution comes with a “future proof design” intended to integrate with a range of tools, so you can access all of the insights you need in one place. There’s an intuitive and award-winning user interface, as well as various collaboration tools designed to keep your employees on the same page.

Acumatica’s cloud ERP helps to improve day-to-day operations with 24/7 access to business tools, automations, and various other functions. You can share data across platforms, and use AI solutions to streamline your business processes. As an added benefit, Acumatica uses a unique pricing structure which ensures you only pay for the tools you access.

4. Fishbowl Inventory

Considered to be the number one manufacturing and warehouse inventory management software solution by many leading companies, Fishbowl inventory has a lot to offer. The software specifically focuses on the manufacturing, and warehousing aspects of the supply chain. The manufacturing tools built into the platform allow companies to generate work orders, reduce the number of steps in their manufacturing process, and calculate inventory needs in demand.

Alternatively, the warehousing ecosystem provides insight into real-time asset tracking, so you never lose sight of your inventory levels. You can set up automatic reorder points on all of your products, eliminate human error by scanning barcodes to reorder automatically, and more. Fishbowl integrates with most ecommerce solutions, and it works seamlessly with a range of financial and account services too.

Getting Started with a Warehouse Management System

Ultimately, warehouse management systems are a great way to improve the profitability, efficiency, and productivity of your business. With the right type of WMS, you can maintain complete visibility into your business ecosystem, and reduce the risk of problematic inventory errors.

In today’s innovative landscape, cloud-based systems for warehouse management can even give you the freedom to automate various tasks, and scale your operations at any speed.

There are tools which can streamline replenishment with automatic orders when your inventory levels are low, as well as tools to help with product labelling, refunds, and returns.

If your company has a warehouse to manage, then it’s worth investing in the right warehouse management system to keep your business on the right track.

Rebekah Carter

Rebekah Carter is an experienced content creator, news reporter, and blogger specializing in marketing, business development, and technology. Her expertise covers everything from artificial intelligence to email marketing software and extended reality devices. When she’s not writing, Rebekah spends most of her time reading, exploring the great outdoors, and gaming.